Delta Is About To Offer The Ultimate Paid Upgrades

Early last year I had the opportunity to fly on a Gulfstream IV between Seattle and San Diego, which changed my perspective on commercial aviation a bit. Being able to skip security and walk right onto a private jet is an incredible experience.

Gulfstream-2

The funny thing is that I walked away from it seeing the value for domestic travel, though for longhaul travel I almost felt like I’d still prefer a top first class product. After all, unless you have a Boeing Business Jet or are the Qatari royal family, a private jet can only get so spacious (though that won’t stop Creflo Dollar from “believing” God for one).

Gulfstream-1

But Delta is trying something now which is truly unique. While we all know that Delta has a huge fleet of commercial planes, most people don’t realize that Delta also has a fleet of 66 private jets, which is in a separate business unit.

Delta is the master of trying to squeeze extra revenue out of passengers, and they’ve just found yet another way to do that. Via BloombergBusiness:

Delta Air Lines is cooking up what may be one of the most appealing flight upgrades yet: one that allows you to bag a commercial flight altogether and board a private jet.

The new upgrade program, targeted at what Delta calls “high-value customers,” will cost $300 to $800, depending on destination. Beginning as soon as this week, passengers who have achieved elite or “medallion” status in Delta’s SkyMiles frequent-flyer program will be eligible for the upgrade offers. But officials stress that the initial number of private jet flights will be small and focused mainly at Delta’s East Coast hubs.

The intention is that within 24-48 hours, select Medallion members will be offered paid upgrades to swap their commercial flights for private jet flights. These won’t be “breakeven” flights for Delta as such. Instead, these opportunities will arise when there are “empty leg” flights. That’s basically when a private jet needs to be positioned to another airport, so would otherwise be flown empty.

By offering this program, Delta is hoping to accomplish two things:

  • Generate some incremental revenue. While $300-800 isn’t “breakeven” for any segment as such, it is incremental revenue if the plane would have otherwise flown empty.
  • Convert some high value customers into private jet customers. I do think Delta is slightly overestimating their average Medallion’s willingness/ability to spend here. Yes, they might spend $300-800 for an empty leg flight, but a vast majority of high value customers aren’t in a position to fly private (after all, much of this travel is corporately funded, with the “high value” coming from the frequency with which they fly).

Bottom line

This is incredibly innovative on the part of Delta. They are the masters of generating incremental revenue, and this is yet another example of that. For those few Medallion members who are targeted with such an offer, this will be an awesome opportunity. That being said, given how many Medallion members there are and how few empty leg private jet flights there are, I wouldn’t count on getting this offer anytime soon.

What would you be willing to pay to “upgrade” from commercial flying to a private jet on a short East Coast hop?

Gulfstream-3

(Tip of the hat to Abdel Rahim)

Comments

  1. It will be interesting how they target these select few. I would imagine they could build some algorithm to determine likelihood to pay for the upgrade based on past history of paying for upgrades, channel through which the tickets are generally purchased (i.e. corporate travel portal vs. directly through the DL site), overall spend, etc. Or maybe I’m overthinking it. Also, I assume these would run on their own schedules, although somewhat aligned to existing commercial flights, so the upgrader would probably need to adjust his expectations for departure/arrival times and locations, given that the GA entrances are distinct from the regular commercial service terminals.

  2. If you are flying with your family or coworkers (or not even) can you bring them along and fill the jet?

  3. This is great! But then the availbility for this kind of upgrade looks to be opportunistic though. I would definitely fly one of those over domestic business class. Buses don’t compete with private cars after all, unless we are talking about the shower on A380 on long haul of course

  4. Interesting… Looks like they are aiming to make some money themselves instead of letting brokers or sites like JetSmarter market the empty legs.

    @ Lucky – in case you didn’t know, JetSmarter started selling seats on their private “JetShuttles” for $899/seat ($0 if you are a member). Right now I see San Francisco Los Angeles and Ft. Lauderdale New York, but I’m pretty sure there are LA Vegas shuttles as well.

    That seems like a much better deal compared to Delta because you don’t have to shell out for a first-class ticket first 🙂

  5. @ AdamH — If you have multiple people travelling, going through a broker or a site that finds empty legs may be a better deal because empty legs are priced per plane so it generally doesn’t matter how many people you bring aboard 🙂

  6. This seems exciting and would happily pay for the “upgrade”. My guess is they will use this only on oversold commercial flights where this could open up extra capacity to sell.

    Two questions I have:

    1) Would this only be people paying for F as opposed to say a Diamond on a coach fare?
    2) Most dead-head flights don’t come with any amenities other than maybe some snacks and water/soft drinks. Given this is an “upgrade”, would DL provide full meal service and drink? If so, do you think they would be standard F meals/drinks or their typical private jet offerings. If they are trying to get people engaged in their private jet product, I wonder if they would provide the full catering?

  7. @ Nick – I just wish Delta would bring back the $50,000 entry point…maybe next recession. If my partner and I had the cash, we would seriously consider plopping down $50,000 for 35 months of Delta flights (I assume you could use the last of your deposit at the 24 month mark for travel up to 11 moths later, but I may be wrong).

  8. @ Ben — Do you think it is safe to assume these private jet upgrades will be offered to passengers paying for F already, rather than upgrades from Y?

  9. I never knew Delta had a private jet business unit. Agreed this is an innovative upgrade programme.

  10. @David

    “If they are trying to get people engaged in their private jet product, I wonder if they would provide the full catering?”

    According to Delta, it seems like it:
    “Customers will be contacted by Delta Vacations via email and offered the upgrade for a fee, which includes transportation to the airport’s private aviation area and complimentary on-board catering.”

    http://news.delta.com/ultimate-upgrade-delta-private-jet

  11. @Noah: Yes, but it’d be the same MQMs as in the original flight you would have taken instead.

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