Delta recently announced some major changes for loyal flyers, including a complete overhaul of the SkyMiles program, plus new Sky Club access restrictions. Many SkyMiles members aren’t happy about these changes, and it sounds like the airline will act on that frustration.
In this post:
Delta CEO says airline went too far with SkyMiles changes
Earlier this week, Delta CEO Ed Bastian was interviewed at the Rotary Club of Atlanta. Unsurprisingly (given what a hub Delta has in Atlanta), the topic of SkyMiles changes was brought up. I was expecting that Bastian would just have some canned response about how the changes are good for frequent flyers, but that’s not what he did.
Instead, he gave a surprisingly (mostly) candid answer. Among other things, Bastian stated:
- “We’re still assessing what we do, but there will be modifications that we will make, and you’ll hear about it sometime over the next few weeks.”
- “We need to make certain that we can serve our higher tiers with a level of premium experience that you deserve. And it’s gotten to the point, honestly, where we have so much demand for our premium products and services that are far in excess of our ability to serve it effectively.”
- “In terms of our assets — whether it’s Delta One, whether it’s the Sky Clubs, whether it’s the upgrade certificate, whatever it is — we have grown that population. COVID almost doubled the amount of Diamonds.”
- “No question, we probably went too far in doing that. Our team wanted to kind of rip the band-aid off, and didn’t want to have to go through this every year. I think we moved too fast. We’re looking at it now.”
You can watch the interview for yourself below, and the topic of Delta’s loyalty changes comes up about 29 minutes in.
I think Delta learned an important lesson here
Sometimes being a consumer in the airline industry is a helpless experience, especially when you feel a sense of loyalty to a company.
So I think it’s refreshing to see an airline acknowledge when it went too far, and overplayed its hand. I’m impressed that Bastian states that “no question, we probably went too far in doing that,” since that’s more acknowledgement than you’ll get from a vast majority of executives.
What I’m curious about is if Delta can fully keep its loyal customer base, or if the damage has already been done here, at least on some level:
- No matter how you slice it, I think Delta lost a lot of trust with frequent flyer programs with how it announced these changes; the airline wasn’t at all transparent about the reasons for these changes, and tried to frame them as a positive development
- Even if Delta backtracks on these changes for now, keep in mind that this is eventually the direction that things are headed; Bastian is saying the airline wanted to rip the band-aid off rather than making changes every year
- I think the reason a lot of frequent flyers are frustrated is because the changes aren’t actually intended to reward loyal customers, but rather are intended to pad Delta’s bottom line (which is fair enough); for example, the new limits of Sky Club access 6-10 times per year impact frequent flyers a lot more than they impact the occasional Delta flyer
- While I can appreciate the need to manage expectations of customers and deliver on promises, I think it’s clear what the motivation for these changes is, which (understandably) isn’t mentioned by Bastian — it’s to encourage people to spend more on co-branded cards, since the airline is hoping to grow that business to $10 billion in revenue per year
As I’ve said before, I think airline loyalty just isn’t worth it like it used to be. On top of that, I also think Delta overplays how premium of an airline it is, and how much of a competitive advantage it has.
Delta CEO Ed Bastian has made it clear that the airline plans modifications to its SkyMiles changes, and that the company went too far. It’s nice to see an airline backtracking for once, and it clearly reflects just how unpopular these changes were with Delta flyers.
Even if Delta makes modifications, I’d encourage people to still really consider whether loyalty is worth it, since we know which direction things are headed sooner or later.
What do you make about Bastian’s comments on modifications to SkyMiles changes?