Delta and The Middle Seat: Will it pay off?

The NYTimes had an interesting data point last week:

“Delta Air Lines lost $755 million in the fourth quarter, bringing its losses to nearly $12.4 billion in 2020, a year in which the airline industry was battered by a pandemic that crippled air travel.”

All airlines are indeed suffering, but

“The bottom line for Delta during the pandemic has been bigger losses than rival airlines selling all their seats. Delta was the most profitable U.S. airline in the final six months of 2019. That flipped during the pandemic. In the last six months of 2020, Delta had the biggest losses, with a net loss of more than $6 billion, greater than United and Southwest combined.”

The WSJ concluded that:

“The grand experiment of blocking the middle seat on airplanes has proved what we have known all along about air travel: More people care about a cheap fare than comfort, or even pandemic safety.”

But, I think the key is the following argument:

“So far, Delta thinks it’s earning goodwill and confidence with customers, particularly business travelers, who aren’t traveling now but will come back. Some who’ve flown during the pandemic have been willing to pay Delta more for more space onboard. Most have been price-sensitive leisure travelers willing to sit shoulder-to-shoulder for cheap fares—on airlines not blocking middle seats.”

I will beg to differ on this, but it is hard to predict the impact since it involves future travel. I can share my own experience and try to shed some light on this projection. I will start with a warning: the next few paragraphs may sound like a “first-world problem” post and somewhat tone-deaf given that we are in the middle of a global pandemic. It is. But I am trying to use my experience to explain why I find their efforts lacking and thus the ROI on these losses to be small.

To the story: I took a flight with Delta right before the end of 2020 for leisure-related travel. I am usually a United and American Airlines customer, and while I had tickets with these two airlines, I canceled both just before the flight and traveled with Delta. The primary motivation was, of course, the added safety. Still, I also thought that maybe I need to think about Delta again (after nearly 15 years of not flying with them) given what I perceived as a more flyer friendly approach. Between the two airlines, I usually fly more than 200K miles a year. Not a consultant, but a loyal flyer, both domestically and internationally.

The argument Delta makes above is based on the notion that you gain and lose customers during times of crisis. However, the failure of Delta’s approach is due to another principle in service management: it’s not about the service, but the gap between the expected service and the actual service. While the airport experience was great, where the TSA-pre agents were doing a great job maintaining distance and minimal touch, the experience pre-during-and post- flight were much less than comfortable and safe.

Note that I don’t know how safe it was. My family members and I wore two different masks (an N95 one and a three-layered cloth one), glasses and didn’t move from our seats for the entire flight duration. None of us contracted COVID-19 on the flight there or back. But it definitely didn’t feel safe. So when I say that it was not said, I really mean that it lacked in terms of the perception of safety.

The next point may sound a little nitpicky. We know that as long as people are masked, contagious levels are low. However, we know that certain activities, which need people to be unmasked, are more dangerous than others. For example, eating in public in a closed environment is fairly infectious (since eating also elicits more saliva). Before every flight,

the entire crew had their pre-flight meal in the boarding area. This is not a complaint about the crew. They need to eat before a long flight. This is a complaint about the airline. You know your employees need to eat, and you know they have to move between flights. Why can’t you organize a place that will be safer for everyone? The optics of that was something several passengers comment on.

An additional point is that the flight still felt quite full. While middle seats are kept empty, this is not the case if all passengers are of the same family. It’s probably also an indictment of how packed the rows are, so you can barely see if the middle seats are empty in the rows ahead of you. In other words, the flight felt full (even if it wasn’t).

But here comes the worst part. While 90% of the people on the flight kept their masks for the entire flight duration (many with two masks just like we had), the 10% that didn’t keep them were quite visible and loud—either constantly talking and calling for people in the other parts of the plane (without a mask) or eating. While Delta doesn’t sell food, it does allow people to bring food. Furthermore, the flight attendants didn’t tell other people to put their masks on unless we asked them to do so.

This brings me to the final point: service is about co-production with significant externalities. The quality of the flight is determined by the plane, the flight attendants, the airport, but also the people around you. If you can’t control what they do, it will degrade the quality of the service. I have been on enough flights to know that when airlines want to be strict with passengers, they can. I have seen none of that during these flights.

The sentence that demonstrated where the failure is is:

“For Delta, the middle-seat block isn’t about safety, Mr. Lentsch says, but a way to give customers “peace of mind” with a little more space on board.”

He is right. It was clear Delta didn’t care all that much about safety. But Peace of mind about what? While I don’t think I should judge Delta too harshly since I don’t think other airlines are doing any better, Delta had a missed opportunity here.