Delta, boosted by premium ticket sales, says customers who go Comfort+ don’t go back
Delta’s third-quarter revenue beat Wall Street estimates on Thursday, led by 9% growth in its premium ticket category.
The lines for boarding zones 1 through 3 are about to get even longer, if Delta Air Lines is to be believed.
In its earnings call Thursday following the release of its better-than-expected third-quarter results, Delta executives highlighted the carrier’s strength in premium ticket sales. The category, which includes first class and business seats, grew 9% in the third quarter, compared to a 4% drop in economy ticket sales.
Delta sang the category’s praises, with CEO Ed Bastian saying that he thinks premium could overtake main cabin sales in a few quarters next year. The company has previously said it expects premium to eclipse economy by 2027.
According to Delta President Glen Hauenstein, premium has been boosted by repeat customers.
“I’ve equated it to: the car that you drive today, is it better than the first car you had? The answer is probably yes, and you don’t see many people going back to cars that are worse,” Hauenstein said. “I think once people get used to traveling in a certain product, whether it’s Comfort+, Delta Premium Select, or Delta One, they tend not to go back. Their retention rates are in the mid-80s.”
In the past decade, premium products like Comfort+ — which, according to Nerdwallet, offers about three extra inches of legroom — have grown from loss leaders to become the carrier’s highest-margin products, Hauenstein said.
Delta shares rose as much as 9% Thursday from Wednesday’s close, though gains pared down to about 4% by the late afternoon.
