Delta’s and other airlines’ focus on well-heeled customers is widening the gap between the haves and have-nots.
If you’re looking for evidence of a widening class gap, take a look at the differences today between business class and coach on a flight.
For those whom Delta Air Lines considers its best customers, the experience may include expedited security screening where you can keep your shoes and belt on, followed by entry into an airport Sky Club with complimentary drinks and snacks.
That might seem far different if you’ve been munching on peanuts in your cramped seat in coach. Over the years, airlines have been squeezing more seats into the back of the plane and have removed some extras like free checked bags and meals. Now, much of their attention is on ever-more luxurious seats and amenities for those up front, where the profits are.
On long international flights, some well-heeled passengers are willing to pay more than $8,000 for a ticket that includes the creature comforts in business class: Those heading overseas in Delta’s BusinessElite seats may dine on pan-fried halibut with spicy tartar sauce, smashed fingerling potatoes, asparagus and wine pairings. On board may be free movies and HBO, a seat that reclines into a flat bed with a comforter and pillow from Westin Hotels, and a luxury amenity kit.
“There’s no question that business class on long-haul flights has become much more comfortable, and if you’re in standard coach, it’s not always so pleasant,” said Hudson Crossing travel industry analyst Henry Harteveldt. “With airlines really focusing on premium customers, what we have to accept is that that’s who’s going to get the love.”
A key reason is a mature airline industry. Particularly within the United States, there are few markets left for profitable airline expansion.
Airlines are searching for ways to squeeze out more revenue from their customer base; thus, airlines are increasingly competing for the attention of those with the deepest pockets — corporate travelers.
“When we are talking about further development of the network, it’s really not putting more dots on the map, but making the dots we have produce a higher margin,” Delta’s executive vice president of revenue management, Glen Hauenstein, said at the company’s investor day in December.
The gap is widening
All passengers experience the hassles of flight delays and other disruptions, but a sharpened focus on well-heeled customers is widening the gap between the haves and the have-nots on airlines.
It’s not just a bigger seat and better silverware up front. Today, the difference between business class and coach class “is like night and day, quite frankly,” said Ron Kurtz, an Alpharetta, Ga., resident who travels several times a year.
Most of the time he’s in coach class, where “I find it miserable,” Kurtz said. “So many seats have been packed onto the planes now.” But on international flights when he books business class, “it’s much more relaxing. … It’s much nicer,” said Kurtz.
The drastically different experiences are by design, Harteveldt said.
“Airlines want this — there’s an element of psychology out there where airlines want people to realize that the more you pay, the better your experience will be,” he said.
Premium passengers — whom Delta internally call HVCs, or high-value customers — represent a disproportionate share of Delta’s revenue and profits, with 5 percent of Delta’s customers accounting for 26 percent of the airline’s revenue. They “want and value more from Delta than the base offering,” said Tim Mapes, Delta’s senior vice president of marketing.
In the past several months, Delta has announced a string of improvements targeted at passengers in BusinessElite, including more full-flat seats on a variety of routes — as competitors such as United Airlines have also done — along with new meals and bedding. Also in the works are outdoor decks for Sky Clubs in Atlanta and New York.
Delta also plans to make elite status even more elite, by raising the bar to reach “Medallion” status in its SkyMiles frequent flier program to require a minimum level of spending in addition to miles flown.
The ‘airline of choice’
During the company’s investor day in December, Delta President Ed Bastian said the airline wants to be the “airline of choice” for corporate customers.
Part of the pressure to offer higher-end service is globalization of the airline industry.
With a route network that now stretches around the globe, Delta competes for customers with foreign carriers such as Singapore Airlines and Emirates known for especially high levels of service.
Strategic moves like Delta’s proposed joint venture with British carrier Virgin Atlantic are aimed squarely at corporate travelers who need to travel globally. “Airlines know that if you’re flying business class across the Atlantic — then that’s where the big bucks are made,” said Atlanta-based customer experience expert Colin Shaw, who heads consulting firm Beyond Philosophy.