Delta doubletake

Q: I read Down on Delta, and wanted to share a couple of thoughts about Delta and airline deregulation in general.

I am a frequent business traveler based in Atlanta, so Delta is my airline of choice – or my travel captor depending on how you look at it. I make 40 to 50 domestic business trips, and three or four trans-oceanic trips each year. I fly stand-by much of the time, since business travel plans change frequently. As load factors rise, the number of standby seats falls. Lines get longer, flight cancellations and delays require more time for the airline to get back on schedule, and passengers’ patience wears thin.

Delta’s Medallion program, like most other airlines’ premium programs, has a few perks that help make business travel a little more efficient and palatable. Early boarding means you usually can get your bag on board. “Preferred” seating sometimes gets you a little closer to the door. Upgrades get you in Business or First class once in a while. (Free award tickets? Are you kidding? Maybe to Boise at 3 a.m. in February.)

Other than these perks, you are in the tube with lots of Hefty-bag-luggage-carrying-people who can’t afford a bus ticket. The result: I avoid business travel like the plague along with many of the hard-core road warriors I meet. If I don’t absolutely, positively, unavoidably have to be there, I don’t go. Most every flight I am on reinforces this position.

I remember some figures about airline seat-miles and profitability published a couple of years ago. As I recall, only 9 percent of total seat-miles are flown by business travelers, but 42 percent of the airlines’ total profit comes from these fliers. I have also been told by a Delta accounting type that the two most profitable lines in Delta’s system are New York – Boston and New York – D.C. These hourly shuttle flights carry over 85 percent business travelers, who have average annual incomes of over $150,000.

Duh? Am I the only one who realizes the root of the problem? Airlines seem to think that putting a butt in every seat, at some price, is the secret to long-term business success. (Die Priceline.com, die!) Has the post-deregulation airline failure pattern escaped the notice of the folks running the industry? (The growth spurt followed by financial disaster. Again. And again, ad infinitum.)

The math is simple. Keep your best (best = highest profitability = business travelers) customers happy. Let the Clampett family get in some other airlines’ customers’ way. If I don’t fly because of the hassles, my $1,600 seat gets filled for $89. The airline’s costs are the same. (Actually, the fuel costs are lower, since I bring a lot less luggage than Jethro, Ellie May, and Granny.)

Although it has been 14 years since I left Duke’s B-school, I still remember some of the really simple lessons. A favorite is, “It doesn’t matter how much money you take in. It only matters how much you get to keep.” Seems to me that leaving a half-dozen $89 seats empty to fill a couple more $1,600 seats is a pretty good trade off.

– Randal Tart

A: You bring up an excellent point. Not only are occasional passengers disappointed with airline service offered by the likes of Delta. Frequent business travelers also feel disenfranchised.

Delta has seriously misjudged its core customers in the last year. How else can you characterize the frequent flier program cutbacks, its refusal to increase seat pitch in economy class (where a lot of road warriors end up sitting) and that repainting-the-fleet fiasco?

The airline, supported by a cadre of overpaid economists, is making this more complicated than it needs to be. Like you say, this is pretty simple – make the customer happy.

There’s one issue that I would differ with you on. Even though dollar for dollar, frequent travelers are more important to the bottom line, I believe there ought to be minimum standards for the way a carrier treats a passenger. Just as the Medallion program reductions hurt road warriors, Delta’s stubborn refusal to extend the amount of legroom in coach is needlessly squeezing business and leisure travelers.

I think it’s important to keep your best customers happy. It’s also important to keep the rest of your customers happy.

Further segmenting the high-rollers from the cheap Clampett’s isn’t the answer to making the travel experience better. Although I am as baffled as you are that Delta seems to be ignoring the needs of its best customers, I also think that there’s no reason for it to disregard or turn away its economy-class fliers – even if they do pay just $89 for their seats.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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