Delta will offer new fare “subcategories” starting in 2025

Choose: basic economy, standard economy or… something better but more expensive?

Delta Air Lines plans 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 in place that could eventually see Delta offer customers a wider range of fare options — “good, better or the best,” as it calls it. they call – in every section of his aircraft.

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“We have all these different cabins on the plane. But we really think there’s another way to segment them,” explained Delta President Glen Hauenstein, speaking in New York on Wednesday at the Atlanta-based company’s annual investor day.

It’s a change that could eventually mean a wider menu of ticket options when shopping for airline tickets. But it could leave customers wondering if they’ll eventually see higher prices to get services currently included in an airline ticket.

Trying the new “good, better, best” concept.

Delta will begin a trial period of these new fare “subcategories” in 2025, Hauenstein said. He noted that the carrier plans to roll out the “bottom-up” concept, meaning the coach comes first.

Today, like its top competitors, Delta already offers two main coach products: full-fare economy and basic economy. The latter removes certain benefits such as SkyClub access, SkyMiles earnings and free seat selection for travelers looking for the lowest-fare Delta ticket.

Basic economy was, from the start, a product created in the 2010s as a way for large network airlines to become more competitive with ultra-low-cost carriers offering low base fare tickets without fares .

But with increasingly sophisticated technology at their disposal, airlines are finding new ways to offer a wider menu of ticket types with various benefits – and various services that are excluded.

For starters, Delta plans to test a coach product that would essentially be the opposite of basic economy: a more expensive main cabin level that packs down easily. better benefits than a standard coach ticket (or at least what a standard coach ticket would be in the future).

“We’re halfway through the coach product, the main cabin product,” Hauenstein said Wednesday, referring to the existing basic economy option. “But (could we) have some kind of ‘best’ in that category — that we don’t really have?”

Just what would a state-of-the-art main cabin product look like at Delta? Could we see entirely new benefits, like better snack or drink options? Could it include something simpler like a free checked bag? Could Delta effectively eliminate certain services currently included in a traditional coach ticket, forcing you to buy up to the “high” main cabin fare to get those benefits?

It’s too early to tell right now: Delta has yet to make any official announcements about its plans to create new “subcategories” of tickets.

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“We’ll test and learn along the way,” Hauenstein said.

It’s worth noting that Delta’s competitor, American Airlines, currently sells a “prime select” ticket that comes with benefits like an earlier boarding group, free access to its extra main cabin seats with extra legroom, and free changes flight confirmed on the same day.

In addition to selling basic economy tickets, Delta currently offers customers higher-priced main cabin tickets that are fully refundable, as shown below. They offer similar refund charges in other cabins as well.

But the airline’s long-term vision is to expand this “good, better, best” fare idea beyond bus. By the end of 2025, in fact, Hauenstein said the carrier hopes to test new subcategories of the plane’s Comfort Plus section as well.

It’s part of Delta’s effort to further increase its profits, which have largely led the US airline industry in recent years.

“I think in the next couple of years you’re going to see us … really testing what consumers want in their packages and what they’re willing to pay for,” Hauenstein told analysts on Wednesday. “I think we’re going to transform in the next three to five years.”

The revelations come after Hauenstein appeared to tease Delta’s planned “subcategories” of tickets when asked on the company’s July earnings call whether Delta considered a unbundled tariff for “basic business”.

Collectively, it remains to be seen whether these changes ultimately work in favor of customers – or whether passengers end up having to pay extra to get certain services currently included in today’s ticket price. Again, these studies are expected to take place in the coming years.

A new luxury Delta credit card on the horizon?

Delta executives also used Wednesday’s investor day to drop a little intrigue about the future of its co-brand. American Express Credit Card Portfolio.

At this time, the highest rated airline consumer credit card is Delta SkyMiles® Reserve American Express Card. It involves an annual fee of $650 (see tariffs and taxes) and comes with perks like an annual companion ticket for travel with Delta and SkyClub access (though capped at 15 visits annually starting February 1, 2025).

The airline also offers lower tier cards such as Delta SkyMiles® Platinum American Express Cardfor lower annual fees.

“We have the backup card there,” Hauenstein said Wednesday.

“But is there a better book?” he thought aloud. “We’ll put our thinking caps on it.”

Delta has an incredibly profitable partnership with Amex. The carrier expects to earn more than $7 billion this year from the deal, up from about $4 billion just five years ago in 2019. Longer term, the carrier aims to earn $10 billion annually through its deal with Amex.

While it’s almost hard to imagine a credit card with a significantly higher annual fee than the Delta Reserve Amex, the company regularly promotes its affluent customer base. Customers swipe their Delta Amex cards to the tune of nearly 1% of US gross domestic product, it says.

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For Delta SkyMiles Booking rates and fees, click Here.