Yesterday I wrote about how Delta is adding a surcharge of $250-500 one-way for flights in their new Delta One Suites, which will soon be available on their A350s. AusBT broke the story, which was discovered based on a notice sent out to travel agents in Korea. Initially we didn’t know if this would only be limited to their Detroit to Seoul Incheon route, how long it would last, etc.
While there are still some questions, we now have some more answers.
The Delta One Suite surcharge applies on all international A350 routes
This surcharge is already in place, and it looks like it doesn’t just apply on the Seoul Incheon route, but also on the Tokyo Narita and Beijing routes, which are the routes on which the new A350 has been announced so far. In looking at the fare rules for a full fare business class ticket between Detroit and Tokyo (or the other two city pairs), you’ll see this listed in the fare rules:
A SURCHARGE OF USD 250.00 WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN AIRBUS INDUSTRIE A350-900 EQUIPMENT.
When you look at the fares, you’ll notice that routings taking you through Detroit (which feature the new plane) are $250-500 more expensive per direction:
This surcharge is added to the base fare, rather than separated out from it. In other words, you’ll just pay more for the privilege of flying this plane across the board, regardless of what kind of a business class fare you book.
Now I certainly could be mistaken, but I think the good news is that it’s unlikely this surcharge will be added on SkyMiles award tickets. I could be wrong, but since it’s added to the base fare, that seems unlikely.
Even so, don’t get too excited. Delta doesn’t publish award costs, and across the board we’re seeing that business class awards on the A350 price out higher than other awards. So while there might not be a cash co-pay, don’t be surprised to see business class awards on the A350 be consistently more expensive than other awards.
Is this really a new practice from Delta?
It actually isn’t. If you look at Delta’s fare between the mainland and Hawaii, you’ll notice that they have surcharges for travel on their aircraft featuring fully flat beds. For example, here’s the relevant part of the fare rules for a ticket between Tampa and Honolulu:
A SURCHARGE OF USD 100.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN AIRBUS INDUSTRIE A330-300 EQUIPMENT. AND – A SURCHARGE OF USD 100.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 777-200LR EQUIPMENT. AND – A SURCHARGE OF USD 100.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 767-400 EQUIPMENT. AND – A SURCHARGE OF USD 100.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 777 EQUIPMENT. AND – A SURCHARGE OF USD 100.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 767-300 WINGLETS EQUIPMENT. AND – A SURCHARGE OF USD 150.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 747-400 PASSENGER EQUIPMENT. AND – A SURCHARGE OF USD 75.00 PER FARE COMPONENT WILL BE ADDED TO THE APPLICABLE FARE FOR TRAVEL IN BOEING 757-200 WINGLETS EQUIPMENT.
In other words, Delta flies both planes with domestic first class seats and fully flat beds between the mainland and Hawaii, and they charge a premium for flying in the better products.
Is Delta’s A350 surcharge greedy & unreasonable?
Yes and no. I understand the concept of charging more for a better product. That’s to say that I totally get why there’s a surcharge for a flat bed product to Hawaii, since the seat takes up much more “real estate,” and that’s expensive. It’s costing the airline more to transport you in those seats.
However, I guess what rubs me the wrong way about this Delta surcharge is that the new A350 “suite” isn’t in any way more spacious than the old product. The A350 is more fuel efficient and has lower operating costs, and on top of that, it’s not at all a spacious product. This is a modified Vantage XL product, which is space efficient. As a matter of fact, I suspect it’s less spacious than the reverse herringbone seats they have on the routes so far.
To give an example, Delta will have 32 Delta One Suites on their A350s between doors one and two. Qatar Airways has a reverse herringbone product on their A350s, and they only have 24 seats between doors one and two. To be fair, though, Finnair fits 32 reverse herringbone seats between those two sets of doors. However, in neither case is Delta’s product more spacious.
So it’s one thing to add a surcharge when your cost for operating a product is up, but in this case this is a more efficient configuration than they had before, and it’s a much lower cost plane.
We’ll have to let the market decide
Ultimately the market will decide whether Delta’s surcharge is reasonable or not. Is this product unique enough that people will go out of their way to fly it, and will even pay a premium for it? Maybe.
Delta wouldn’t be the first airline to add restrictions to booking their newest premium cabin product.
However, I guess what rubs me the wrong way about this is that a full fare business class passenger paying $10,000 for a ticket will be penalized an extra $250-500 for flying a new product. But maybe that’s too principled of a view to take towards this, and doesn’t necessarily reflect how consumers make decisions.
Maybe I was a bit harsh on Delta initially. I’m not sure. I guess we’ll have to wait and see how long this sticks around.
On the most basic level, I question how much a new product really increases demand. Sure, among us miles & points people this is exciting, but how many business travelers are going to change their plans to fly this new product?
If demand does actually increase when a new product is introduced, there are two ways to approach it — you can decrease the number of discounted business class fares you publish in the market, or you can add a surcharge. The surcharge just strikes me as a punitive way to handle this.
It’s one thing if the seat took up more space, but it doesn’t. Quite to the contrary, the aircraft is more fuel efficient, as the cost per flown mile per business class seat is going down with this plane, and not up.
I guess we’ll see whether this surcharge sticks around.
Where do you stand on this, now that we have more details?