Delta’s Q2 2025 earnings release has plenty of juicy tidbits, including potential plans for elite upgrades. But is there something more to the announcement?

Delta’s Q2 2025 earnings release

During Delta’s most recent earnings release, the company talked glowingly about the future of the business and how financial results stabilized.

The leadership team was able to explain away the potential downsides by calling out offsets, like a weaker dollar compensating for weaker international demand. They also responded to unattractive news regarding overcrowding of lounges by saying there is a plan in place to eliminate most crowds within 2 years. (I imagine part of this for Delta One lounges will be the unbundling of lounge access from ‘basic business’ fares.)

News of Delta’s earnings release caused the stock to jump over 10% on the day. Investors seemingly bought the story from Delta that optimism will continue into the near future. They even talked about a new AI pricing algorithm. But then they dropped some news on elite upgrades.

Delta cares about elite upgrades?

It seems like airlines lately care more about earning a few extra bucks instead of passing along the upgrade to an elite member. It’s not just Delta that behaves this way; I’ve seen cheap upgrades on AA and reports of similar on United. So imagine our surprise when Delta proactively brought this up on their earnings call. Per Glen William Hauenstein, President of Delta Air Lines, Inc:

I think there is nothing in any of the forward bookings that would have us indicate that there is a diminishing demand for premium cabins or services. And so, as we continue to look … and put more and more premium, we are able to do two things. One is sell more of it, and two is accommodate more of our heaviest frequent flyers with upgrades, which is something we want to continue to do to provide additional value to them.

Hold on. They want to allow their “heaviest frequent flyers” get upgraded? They do, but only because the data says they need to pay attention. So let’s try to unpack the rationale.

Premium demand is strong

One of the things that has been made more apparent these days is a strong demand for premium travel. We’re seeing that change around the industry.

• Frontier, an ultra low cost carrier, is adding first class seats (and allowing elite upgrades).
• Southwest, a low cost carrier, is adding extra legroom seats (among many other changes).
• United is introducing new Polaris seats and upgraded catering (including caviar).
• American Airlines is also introducing a new business class seat of their own.

This isn’t an exhaustive list. But it sure seems telling that much of the industry is adding premium services at the same time. And it seems to apply even for the carriers that once fought extensively over just having the cheapest price. But now, there’s a new fight breaking out for premium customers.

So with this as a backdrop, it shouldn’t be surprising that Delta wants to continue adding more premium seats to planes.

Why care about elite members?

You might think that Delta doesn’t care about its SkyMiles program. That’s only partially true–they don’t care about the value created by redemptions because that’s not the main reason people fly Delta. Their research says that people fly them because they are viewed as a premium airline, and so there is no need to compete for great value towards awards.

But elite members? Delta does care about them. If they didn’t, those big negative changes to the elite program they tried to push in 2023 wouldn’t have been favorably revised. Delta likes its elite members because it means more engagement with the airline and more money from American Express, their cobranded card issuer. Take it from Ed Bastian, CEO of Delta:

Our core consumer is in good shape and continues to prioritize travel. And affinity for Delta’s brand has never been stronger. This is evidenced by the sustained strength of our premium products and our industry leading co-brand card with consumer spend growth on the Delta American Express card up double digits in the first half of the year.

And Glen William Hauenstein adds on more:

Remuneration from American Express was $2 billion, up 10% over the prior year on double-digit spend growth, and momentum in new card acquisitions. We’ve remained on track for full-year remuneration of approximately $8 billion, providing durability to both earnings and cash flow. We benefit from a highly engaged, high-spending card member base, customers who are deeply loyal to Delta and possess strong credit profiles.

They’re connecting the lines pretty well for us. The more deeply loyal the customer, the more likely they’re the heaviest frequent flyers. And those members are the ones driving the massive card growth. Got it?

But remember that Delta is introducing a ‘basic business’ class

Before you start thinking that all will be good news with Delta bringing back your business class upgrade, you should remember that Delta has plans to introduce ‘basic business’. Here’s CNBC reporter Leslie Josephs:

Just curious on the segmentation at the front of the plane. Is that something that you plan to roll out in 2025 or 2026? And would it look something more like a basic business where you – the customer doesn’t have a seat assignment or something like that? Or do you plan to have kind of a fancier or more desirable seat within Delta One or one of the other first-class cabins?

And in response, Glen William Hauenstein makes the following comment:

I think we’re going to reserve comments on that until we roll it out.

They’re going to roll it out and it seems almost inevitable. But when they do, don’t you think they will give elite members a reduced benefit? Perhaps that means upgraded members on the domestic Delta One product don’t get access to Delta One lounges? Or maybe upgraded members don’t get the ability to reserve meals, select seats, or get extra baggage?

So don’t get too optimistic when Delta says they will give you more upgrade chances because the product you’ll get upgraded to might not be what you’re used to today.

Do you think Delta will offer more upgrade chances in the future?

Suggested reading:

• Delta Extra Travel Experiences: Just a Gimmick?
• Delta’s Uber Partnership and What You Should Do Instead
• Why I Always Check a Bag with Delta