Delta Air Lines, led by CEO Ed Bastian, is in the midst of a turbulent shakeup, with its loyalty program, SkyMiles, at the center of the controversy. The recent series of changes and rollbacks have left loyal SkyMiles members and investors perplexed and frustrated. Bastian, now often affectionately referred to as “Fast Eddie,” seems to be telling two different stories to two very different audiences, leaving many to wonder about the future of Delta’s loyalty program.
The September Shakeup
In September, Delta announced sweeping changes to its SkyMiles program, sending shockwaves through the frequent flyer community. The key alterations included a shift to revenue-based elite status qualification with staggeringly high spending thresholds, and a significant reduction in SkyClub access for Delta Reserve and AmEx Platinum cardholders. These changes left many loyal SkyMiles members reeling and questioning their loyalty to the airline; many have already left Delta for competitors, with United reporting record interest in status matches.
Delta announced some partial rollbacks to the changes earlier this month. However, it was, for many, too little, too late. My predictions turned out to be fairly accurate; the elite status thresholds were lowered by 16-20%, and while AmEx SkyClub visits will still be capped, caps were increased by 50-67%. While these rollbacks offered some immediate relief, the underlying issues and concerns persisted. Once trust is broken, it’s tough to repair, and Bastian’s comments to investors aren’t exactly helping the situation.
Fast Eddie’s Mixed Messages
Now, Fast Eddie is back in the spotlight, but this time, he is addressing investors. He stated, “There were some things that we did that I thought were maybe too aggressive in trying to get to that equilibrium quickly. We pulled back and said we’ve got to go at this at a much more measured pace.” In essence, Bastian seems to suggest that the originally announced changes are still on the horizon; his only regret is that they were implemented too hastily.
This mixed messaging leaves SkyMiles members and investors in a state of uncertainty. If I were a SkyMiles elite member, even with the rollbacks announced this month, I’d still be wondering whether it’s time to explore greener pastures with other loyalty programs like American Airlines’ AAdvantage or United’s MileagePlus. Bastian’s statements are effectively saying, “We still intend to pull the rug out from under you; we’re just pulling it more slowly.”
The Delta Perspective
Bastian’s comments on Delta’s need for balance, especially in light of increasing demand for premium services, are not completely without merit. The airline must strive to provide a premium experience while maintaining its stability. However, the execution of these changes and the communication with loyal customers have been nothing short of awful, alienating their elites to placate investors.
Bastian’s remarks about the economic landscape and the importance to Delta of the top 40% of consumers with household earnings of $100,000 or greater provide insight into Delta’s strategic thinking. The overarching message here is that unless you are wealthy and dropping nearly $30k a year on airfare, Delta doesn’t care about you.
Delta’s SkyMiles program is in a state of flux, with changes and rollbacks creating a sense of unease among its members and investors. Bastian’s mixed messages about the future of SkyMiles have only added to the uncertainty. While there may be a tiny bit of merit behind the changes, the execution and communication could have been handled much more transparently and thoughtfully. SkyMiles members must now weigh their loyalty against their desire for a stable and rewarding loyalty program, while investors closely monitor how Delta’s strategy will impact the airline’s financial performance in the long run. Only time will tell whether Delta’s “Fast Eddie” can navigate these challenges successfully.