Delta Air Lines has all but officially confirmed that it will introduce “basic” business class fares that will unbundle premium cabin tickets. However, what that product will look like and whether it will go over with its most important customers remains an unanswered question.
Delta’s Bold Plan To Unbundle Business Class
During the Q2 investor call yesterday, CNBC reporter Leslie Josephs asked about whether a basic business class was coming soon to Delta Air Lines:
“Just curious on the segmentation at the front of the plane. Is that something that you plan to roll out in 2025 or 2026? And would it look something more like a basic business where you the customer doesn’t have a seat assignment or something like that? Or do you plan to have kind of a fancier or more desirable seat within Delta One or one of the other first class cabins?”
Delta President Glen Hauenstein responded:
“I think we’re gonna reserve comments on that until we roll it out. I think we’re testing it with customers today, and we’re doing a lot of surveys. And we haven’t rolled it out yet, not because we don’t have the technological capability, but we wanna make sure that customers understand what we’re putting in market and that they find value in it.”
Josephs pushed Hauenstein for more info:
“Could you tell us what you’re testing exactly currently?”
Hauenstein was not willing to say anything more:
“No. No. We can’t. But thank you for the question.”
That question was not without context. Last year (during the Q2 2024 earnings calls), JP Morgan Analyst Jamie Baker asked:
“This concept of unbundling the front cabin is one that I’ve been thinking about in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others. I want to be careful about asking about future pricing and all that, but I’m curious what the pros and cons are in terms of possibly going down this path, or is one price for all how we should continue to think about the D1 cabin?”
Hauenstein responded:
“We’ve talked conceptually about that. I think we’ll be giving you more details as we go, but we’re not ready to talk about the details of those plans moving forward.”
> Read More: Delta Plans To Unbundle Business Class…Will American + United Follow?
What Could Basic Business Class Look Like?
One Mile At A Time thinks that unbundling will be focused on domestic first class fares and a roundabout way of re-introducing change fees by limiting changes on the cheapest premium cabin tickets.
I hate the thought of that…the lack of change fees has revolutionized the way I book travel. But I also think he’s right…and unfortunately, Delta and others will follow.
But I also think that we could see an international Delta One basic fare that might resemble the way Qatar Airways sells “basic” tickets, including:
- restrictive change fees
- no lounge access
- no advance seat assignment
- limited mileage earning
I do think is “penny wise, pound foolish” to sell a $5,000 seat and then ask for another $200 each way for a seat assignment or lounge access, but this is not about my (consumer-driven) preference but more about what the market will bear.
Will people gripe? Of course. Will they still buy Delta One tickets? Of course.
And we’re seeing an increasing spread between basic economy and regular economy tickets. We might well see the same thing with premium cabins. Delta would spin this as an antidote to inflation: rather than raising prices, it is just unbundling.
That greed is not appreciated, yet it is understandably driven by a goal of maximizing shareholder return.
And let me put it this way: if suckers continue to rack up spending on SkyMiles co-branded credit cards instead of far wiser cashback or flexible currency alternatives, they won’t hesitate to pay more for business class tickets.
Other Carriers Will Follow
When I asked Andrew Nocella, the Executive Vice President and Chief Commercial Officer of United Airlines, about basic business class he readily admitted that United is carefully studying it and suggested that it was only a matter of time before United introduced this too.
I’m certain American Airlines would follow and probably Alaska Airlines too.
Delta is the industry bellwether and other carriers will try to mimic its success.
CONCLUSION
Delta Air Lines is moving closer to unbundling its premium cabin tickets with “basic” fares. While I may be personally opposed to such nickel and diming, my prediction is that Delta is probably going to get away with it and others will match.
No one really thought that airlines were serious when they said, “Change fees are gone forever.” Soon enough, that will likely impact premium cabin tickets too, as is already true in many markets outside the USA.
image: Delta Air Lines
What do you expect from a company run by a bunch of liars?
“ And let me put it this way: if suckers continue to rack up spending on SkyMiles co-branded credit cards instead of far wiser cashback or flexible currency alternatives, they won’t hesitate to pay more for business class tickets.”
Nice thing to call the people you built your business off of. Kind of surprised to hear that from you since your blanket statement isn’t always true.
But I would call anyone who uses the services you and Kyle provide “suckers” or worse, but let’s face it, it’s what I do. You should be better than this and certainly better than me.
I don’t recall Matthew pimping Delta credit cards. That said, I don’t agree with Matthew calling people who use these cards “suckers” becuase their is significant value to be had in Delta status. They key is understadning what you are trading when you give up flexible currencies in exchange for DL Skymiles and status. The status ain’t “free.”
“because there is”…I’m sure there are more typos, too
Thank you Gene for that correct take.
Just was surprised to see Matt say that when it isn’t always true, as you pointed out.
Unbundled J works for European and Middle Eastern carriers because many of their flights are connecting with short connections. This leads to customers not going to the lounge and prefer being comfortable in the air over any other amenities with the short connection, and more than likely, they’re leisure pax who know that they won’t need to cancel/change their trip.
I see exactly what you’re trying to argue and I see the overall message you’re trying to make. But insulting Delta customers who continue to use these co-branded credit cards but will purchase unbundled J fares as “suckers” is a bit flippant.
No airline around is as fervent and innovative about finding new ways to screw over their passengers than Delta. They’re like a Marriott of the air. It wasn’t so long ago that they relied on being better than the competition to earn money.
How successful is Zipair? If Delta had a lie flat seat for long international routes but there was no advanced seat assignment, no meals, no lounge access, no Skymiles, no amenity kit, last to board, I still might buy it.
@derek: Bingo! All I really care about is the lie flat seat. Everything else is “nice to have” but usually I skip it anyway.
Advanced seat assignment: I know it will be a lie flat seat so why do I care what seat number it is? Yes, it might be closer to the bathroom or kitchen area but I sleep anyway.
Meals: the older I get, the less I eat on plane. Flying Delta One international next week and just got the email to select my meal. I opted to skip it. Their wine list is not something I will ever miss.
No lounge access: I usually get to the airport with just enough time to go through security and get to the gate.
No Skymiles: not a big deal anyway.
No amenity kit: just donated over 100 amenity kits I had in several boxes at home.
Last to board: nobody will take my seat and overhead bin will be still available.
Totally agree!
Just love management’s gaslighting of its customers, stating they’re using surveys. Of course when they institute this latest scam/insult they’ll spin it by the citing the usual ‘customer preference’ crap. And when UA/AA match this they’ll state it’s to remain ‘competitive’. If they were realistically competitive, they wouldn’t match this chicanery and let Delta twist in the wind. I’m confident that if the decision to implement this was solely/truthfully based on customer preference it’d be scrapped immediately.
It wreaks of pissing on your leg & telling you it’s raining.
Amazing, but predictable, that the airlines are reverting to their usual predatory corporate practices after recovery from the pandemic: filthy planes and shrinkflation airfares for starters.
…. And Delta will still call this a ” premium ” experience as they nickel and dime its most lucrative customers !
Sky Peso members should cut up their cards & return them to Delta …
Remember when Lufthansa tried to use customer surveys as a reason for wanting to get rid of free sodas and other drinks in economy?
What, you didn’t know that customers want to pay more? Just part of The Delta Effect: Make customers pay more, get less, or both.
DL miles are nowhere near as worthless as you , or indeed some people, portray them. There’s no shortage of award journeys for which the DL programme will charge fewer miles than AFKL
That should’ve been ‘or indeed some other people’
Once an airline goes down this route, it never goes back…passengers will still keep using the product regardless.
I fly J both TA and TP each year. DL has always been the choice for the former given KL and AF code sharing. They are never the TP choice given route scarcity. Living near a non-hub, non-focus city, I always have a plethora of routings on the big3 for my trips. I can’t imagine DL can offer folks like me a “basic plus the extras” airfare at higher price than AA or UA offers for fully bundled and succeed. Unless the DL move causes a copying by AA and UA, I suspect competitive market pressures will protect me from paying more for the current package.
I would like cheaper business class tickets that were unbundled in a different way. No changes and no cancellations is not what I want to see. But, the other stuff: choosing your seat, lounge access, extra checked bags and even the meals/complimentary alcohol are things that I am 100% not interested in. I just want a more spacious, more comfortable, less cramped seat. That’s it. I rarely use the lounge or eat the food even when it is included and I don’t drink alcohol or check bags at all. I’d gladly pay for a more affordably priced business class seat that excludes those extras.
Delta has not been a premium carrier now for many years, we flew them in Domestic F from BZN-MSP-DCA, app is awful, food was inedible including the cheese plate, CS was non -existent during the delay we had. Never Delta again and I’m an SAS Gold member and I’ll still fly UA or AA over DL even with status.
I took this survey, and it was anything but straightforward. They had choices between getting 40-60% skypesos or getting 80% with a picking a seat.
And we all know the fares won’t be cheaper than they currently are, they will just increase the normal J fares.
Delta isn’t as premium as they think.
sad state of DL affairs!
What DL will likely do, I suspect, is add a charge for “true” window seats. I believe some other airline has done it. With the 332s and 333s scheduled to get 339 and 350 makeovers, they’ll try to extract $s for the better window seats. I always have had “1 side ” seating in 1-2-1 J. I might pay extra for a “true” window seat, but will definitely pay extra not to be a single traveler in the “2 section.” I don’t change dates, don’t need a lounge, and view spending more to get more miles a lousy transaction in a world where miles suffer inflation as bad a South American despotic regime.
We recently bought KUL-YUL return J on QR. Lounge access included. Super great price. Advance seat selection would have added an extra $1000 at least. We travel a lot. My wife and I agreed to skip the seat selection. If we aren’t next to each other it’s no big deal. We still have the lounge and are next to each other pretty much all day anyway!