DL Reduces Partner Miles & Devalues Fqtv Yet Again
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robbedagain
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- Oct 13, 2003
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DL keeps that up they may lose a lot of their "top" people
jimntx
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Not a chance. Their "top" people are too impressed with DL's Moonthumbs per available seat gallon statistic to change airlines just for better benefits. If you're not familiar with that particular statistic, see post #2 on this thread. http://www.airlineforums.com/topic/57787-fantasy-financial-metrics/
WorldTraveler
Corn Field
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we've been over this before but for review, companies have loyalty programs to help keep customers, wait, wait, loyal and paying the revenue that airlines need.
This is not the first revision of DL's Skymiles program. If DL was doing it all wrong, then DL's customers would vote with their wallets and DL would figure it out.
That isn't happening or DL couldn't have the highest RASM growth at least among the legacy carriers and perhaps all of the industry over the past several years PLUS the highest absolute RASM.
DL customers are staying with DL and spending even more money to fly with DL.
DL simply doesn't have to give away as much of its product as it used to or what other carriers do.
it's also worth noting what airlines are in the first group and who is much further down the list.
DL's strongest JV partners including Skyteam heavyweights AF/KL are in group 1 but so is Gol and, believe it or not, AS.
KE, a founding member of Skyteam, is lumped in with Hawaiian and Great Lakes. that should tell you a whole lot about how DL intends to incentivize passengers who fly on those carriers and thus its overall gains from those carriers.
This is not the first revision of DL's Skymiles program. If DL was doing it all wrong, then DL's customers would vote with their wallets and DL would figure it out.
That isn't happening or DL couldn't have the highest RASM growth at least among the legacy carriers and perhaps all of the industry over the past several years PLUS the highest absolute RASM.
DL customers are staying with DL and spending even more money to fly with DL.
DL simply doesn't have to give away as much of its product as it used to or what other carriers do.
it's also worth noting what airlines are in the first group and who is much further down the list.
DL's strongest JV partners including Skyteam heavyweights AF/KL are in group 1 but so is Gol and, believe it or not, AS.
KE, a founding member of Skyteam, is lumped in with Hawaiian and Great Lakes. that should tell you a whole lot about how DL intends to incentivize passengers who fly on those carriers and thus its overall gains from those carriers.
eolesen
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- Jul 23, 2003
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Yes, we're all aware of the caste system of partnership that DL has, and how that serves DL's interest first, and the alliance last. And from a purely business standpoint, it probably wasn't difficult to justify or to find the data to justify it internally.
What's ironic is that DL made a big deal out of pushing for alliance-wide standards such as SkyPriority, but still engages in segmenting their partners far more than any other alliance partner seems to. With other airlines, you're either an alliance partner, or a bi-lateral partner.
That type of confusion is a big reason why I didn't switch over to DL when I made a choice to split up my flying instead of staying 90% on AA a few years back. LH and UA won half my business because UA didn't exude the "we only partner with each other out of necessity" attitude I sense from DL.
What's ironic is that DL made a big deal out of pushing for alliance-wide standards such as SkyPriority, but still engages in segmenting their partners far more than any other alliance partner seems to. With other airlines, you're either an alliance partner, or a bi-lateral partner.
That type of confusion is a big reason why I didn't switch over to DL when I made a choice to split up my flying instead of staying 90% on AA a few years back. LH and UA won half my business because UA didn't exude the "we only partner with each other out of necessity" attitude I sense from DL.
WorldTraveler
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all you really needed to do is explain why CX won't have a JV with AA and AA has to turn to JL to have a JL partner to share the risk of operating its 8000 mile DFW-HKG flight.
What kind of alliance standards or cooperation does that represent?
newsflash: all carriers, no all profit-minded companies, do what is in their interest and that involves different types of business relationships with some companies and less relationships with other.
and, in case you missed it, DL didn't ever sign any agreement to run its business the way every other carrier does. that is probably why they have led the industry in profitability, revenue growth, and market value of the company for years
What kind of alliance standards or cooperation does that represent?
newsflash: all carriers, no all profit-minded companies, do what is in their interest and that involves different types of business relationships with some companies and less relationships with other.
and, in case you missed it, DL didn't ever sign any agreement to run its business the way every other carrier does. that is probably why they have led the industry in profitability, revenue growth, and market value of the company for years
eolesen
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I think you're confusing public policy and customer service, (edited by moderator).
CX can't do an immunized JV because Beijing won't allow it. Period. It's the same reason that DL doesn't have a JV with either MU or CZ, and why UA can't do one with CA. And that's verbatim from senior people at both CZ and MU, by the way. Not that they'd know any more about the issue than an early-outed mid-level manager from DL would...
The alliance product offerings between JL, CX, and AA? The mileage accrual and elite qualification points I got flying on CX, KA, JL, and AA were identical, regardless of whose ticket stock the itinerary was plated on.
Again, DL will do what's best for DL. No question. It's not always what's best for customers, and it shows.
CX can't do an immunized JV because Beijing won't allow it. Period. It's the same reason that DL doesn't have a JV with either MU or CZ, and why UA can't do one with CA. And that's verbatim from senior people at both CZ and MU, by the way. Not that they'd know any more about the issue than an early-outed mid-level manager from DL would...
The alliance product offerings between JL, CX, and AA? The mileage accrual and elite qualification points I got flying on CX, KA, JL, and AA were identical, regardless of whose ticket stock the itinerary was plated on.
Again, DL will do what's best for DL. No question. It's not always what's best for customers, and it shows.
WorldTraveler
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If it wasn't what was best for customers, then the revenue would show it.
If AA and UA's approach to their alliances was the best, the revenues would show it.
both have average fare deficits to DL.
DL does what is best for the company and passengers manage to find it at least acceptable.
UA will follow DL; they have consistently shown that they will wait for DL to take the risk of showing them the value of strategic decisions regarding FF program and then follow DL. or else
AA, like most of its strategic decisions is two steps behind and headed down the wrong road.
if AA wants to give away FF miles without being to show the value associated with them, then that is AA's choice.
but DL has taken the approach of demanding evidence of a business benefit for everything does and that includes from its partners.
whether you like it or not, some carriers do deliver more value than others and have more strategic benefit to DL just as exists at any other airline.
If AA and UA's approach to their alliances was the best, the revenues would show it.
both have average fare deficits to DL.
DL does what is best for the company and passengers manage to find it at least acceptable.
UA will follow DL; they have consistently shown that they will wait for DL to take the risk of showing them the value of strategic decisions regarding FF program and then follow DL. or else
AA, like most of its strategic decisions is two steps behind and headed down the wrong road.
if AA wants to give away FF miles without being to show the value associated with them, then that is AA's choice.
but DL has taken the approach of demanding evidence of a business benefit for everything does and that includes from its partners.
whether you like it or not, some carriers do deliver more value than others and have more strategic benefit to DL just as exists at any other airline.
WorldTraveler
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yes, I was aware of that. and that is still a more restrictive upgrade policy than the rest of DL's system has.
and it also validates that DL does listen to its customers - just like you did with AA and its catering and my point that if DL's customers push back on DL's revenues, DL will feel it and respond.
DL is a profit-oriented business and will make whatever changes it needs to within the realm what makes money for the company and what customers are willing to pay.
btw, glad to see you back here and don't know why anyone gave you a negative vote for your post.
and it also validates that DL does listen to its customers - just like you did with AA and its catering and my point that if DL's customers push back on DL's revenues, DL will feel it and respond.
DL is a profit-oriented business and will make whatever changes it needs to within the realm what makes money for the company and what customers are willing to pay.
btw, glad to see you back here and don't know why anyone gave you a negative vote for your post.
topDawg
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AA doesn't have a JV with CX because China is not an open skies market. (HKG is a more liberal part of the bilateral but still not a true open skies)WorldTraveler said:
As for JAL well yes, AA and JL have a Pacific JV. I also believe that ANA is a JV partner with United on routes like ORD-PEK. (even with the Air China hub at PEK)
your point is not logical.
WorldTraveler
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and DL does have antitrust immunity with Korean but not a JV. I don't know how DL and KE talk but they have the legal right to do so.
I also don't buy the argument that CX could not be a joint venture partner to AA if they wanted it to.
HKG is governed by a separate air services agreement but even China and the US have discussed Open Skies and JVs before.
I'm not aware of all of the legal issues but if HKG can be a destination for a JV, it is hard to argue that CX couldn't be a JV partner if it wanted to. As a destination, much of the focus of where JVs are allowed regards availability of infrastructure for competition. HKG has it better than some cities in Asia including both Tokyo airports and yet the US has Open Skies with Japan and allows JVs with Japanese carriers.
I'm not sure why CX couldn't have a JV with a US carrier but I suspect it is because they don't want one. Given that KE isn't interested in a JV with DL, it appears that there is a difference between European and Asian carriers and their desire to have JVs with US carriers.
JL sees the need to have JVs with AA in other parts of Asia outside of Japan because they see the market shifting to nonstops which will hurt the Japanese based carriers.
as much as some would like to argue otherwise, alliances do not create the same types of business relationships with each carrier in the alliance.
Every carrier in an alliance will pursue what is in their best interests... DL just happens to not put up a front on the Skymiles program to make its passengers believe there is unity behind the scenes if there is not.
I also don't buy the argument that CX could not be a joint venture partner to AA if they wanted it to.
HKG is governed by a separate air services agreement but even China and the US have discussed Open Skies and JVs before.
I'm not aware of all of the legal issues but if HKG can be a destination for a JV, it is hard to argue that CX couldn't be a JV partner if it wanted to. As a destination, much of the focus of where JVs are allowed regards availability of infrastructure for competition. HKG has it better than some cities in Asia including both Tokyo airports and yet the US has Open Skies with Japan and allows JVs with Japanese carriers.
I'm not sure why CX couldn't have a JV with a US carrier but I suspect it is because they don't want one. Given that KE isn't interested in a JV with DL, it appears that there is a difference between European and Asian carriers and their desire to have JVs with US carriers.
JL sees the need to have JVs with AA in other parts of Asia outside of Japan because they see the market shifting to nonstops which will hurt the Japanese based carriers.
as much as some would like to argue otherwise, alliances do not create the same types of business relationships with each carrier in the alliance.
Every carrier in an alliance will pursue what is in their best interests... DL just happens to not put up a front on the Skymiles program to make its passengers believe there is unity behind the scenes if there is not.
eolesen
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Beijing will not allow CX into a JV. Period.
HKG may have its own air service agreement, but it's entirely controlled by Beijing, and there's no circumstance I would expect where they'd grant CX permission to enter into a JV or an immunized alliance while the three State Owned airlines cannot (or will not be allowed to) do so.
They might allow it for a smaller privately held entity such as Hianan, but not for CX, and not for Hong Kong. The political ramifications of that would be huge, especially after all of the pro-independence demonstrations which were quashed a few weeks back.
You don't have to believe me on that, WT. Go ask senior leadership at MU and CZ. They're the ones I talked with.
HKG may have its own air service agreement, but it's entirely controlled by Beijing, and there's no circumstance I would expect where they'd grant CX permission to enter into a JV or an immunized alliance while the three State Owned airlines cannot (or will not be allowed to) do so.
They might allow it for a smaller privately held entity such as Hianan, but not for CX, and not for Hong Kong. The political ramifications of that would be huge, especially after all of the pro-independence demonstrations which were quashed a few weeks back.
You don't have to believe me on that, WT. Go ask senior leadership at MU and CZ. They're the ones I talked with.
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