Monday, November 16, 2015

Delta to offer Comfort+ as separate product for US, Canadian flights

Atlanta-based Delta Air Lines will make Delta Comfort+ available for direct purchase, alongside main cabin and first class, for flights departing on or after May 16, 2016, within the U.S. and Canada.

Since being introduced in March 2015, Delta (NYSE:DAL) customers have been able to choose Comfort+ as an enhanced seating option only after purchasing a main cabin fare. While Delta’s web site does give customers the ability to view seat maps prior to purchase, there have no doubt been occasions where customers found that there were no Comfort+ seats available after they had purchased main cabin fares. The carrier’s change will prevent that from happening after Comfort+ debuts as a separate product.

Comfort+ seating
Photo provided by Delta Air Lines
Comfort+ offers priority boarding with dedicated overhead bin space, extra legroom, free craft beer and wine, snacks, and complimentary premium entertainment on most flights, the airline said in a statement announcing the change.

"[B]ased on [our customers’] overwhelmingly positive feedback, we have invested to make Delta Comfort+ even easier to purchase," Tim Mapes, Delta’s SVP of Marketing said. "Customers on Delta can choose from a range of flight experiences based on their particular interests, and we've updated the way search results display on delta.com to showcase the distinct product features that accompany each product."

While Comfort+ is most readily seen on the Delta Air Lines web site and mobile app, the carrier is collaborating with its joint venture partner airlines to ensure customers can view Comfort+ availability on combined itineraries, and it is engaged with distribution partners to allow Delta Comfort+ to be displayed and purchased through travel agents and in consumer direct shopping displays. For Delta-operated international flights, Delta Comfort+ will continue to be sold as an add-on seating option.

The change can also be expected alter the amount of so-called “ancillary revenue” Delta earns.

Delta flight departing SEA for HKG
At present, when an airline offers an economy upgrade, the additional revenue is reported as ancillary revenue, which is revenue from sources other than ticket fares and includes checked bag fees, paid upgrades, airline club memberships, and other sources of income.

With the switch to its own fare class, Delta may be able to report Comfort+ revenue with its standard fares. While that change will not, of itself, affect the ticket price it could prove to be an important public relations move at a time when airlines are reporting large year-over-year increases in their ancillary revenue and are coming under increasing public criticism and regulatory scrutiny as a result.

Delta already reports the lowest percentage of ancillary revenue of the big three U.S. carriers.

In calendar year 2014, Delta reported $40.36bn in total revenue, of which eight percent, or $3.21bn, was identified as ancillary revenue. United Airlines (NYSE:UAL) derived more than 15 percent of its revenue from ancillary sources in 2014, with $5.86bn of its total $38.9bn coming from sources including sales of Economy Plus seating upgrades. American Airlines (NYSE:AAL) derived almost 11 percent of its revenue from ancillary sources, with $4.65bn of its $42.65bn total coming from ancillary sources, according to The Cartrawler Yearbook of Ancillary Revenue complied by IdeaWorksCompany.

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Photos by Carl Dombek unless otherwise noted
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