Delta’s astonishing arrogance is covered in a piece by Benét Wilson for Airways News that basically asks whether Delta CEO Richard Anderson is an evil genius.. or just evil?
It walks through the success of Delta, taking the Northwest Airlines merger and making it successful and becoming the model of both a financially and operationally successful airline — and walking through the extreme moves it’s made, many not necessary towards that goal, that treat its partners and customers with disdain… Like basically severing ties with Korean Air, despite joint membership in the Skyteam alliance, over the Seoul-based airline’s unwillingness to enter into a joint venture (at least on Delta’s terms), while limiting corporate customers’ options in Asia in the process.
The airline ruffles feathers by jawboning the price of widebody aircraft (while Boeing’s stock was affected by Delta claiming to be able to buy 777s for $10 million, the actual price of the aircraft won’t be influenced by such talk — and their acquisition of a plane for less than that was really for parts.. not an operational aircraft).
It’s left the industry lobbying group and gone to all out war with Alaska Airlines (though Alaska has grown substantially and is both more reliable and more profitable than ever).
Anderson pushes the envelope to absurdity, like blaming the big Gulf airlines for 9/11 (when he partners with Saudia, whose government was at least complicit in the attacks). The 9/11 comment though will go on his tombstone, like the late Marion Barry’s line about the woman with whom he was videotaped smoking crack.
While frequent flyer programs may have been overly generous, especially coming out of the Great Recession, and no longer need to be as rewarding to fill incremental seats on planes — and Delta could extract surreal amounts of cash from American Express after their co-brand issuer lost its deal with Costco — they may have wrung out way too much value from the SkyMiles program and could be on the verge of hurting themselves by it.
Anderson also approved SkyMiles’ evolution from a pure mileage- and frequency-based program into one that recognized what really matters to an airline — revenue, said [Henry] Harteveldt. “The execution hasn’t been entirely perfect, however. Delta now focuses on revenue at the expense of customer loyalty, and this is about to bite them on the behind,” he said. “Proprietary research we do for a financial services client shows that Delta has lost an alarming amount of customer loyalty, especially among its top-tier 360, Diamond and Platinum members, [while] Gold and Silver members already feel ignored.”
The program doesn’t reward high spenders. Upgrades from mid-priced economy fares are now more miles than award tickets. Earlier this month they made unannoucned changes to their secret award chart. Perhaps most importantly they’ve created a fundamental trust deficit.
You know there’s a problem when the airline won’t claim to be honest and its partners won’t claim the points are retaining their value.
To the extent that the best SkyMiles advice may be from the conclusion of the Matthew Broderick film War Games, and echoed by Henry Harteveldt’s research, Delta may have pushed things too far — to the point it really costs them the loyalty of the very customers they say are actually the most valuable.