This week, I had the unique challenge of explaining Delta’s latest market segmentation to both my 11-year old daughter, and my father and this is how it went.
What’s New In Travel This Holiday Season?
A reporter for a local paper reached out as I am a travel agency owner to ask about what is “new in travel” this holiday season. I relayed a few trends which meander from where people are spending money, new hotel openings, the explosion in the river cruise market, the best use of miles and points – none of that was particularly groundbreaking for our readership here. And nothing took as long to explain as Delta’s Basic Premium Economy product, Delta Premium Select.
As I was recounting this to my daughter with my father in the car, I realized just how insane this concept is but also that our readership would appreciate this expository approach. Enjoy.
An Exercise In Both Stream Of Consciousness And Futility
“Wait, so what is Basic Premium Economy?” my daughter asked.
“It’s Delta Premium Select, but yes, it’s like a Premium Economy without all the extras.” I said as I drove us to the airport ahead of a short two-day trip to New York. I looked in the rear view to a speechless, blank face. Then to my father, in his early 70s, similarly befuddled, wordless.
I had to explain but needed to start at the beginning.
“Back when you were taking us on vacations,” nod to my father, “it was either economy or first class. But back then, a coach flight to New York from Florida on short notice, like we are taking, would have been $400/person in coach. In today’s dollars, that’s $850 for the same flight. That will be important soon.”
Some nods, but mostly understated confusion.
“As fewer people bought first class and companies placed restrictions on what their employees could buy, airlines added business class to fill the gap. Then over the years, people were willing to pay a little bit more for extra legroom. So the airlines invented economy plus. So now we have economy, which is standard for everybody, then economy plus, a little bit nicer, business class and first class on long haul flights.”
They play interested, I’m unconvinced but continue anyway. They are a captive audience, there’s nothing they can do, and at least one of them asked for it.
“But back then standard economy tickets on domestic flights came with extras that included two checked bags up to 50 pounds, a meal on most flights, a personal item, and carry-on; all of that costs the airline money. It makes the plane heavier to fly which means more fuel, it requires more baggage handlers, and not everyone needs all that stuff. So if they don’t the airline can make the price lower by removing those extras. That means more people can afford to fly if they are willing to give up the inclusions. And if they only need to add one checked bag, while extra, it’s still far cheaper than it was 25-30 years ago even after adjusting for inflation.”
“Ok but you were talking about premium economy class minus or something.” She says confused and annoyed.
“Yes, ok, let’s get to that. So now we have Basic Economy, Economy, Economy Plus, Business Class and First Class. There’s a big difference between an upright seat in coach and a lie flat bed especially on a 12-hour flight but not everyone has money for business class. So there was a new cabin they invented and put right in between coach and business class. It’s basically like domestic first class with deeper recline, leg rests, wider seats, priority boarding, and slightly better food.
“Now it’s Basic Economy, Economy, Economy Plus, Premium Economy, Business Class and First Class.”
“But then the airlines realized that there’s some seats in business class with unique additional benefits. You know how the seats are slanted like this where each business class seat has the feet going under the next one in front of it? Well, at the front of business class, there’s no more places for the feet to go underneath them so it leaves this extra space. Airlines have gotten smart and added a seat there so someone can join you for a meal but this is an added feature. That means that there’s an added cost because you’d like to have that seat more than a regular business class, right?” (nods) “That is Business Plus.”
“To review, we have Basic Economy, Economy, Economy Plus, Premium Economy, Business Class, Business Class Plus and First Class.”
“Dad, we still don’t have Basic Premium Economy and we’ve been parked at the terminal for five minutes-” she said losing her patience.
“I’m getting there. Last year, United Airlines and Delta Air Lines thought that there should be a basic business class too.”
“Basic Business Class? But isn’t it fancy?” my Dad asked.
“Yes, but not every trip needs all the extras even in business class. For example, on my last trip, I carried on for my week in France which means I didn’t need the extra two “free” checked bags to be included in the cost of my fare. And I used my credit card for access to a lounge I like better than the airline’s so I didn’t use that benefit either. And frankly, I brought my own dopp kit so I didn’t really need their amenity kit either. And as much as I love the sundae after the meal, I flew from Philadelphia to London which is a pretty short overnight flight, so I didn’t even eat the meal and went straight to bed. I am a perfect example of a Basic Business client. I’d rather save a couple of hundred dollars than have those included benefits I didn’t use.”
“So… Basic Economy, Economy, Economy Plus, Premium Economy, Basic Business Class, Business Class, Business Class Plus and First Class are all available.”
“But you didn’t-”
“And now we have Basic Premium Economy where you get the seat you want but not all the extras for a little bit of savings.” they were ready to say it with me now. “Basic Economy, Economy, Economy Plus, Basic Premium Economy, Premium Economy, Basic Business Class, Business Class, Business Class Plus and First Class.” I felt accomplished and unbuckled my seatbelt. Then my father looked at me.
“Then it’s only a matter of time before we have Premium Economy Premium, and Basic First Class, and First Class Plus and First Class Basic at some point?” My dad asked.
“And just like that you’re an airline analyst.”
Fin.
Conclusion
I am grateful for the opportunity to book flights at a granular level based on my specific needs of a given itinerary. However, the mental gymnastics of trying to explain a series of oxymorons that compromise Basic Premium Economy to either an adult or a child is an act of futility or absurdity – the choice is yours. I hope you enjoyed this levity, a real situation that happened in my life.
Good job highlighting the absurdity that is premium cabin segmentation.
Now that premium segmentation has been covered, will the next airport run lecture include dynamic pricing?
@Maryland – Kind of. Probably more along the lines of how airlines are completely fine with dynamically pricing awards up when demand is high and space is limited but that it doesn’t dynamically price down when demand is at near zero. Case-in-point, during the early days of the pandemic there were $16 one-way fares west coast to east coast on either United or American yet award prices hit a floor of 5,000 each way. That’s nearly nothing, but not relational to how little demand there was. The price can go infinitely up but if demand is zero or close to it, the price will still have an absolute minimum that’s irrespective to the cash price.
It would have helped to play the Sound of Music soundtrack. “ Let’s start at the very beginning, a very good place to start…”
@JoeMart – There definitely was a rhythm to it.
By the way, the DL A350-900 taxiing photo in the article looks amazing…
Yeah, so much for K.I.S.S. with these new branded terms and derivatives of classes within Delta. Such things are a human construct, so they could just as easily change it all again, soon enough. I recall many iterations of ‘Business Elite,’ now ‘Delta One,’ and ‘Comfort+,’ now merely ‘Comfort,’ but what’s included or excluded (lounge access, seat selection, etc.), when you take it away, even for a discount, it feels ‘cheap.’
Very easy.
There are different types of seating in an airplane.
First Class (rare in international flights because many corporate travel policy bans it, which gave rise to business class, even better than first class seating given a business class name)
Business Class (lie flat is very good, often mostly on long distance international flights)
Premium Economy (mostly on international flights, wider seat, and similar to US domestic First Class). The term is also used by some airlines for economy class with just an extra inch or two of legroom. It can have a branded name, like Delta’s Premium Select or United’s Premium Plus.
Economy.
That’s it.
There are fare restrictions, too. Basic economy is the economy seat with more restrictions, such as no miles (except United), last to board, sometimes carry on luggage restrictions, etc.
A few airlines have economy sections with 2 inches or so more of leg room. Delta calls it Comfort. That’s different from Delta’s Premium Select, a wider seat than economy and similar to US domestic first class.
A new concept is having basic economy type restrictions for premium economy.
So just decide what kind of physical seating you want and what type of restrictions you want to tolerate.
I’d love a father like that.