Delta Air Lines is doubling down on premium customers after budget rival Spirit went bust
There’s going to be first class, business class, and so much more...
Between fast-track security, lounge access, speedy boarding, and, of course, the class of ticket you buy for the flight itself, there are already a lot of ways airlines can convince you to spend money to make your journey just that little bit more comfortable.
Now, Delta wants to go even further. At an investor day on Wednesday, the airline announced a “further segmentation” of its six cabin classes — ranging from bare-bones Basic Economy and standard Main Cabin to the slightly refined Premium Select and highest-class Delta One — where each upgrade adds more perks (including the iconic Shake Shack burger) as well as extra legroom.
While Delta Air Lines hasn’t revealed exactly how it will repackage its fare options, the company shared that it plans to start with the Main Cabin and work its way up. Ultimately, its strategy is clear: doubling down on its “premium” categories, which are set to make up as much as 85% of newly added seat capacity next year, with two new premium-focused aircraft models also in the pipeline.
While the no-frills airline Spirit filed for bankruptcy earlier this week, premium cabins are soaring — particularly among millennials (Delta’s fastest-growing customer segment), who are willing to splurge on luxury travel. And airlines are cashing in: Delta’s premium seats, though making up less than a third of its fleet, raked in $5.3 billion of revenues in Q3, nearly catching up to the $6.3 billion from Main Cabin. By 2027, Delta expects premium-ticket revenue to outpace Main Cabin sales.
Premium seats aren’t just a revenue driver; they’re becoming critical to Delta’s bottom line, which has been hit hard this year by sharply rising fuel and labor costs in Q2, followed by Q3’s CrowdStrike outage, which led to a 26% annual drop in profit. Still, Delta leads its competitors in squeezing value from its fleet: the airline earned 20.6 cents for every seat it operates (and each mile it’s flown) in Q3, outperforming United (18.2 cents) and American (18.04 cents).
