My Mental Model of United, Delta, and American

I have a basic framework for how each of the three major US airlines operates today. The variance between them is shrinking, as Delta is the best-run overall of the three and the most admired. Both United and American executives have spoken glowingly of their rival, and clearly want to be more like them.

This framework is useful to me as I see news about an airline. Every item gets processed alongside a context for who the airline is, what’s in its DNA. That news either comports with my pre-existing model, or conflicts and requires updating the model.

Taken together it’s my picture of who United, Delta, and American are today — what they’re trying to be, and how they’re trying to get there.

Delta

Delta wants to be the preferred carrier for business travelers. The way they get there is with the most reliable on-time operation, and by investing more in inflight and airport product (nicer clubs, faster wifi, free entertainment).


San Francisco SkyClub Bar Area

The airline may even be 80% as good as they think they are. And that’s their weak spot: arrogance. They believe everyone should want to fly Delta, and government policy should align with what’s best for Delta.

Even the area where they aren’t as good as their competitors — SkyMiles, perhaps the least trustworthy program in the industry — they’ve got a blind spot because they seem to believe everything they do is good. (Prior to the launch of their revenue-based program executives would admit in candid moments that SkyMiles was the one thing in the company that truly lagged.)

United

United serves the most destinations, but can’t quite work out a strategy. They cut frills (“project quality“) and then started bringing a few back.

Their operation is still a mess, they desperately need a new computer reservation system. They still don’t have consolidated contracts with all work groups after the United-Continental merger so cannot deploy staff and aircraft across their network in the most efficient way possible.

They’re introducing a new business class seat that’s almost as good as Delta’s and American’s, but they’re taking 5 years to install it.

Management wants to turn the airline around, is starting to make overtures to gain the trust of employees, but beyond that doesn’t yet seem to have a plan. So they make small ball moves like better coffee and stroopwafels in economy, by announcing seats we’ll see later, but deferring big changes that would be costly and disruptive but could transform the airline.

American

American admires what Delta has done. They want to be like Delta, and makes some copycat moves but won’t really commit.

They invest in onboard food, but not as much. They invest in club lounges, but not as much. They invest in faster internet but in a hodgepodge way. And in the future.

American won’t go all in, across the board, to catch up with Delta. They haven’t made even announced plans for a consistent product to upgrade most legacy US Airways aircraft with extra legroom coach seats or even seat power.

The AAdvantage frequent flyer program is becoming more like Delta’s (in terms of features) albeit American has been fairly transparent as they’ve gone about it. Even in this one respect where they’re better they seem to be trying to be “almost Delta.”

I just wish American would improve the legacy US Airways planes, and stop boarding too early and updating passengers on delays too late.

What are Your Takeaways?

Are these reasonable takes on the 3 US global airlines? What’s your experience?

About Gary Leff


Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel – a topic he has covered since 2002.

Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the “World’s Top Travel Experts” by Conde’ Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. @gary
    gary, tks for this
    now that american is going revenue based, do you think it will be better to switch, assuming I will make united platinum (or american platinum pro next year)
    it seems that bothj programs are equal now, and the airlines are equal (equally bad….)
    based in YVR and fly mostly latin america, some domestic USA
    appreciate your thoughts

  2. Of course, none of them can hold a candle to the best or even better ones in the world. It is like a survey of the biggest/ best soccer or baseball teams in Myanmar. 🙂

  3. Key reason they can’t be Delta:

    MSP, DTW, ATL, SLC – all hubs with dominant share and no crosstown competition.

    Gives Delta a margin advantage that lets it invest.

    Unless the others manage to get lower labor costs than Delta that’s the equation.

  4. Just be glad you still have a few airlines left that can benchmark, copycat, and compete against each other. some semblance of competition is critical to maintain a modicum of a favorable customer experience.

    When I read about stripping out the frills, lowering product quality, etc. I cannot help but think of the impact over the past decade as Amtrak has pursued such a parallel, but far deeper strategy dismembering overnight First Class trains, including:
    Dining:
    -Quality of food reduced to less than truck stop fare; no toasters; no up-selling of alcohol.
    -Same menu for each meal every day, every route.
    Lounge:
    -No mixed cocktails; no premium liquor in kits; no trained mixologists.
    -First Class ambiance sacrificed for a “7-11 on wheels.”
    Sleeping Cars
    -Who knows when last rehabbed? (Seats, windows, HVAC, lights, etc)
    -Old linen, pillows, thin plastic army-type mattress roll.
    -PA incessantly on throughout day, starting 0700/0730 announcing breakfast and menu.
    Parlors
    -No daylight First Class “Parlor” outside of Acela in Northeast.

    Now does UA and AA sound so bad..?

  5. I agree for the most part with your analysis. I don’t fly United so have no comments there. When thinking of Delta, In addition to arrogance, other words that come to mind are untrustworthy and vindictive. People at delta are drinking the kool aid by the gallon. American is a delta wanna be, but it makes dumb moves like D=0 and the wifi mess among others to get there.

    There are a lot of reasons for this conclusion, but I think Admirals Clubs are just as good as Skyclubs. When you throw in Flagship lounges and First Class dinning and international first class lounges that American passengers have access to, American is clearly better. And that is the big advantage (no pun) American has in ff programs – the ability to fly first class on international flights. Also upgrades are better on American for the time being.

  6. As an executive platinum with lounge access, boarding too early is a real problem. I often arrive 5 minutes before boarding to find all the first class boarded and a huge line in the priority lane. It’s completely messed up.

  7. @ Gary — So, in summary, you’re admitting Delta is better, and you are ready to change. You bloggers are finally seeing the light… 🙂

  8. I like to think of each airline being at their own phase of the business cycle:
    Delta – Right at the peak
    United – Right at the trough
    AA – Fighting out of the trough

    Give it 5 years, and AA will be at the peak, Delta will be at the trough, and United will be fighting out of the trough.

  9. @gene
    Gene
    I believe gary always said delta is the best airline with the worst program, nothing change
    I think their program is disporportionally worse than their operational advantage
    Will never get on a delta flight, they are arrogant and disrespectful to their frequent fliers

  10. @ Doug — I am a Million Miler with AA, DL, and UA, and currently hold AA Executive Platinum, DL Diamond, and UA 1K status. I think Delta has a much better elite program than both AA and UA. Yes, DL award redemptions may not be aspirational, but you can get those elsewhere via credit cards. I will take Delta over American and United any day, and the bloggers are finally seeing the light.

  11. I think United and American share something seen across most every business/industry in the US, that is people in decision-making capacities who refuse to actually make decisions, instead they see what their competition does and mimics them (Delta).

    The legacy US corporate world is filled with Upper Level nitwits who have no original thoughts and make no original decisions, lest they get kicked off their gravy train. Under them are Middle Managers with no true natural management talent who instead follow the Management-Book-Of-The-Month cult lest they get kicked off the ladder to the ‘possible’ Upper Level Gravy Train.

    Talent means nothing anymore. It’s all networking.

  12. @ Doug. Serious question – how is Delta’s elite program better? I am a 10+ year UA 1K and I have looked at this closely and come to essentially the same conclusion as Gary – which is that while Delta may run a marginally better operation, but they have a significantly worse FF program. And therefore, they get very little of my business.

  13. @Gene Serious question – how is Delta’s elite program better? I am a 10+ year UA 1K and I have looked at this closely and come to essentially the same conclusion as Gary – which is that while Delta may run a marginally better operation, but they have a significantly worse FF program. And therefore, they get very little of my business.

  14. @Gene – better airline, worse frequent flyer program. And I don’t buy better elite program (although the gap isn’t as big as it used to be)

  15. Okay, so delta has a better airline and their competitors are pretty incompetent and are also removing the one thing that positively differentiates them (frequent flyer programs). Why should delta buff up their program now? I understand you’d like them to, Gary (and I do too!), but that’s not how business works.

    Also, if there’s a recession they all will. But there’s not a recession.

  16. @Gary,

    I think the thing that has helped Delta succeed is willingness of their senior management to make bold, contrarian moves. Two examples that illustrate this:
    1. While most airlines hedge fuel prices (via futures contracts and the like) to at least somee degree, Delta Airlines’ made an outright acquisition of a shuttered northeast oil refinery.
    http://www.fool.com/investing/general/2016/04/26/why-you-shouldnt-worry-about-delta-air-lines-refin.aspx

    2. While most airlines only want to buy the newest and most fuel efficient jets, Delta has the mindset of a bargain shopper and is willing to buy older, less fuel efficient jets at favorable prices. Having their own jet fuel refinery (see #1 above) gives Delta more leeway to do so. And DAL’s recent move to acquire Bombardier C Series jets was very much in the same vein, as Delta undoubtedly received heavily discounted prices in exchange for their badly needed order (without which the Bombardier program and even the company’s survival were being questioned).
    http://www.bloomberg.com/news/articles/2015-10-14/delta-bargain-hunt-puts-boeing-777-on-used-jet-shopping-list
    http://news.delta.com/delta-orders-state-art-fuel-efficient-bombardier-c-series

    Strategic contrarian moves like these have gone a long way to strengthening Delta’s finances, which in turn means the company doesn’t have to worry (as much) about cutting corners on in-flight and ground services.

  17. For the first time in almost a decade, I’ve stopped trying to obtain elite status and be loyal. Airlines have made discounted business class affordable enough that I buy whatever airline has the best deal (while considering the on-board product). I’ll fly from California to New England soon: JetBlue Mint on the way there, DL on the way back.

    To be honest, I’d rather have $599 one-way transcontinental business class than have to play the MQM / MQS / MQD game just to play a lottery with ever decreasing odds.

  18. @gene
    Would like to hear your perspective on delta program
    For me the “no one way awards” and the aweful redemption charts are really bad
    Dont know enough about accruing miles and upgrades, so appreciate your opinion
    Tks

  19. @Luke Vader – the refinery turned out not to be a great move, the bargain planes turned out to be brilliant because the cost of fuel fell

  20. I am Lifetime PLT on AA and after the merger have divorced myself from the company. The clubs are okay – glad they are being re-done. But the customer service policies (D=0, not holding last conx, horrible downgrade of product in F, no Y+ on LUS fleet… you get the picture) were just too much to bear.

    Like someone mentioned before – DL has made their premium product affordable enough I simply buy what I want instead of fighting for loyalty that may or may not get me upgraded.

    My only beef with DL is the service in F is no where near as good as LAA. The food is better and the serve wares are nicer, but the actual service is not nearly as good.

  21. aside from all of this, it really comes down to where I live and where I need to go for work. And then who offers the best schedule/ reliability.

    If I’m in Atlanta and travel a lot for work, I’ll probably end up on Delta.
    If I’m in Chicago, It’ll most likely be UA or AA. Delta is nice, but I just do not have time for connections if I can get a nonstop flight. If I’m in Chicago and only go to NYC or Atlanta or Detroit or MSP for work, DL could be an option, but that’s most likely not the case.

    Similar methodology wherever I am.

    I live in DC and most of my work takes me to destinations for which there are nonstops from DCA, my preferred airport. Mostly AA, then. Easy decision. I don’t like connecting, and the convenience of a nonstop trumps all other considerations.

  22. Pretty accurate tour d’horizon. UA has relied on its route network to get business travel, allowing everything else to be second-rate, and it has certainly been why I fly them. I think the Polaris initiative is an indication, though, that they are beginning to understand that it can’t be the only thing going for them if they want to advance. You know, I was just thinking about how when I am travelling on UA, whether domestic or international, the UA club is usually not the one I go to (LHR being the only exception) if there is any other option, and there usually is.

    I like Delta, and don’t dislike AA. I fly them when they have the route I need. Of course, none of these will be my first choice for international if there is a reasonably priced flight on an international carrier.

  23. @ Gary — Here’s why I think Delta Diamond is better than AA EXP and UA 1K:

    1) Status requirement – If you spend $30,000 on a Delta Reserve card each year, the qualification requirement for Diamond is only 110,000 MQM from flying, with no spending requirement. Given that Delta allows rollover MQMs, I would equate 110,000 MQMs on Delta to 100,000 EQMs on AA or UA. Delta wins this one.

    2) Complimentary Upgrades – I gave up on complimentary UA upgrades LONG ago. They were the first to betray their top elites by selling upgrades to kettles for tens of dollars, while not even offering those same paid upgrades to 1Ks. This is the first thing that made me realize Jeff Smisek is a liar. Delta has now moved to a model of aggressively selling upgrades, but it is transparent and available to everyone at the same price (as far as I know). American seems late/slow to this game.

    On mid to long flights (or even short flights on Diamond-heavy routes on peak days), I don’t mind paying for the upgrades on Delta, as they re-book directly into the paid F class and earn qualifying miles based on the F fare bucket (can be great for crediting to AS). On short flights on most routes and most times, my complimentary upgrades still clear 99% of the time.
    Complimentary AA EXP upgrades are definitely easier to get on mid to long flights, so AA is the winner in this category for most people. However, I loathe coach, so don’t much like gambling on these.

    3) Upgrade instruments – UA gives you 10 (4 regional, 6 global), Delta gives you up to 12 (12 regional, 0 global) or 10 (8 regional, 2 global) or 8 (4 regional, 4 global), AA gives you only 4 SWUs. Although you can get more international upgrades with United, expensive minimum fare buckets are required, so Delta’s upgrades are significantly more valuable. In addition, you don’t need to start the 12-month expiration clock on your Delta upgrades until you select them. Delta is the clear winner here, although I wish they would make availability and redemption available online (like United).

    4) Domestic lounge access – Delta is the only one of the big three to give complimentary club membership. Delta wins this one hands down.

    5) International lounge access – American wins this one hands down. Being able to use OneWorld partner F lounges regardless of fare class, PRICELESS!

    6) Free checked bags – Delta and United win this one, with up to 3 bags x 70 lbs/bag. American won’t even allow a free bag over 50 lbs!

    7) Phone support – Delta wins this one. AA used to be these best here, but now it is hit or miss, and EXP wait times can be ridiculous. Delta does have issues with inconsistency among agents, so this one is definitely HUCA.

    8) Recognition – Delta wins this one easily. I am almost always thanked for being a Diamond Million Miler with each interaction with a Delta employee. I know this is “fluff” and that there are thousands of other Diamond Million Milers, but it still makes me feel appreciated. The other airlines are idiots for not doing the same. This costs Delta ABSOLUTELY NOTHING to provide and certainly isn’t going to generate any complaints.

    9) Same-day confirmed policy for first class fares – This is my favorite Delta policy of all. I can buy the cheapest first class ticket of the day between A and B and then change to my preferred time and routing (except for changing from a connection to a non-stop) for free within 24 hours. As a Diamond, I can even make a free change of co-terminals. American doesn’t even allow SDC on first class tickets (STUPID) and United seems to sell/give away all of the first class seats at T-24, so there is often little chance of getting an SDC on a first class ticket.

    10) Flexibility – Delta wins this one hands down. American agents are about as flexible as a chuck of concrete and United agents are generally powerless, while Delta Diamond-line agents are usually willing to do most anything you ask, as long as you only ask when you really need something.

    11) Other little things – Again, Delta wins. Complimentary CLEAR membership, SPG Crossover Rewards (absolutely FREE SPG points, some in-hotel benefits), one more choice benefit in addition to the upgrades discussed above (I find the 25,000 SkyMiles to be the most valuable, some may prefer the free Gold status for a friend/spouse), and free Hertz President’s Circle status (United also offers this).

  24. 100% on delta arrogance. After numerous interactions with folks on Virginia Ave. 90% of them are self entitled dbags. Can’t wait for them to get their comeuppance soon enough.

  25. How hard would it be to pull one row of seats out of legacy USAir birds to create some MCE for AA customers? I know there would be tech issues, issues with reservations, eq swaps between modded and unmodded aircraft, having to adjust PSU units in the OH. So not a slam dunk easy job.

    But c’mon. A unified product is pretty basic in being able to sell well across your route map!

    A friend flies AA from time to time and is 6’5″. He is stunned any time he can’t buy up to extra legroom, he doesn’t fly often enough to think to check for schedules that have pre-merger AA equipment on the schedule. It is a lost revenue opportunity and potentially drives customers to your competitors.

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