Delta to test new fare 'subcategories' in 2025; ponders higher-end Amex credit card
Take your pick: Basic economy, standard economy or…. something slightly better, but pricier?
Delta Air Lines is planning to introduce a new, third tier to its coach product in the coming months, executives confirmed Wednesday.
It's part of a larger unbundling plan the carrier has, which could eventually see Delta offer customers a wider swath of fare options — "good, better, or best" as they're calling it — throughout each section of its aircraft.
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"We've got all these different cabins on the airplane. But we really think there's another way to segment them," Delta president Glen Hauenstein explained, speaking in New York Wednesday at the Atlanta-based carrier's annual investor day.
It's a change that could ultimately mean a wider menu of ticket options when you're shopping for airfare. But it could also leave customers wondering if they'll ultimately see higher prices to get services currently included in a plane ticket.
Trying the new 'good, better, best' concept
Delta will begin a trial run of these new fare "subcategories" in 2025, Hauenstein said. He noted that the carrier plans to roll the concept out "from the bottom, up" — meaning, coach comes first.
Today, like its top competitors, Delta already offers two main coach products: full-fare economy and basic economy. The latter strips out certain benefits like SkyClub access, SkyMiles earnings and complimentary seat selection for travelers who spring for Delta's lowest-fare ticket.
Basic economy was, from the outset, a product created in the 2010s as a way for the large network airlines to become more competitive with ultra-low-cost carriers offering low-base-fare, no-frills tickets.
But with increasingly sophisticated technology at their disposal, airlines are finding new ways to offer a wider menu of ticket types, with varying perks — and varying services that are excluded.
To start, Delta is planning to test a coach product that would essentially be the opposite of basic economy: a pricier main cabin tier that packs slightly better benefits than a standard coach ticket (or, at least, what a standard coach ticket would be in the future).
"We're halfway there in terms of coach product, the main cabin product," Hauenstein said Wednesday, referencing the existing basic economy option. "But [could] we have kind of a 'best' in that category — which we don't really have?"
Exactly what would a higher-end main cabin product look like at Delta? Could we see entirely new perks like better snack or beverage options? Might it include something simpler like a free checked bag? Could Delta effectively strip away certain services currently included in a traditional coach ticket — making you buy up to the "elevated" main cabin fare to get those benefits?
It's too early to say right now: Delta isn't making any formal announcement about its plans to create new ticket "subcategories" just yet.
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"We're going to test and learn along the way," Hauenstein said.
It's worth noting that Delta competitor American Airlines currently sells a "main select" ticket that comes with benefits like an earlier boarding group, free access to its extra-legroom Main Cabin Extra seats, and free same-day confirmed flight changes.
Beyond selling basic economy tickets, Delta does currently offer customers higher-priced main cabin tickets that are fully refundable, as shown below. It offers similar upcharges for refundability in other cabins, too.
But the airline's long-term vision is to expand this "good, better, best" fare idea beyond coach. By the end of 2025, in fact, Hauenstein said the carrier hopes to trial new subcategories of its Comfort Plus section of the plane, too.
It's part of Delta's effort to further boost its profits, which have largely led the U.S. airline industry in recent years.
"I think over the next couple of years you'll see us ... really testing with what consumers want in their bundles, and what they're willing to pay for," Hauenstein told analysts Wednesday. "I think we're going to transform ourselves over the next three to five years."
These revelations come after Hauenstein seemed to tease Delta's planned ticket "subcategories" when asked, on the company's July earnings call, whether Delta had considered an unbundled "basic business" fare.
Collectively, it bears watching whether these changes ultimately work in customers' favor — or whether passengers end up having to pay extra to get certain services currently included in today's ticket price. Again, these trials are expected to unfold over the coming years.
New high-end Delta credit card on horizon?
Delta executives also used Wednesday's investor day to introduce a little intrigue about the future of its cobranded American Express credit card portfolio.
Right now, the airline's highest-end consumer credit card is the Delta SkyMiles® Reserve American Express Card. It carries a $650 annual fee (see rates and fees) and comes with perks like an annual companion ticket for travel on Delta and SkyClub access (albeit capped at 15 annual visits beginning Feb. 1, 2025).
The airline also offers lower-tier cards, such as the Delta SkyMiles® Platinum American Express Card, for lower annual fees.
"We've got the Reserve Card out there," Hauenstein said Wednesday.
"But is there even a better card?" he pondered aloud. "We'll put on our thinking caps on that."
Delta has an incredibly lucrative partnership with Amex. The carrier expects to rake in more than $7 billion this year through the tie-up, up from roughly $4 billion just five years ago in 2019. Long term, the carrier has its sights set on making $10 billion annually through its Amex deal.
While it's almost hard to imagine a credit card with a meaningfully higher annual fee than the Delta Reserve Amex, the company regularly touts its affluent customer base. It says that customers swipe their Delta Amex cards to the tune of nearly 1% of the U.S. gross domestic product.
Related reading:
- Your complete guide to the Delta SkyMiles program
- Best Delta credit cards
- What is Delta Air Lines elite status worth?
- Maximize your airfare: The best credit cards for booking flights
- The best credit cards to reach elite status in 2023
- How to survive basic economy on Delta Air Lines
For rates and fees of the Delta SkyMiles Reserve, click here.
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