Delta is improving the economy experience to get passengers to pay more
Delta Air Lines sees a revenue opportunity in its rollout of long-haul economy class service improvements that it announced earlier this week.
While traveler comfort was a part of the reason for making the investment, Delta CFO Paul Jacobson told investors Thursday that there is a direct line from more comfortable passengers to higher fares and, in turn, better profits.
“Our net promoter scores have translated in direct correlation to the revenue premium we’re able to achieve over the industry," he said at the Baird Global Industrial Conference. In test markets, Delta has seen a 5-point improvement in its net promoter scores -- a measure of customer's loyalty to a brand and willingness to recommend it to others -- from the economy class improvements.
Put more simply, Delta says it is able to charge more for seats on its flights when people are more satisfied with the service.
Delta made the changes to its economy service on flights of 6.5 hours or longer. Elements include a complimentary Bellini and hot-towel service shortly after takeoff, more meal choices with larger portions, snacks available throughout the flight and a goodbye chocolate before landing.
Jacobson called the improvements "relatively unprecedented" in the U.S. airline industry.
Delta is already the most financially successful of the big three U.S. network carriers. The airline is rated investment grade -- a metric that gives investors confidence in the company and lowers its cost of debt -- and is known for innovative moves, from developing its own wireless inflight entertainment system to leading the industry on replacing cramped regional jets with larger models like the Airbus A220.
To date, neither American Airlines nor United Airlines have announced similar changes to their long-haul economy service.