Dive Brief:
- Delta Air Lines is focusing on premium experiences to maintain revenue growth and offset higher fuel and other related costs, executives said on a Q2 2024 earnings call Thursday.
- Revenue from Delta Premium Select seats was up 10% compared to Q2 2023, outperforming main cabin growth, according to President Glen Hauenstein. The airline’s overall revenue was up 5.4% year-over-year to $15.4 billion.
- “The cost to serve has gone up for everybody, but especially for the discounters, and the only way you can cover that is providing a better experience,” CEO Ed Bastian said during the call.
Dive Insight:
Delta is forging a strategy around consumers shifting their preferences from the airline with the cheapest fare to the company with the best travel experience.
The cost to operate flights is on the rise across the industry, according to Bastian. Multiple rival airlines raised their luggage fees earlier this year, and Delta soon followed suit.
An emphasis on excellent service across the entire trip will help Delta differentiate itself from the competition despite similar fee increases, according to Bastian.
Delta’s plans include adding more premium seats to its aircraft. Additionally, the company opened a Delta One Lounge, featuring premium amenities like fine dining and spa treatments, at JFK Airport in New York City last month. The airline plans to open lounges in Boston and Los Angeles later this year and Seattle in early 2025.
Airport lounges and in-flight legroom can bolster other customer-centric experiences, according to Bastian.
“Premium is also based on a foundation of overall reliability and service, first and foremost,” he said.
The company achieved a 99.5% flight completion rate in Q2 2024, Dan Janki, EVP and CFO at Delta, said during the call.
The airline reported 39 days without cancellations in the first half of 2024, more cancel-free days than all of 2023 combined, Janki said.
