In fact, it just might count as a big silver liner in the big pandemic cloud.
This is also part of the reasons why business leaders in all industries should pay attention to what big airlines do and say, a concept I explain in more detail in my free ebook, Business class flight, that you can Download here.
Airlines are among the most heavily watched companies on the planet, with an army of analysts, journalists and stakeholders following every move. It’s like an endless parade of business school case studies, often covering the same issues you face in your business.
That brings us to Delta Air Lines’ earnings call this week, in which Delta announced its first quarterly profit since the pandemic, and Delta’s top executives explained a “structural” change they are seeing in their customer base.
Let’s go to transcription.
It all started with analyst Conor Cunningham of MKM Partners, who asked if Delta was concerned that business travelers (historically the most important travelers to airlines; those whose employers pay for things like corporate travel). premium business and first class travel) are not coming back, after pandemic.
As Cunningham said: “[H]How do you feel about the premium cabin as demand begins to normalize? Do you think the changes are now structural? Or is it really too early to tell[?]”
Here’s some of what Delta President Glen Hauenstein had to say:
“We think they’re structural. And we think – through the pandemic, we’ve created a kind of new class of customer, which is the high-end consumer who wants those products that maybe didn’t have that much. of access to them because they were given to the professional client earlier in the reservation process. ”
And here’s what Delta CEO Ed Bastian added immediately after:
“Consumers see travel differently, and they see a lot differently in a post-pandemic world. And the quality of their supplier, the care that their supplier gives them, it doesn’t matter whether you are an airline, a hotel or a hotel. a restaurant, whatever you are, will continue to generate preferences and influence at a higher level than ever before. ”
If we can cut through the specific corporate and airline references, here’s what that means:
- Yes, business travel is on the decline and likely will stay that way for a while.
- But, there is also an increase in a new type of customer: an individual consumer who is now willing to pay for a premium service, even if they don’t have an employer footing the bill.
That alone could be intriguing for almost any business. But I have a theory that goes beyond what Delta revealed on the call.
If your business can take advantage of it – again, almost whatever industry you are in – the possibilities will be very attractive.
This is all because during the Great Resignation millions of Americans left traditional jobs, but many of them did not look for other jobs.
Instead, millions of these people have left to start their own businesses, or to try to turn the hustle and bustle into productive full-time endeavors.
For example, last month Digital.com said he conducted a survey suggesting that 32% of Americans who quit their jobs this year did so to start their own business.
So, yes, Delta may well be right in terms of the theory that a “high-end consumer[s]”are driving demand for premium products such as business class travel.
But, I think it’s also likely that there are now a lot of new small businesses and new self-employed people, who are traveling on business.
They may not have employers who will pay for improved service, but they can still get tax deductions on legitimate business travel. There is also the qualitative advantage that a higher level of air service can allow you to be more ready to go into business when you land.
This idea came to my mind when I heard what Hauenstein and Bastian said. Because I have realized that I am one of the new types of passengers they are talking about.
After practically flying during the pandemic, I now have four major trips planned over the next few months. Without seeing myself as part of a trend, I did something that I never think I’ve done before when I was footing the bill for my own trip:
- On the shorter flights, both for business and personal travel, I found myself looking for premium economy class tickets.
- On the red-eyed transcontinental and transatlantic flights – which for me is 100% business travel related – I found myself paying for reclining seats in business class, so I could be pretty sure I ” have at least a partial night’s sleep on the plane.
Now, for Delta and other airlines, this trend could prove to be a little more complicated.
On the one hand, it is an open question whether “classic” business travel will return in similar numbers in the short to medium term, and also whether this “new class of customer” will fully compensate for the loss.
But if you run a business in almost any industry, I wonder if you will notice a slight increase in these new types of customers, and if so, if there are ways to remove or add services that might match. this new premium. model.
Some ideas from someone who is clearly an outsider and doesn’t know much about your business:
- If you run a restaurant, would it be a good idea to offer guaranteed reservations during busy times, or even preferred tables, for a small extra charge?
- If you offer consulting services, could there be a chance to offer a premium service at a higher rate or provision, in order to reserve your time well in advance?
- Frankly, whatever type of product or service you’re selling, is it worth considering a hub to offer something a little more upscale, but at higher prices, assuming that could these more price-tolerant customers now exist?
I suspect there are plenty of ways that there are plenty of ways to make big bucks if this trend really takes hold, I suspect, as Delta suggests. Maybe your business should be one of them.
If you give it a try and it works for you, just remember where you got the idea from first.