Will Unbundled Amenities be the Future for Budget Hotels? Sponsored This content is created collaboratively with one of our sponsors.
With merger challenges in the past and threats from Southwest at its biggest hub, Delta needed to step up to the plate to improve its terrible numbers and it did.
Just a few years ago, Delta Air Lines languished near the bottom of on-time performance rankings.
But after undertaking a far-reaching effort to reduce delays, cancellations and lost bags, Delta has improved its operations, boosting its performance while rivals such as American and United have been preoccupied by bankruptcy or mergers.
In 2012 through November, Delta ranked fourth among 15 U.S. airlines for on-time performance, behind Hawaiian, Alaska and AirTran. That means it was first among big network carriers.
It also has reduced mishandled baggage, consumer complaints and cancellation rates. End-of-year statistics are due in coming weeks.
With more to brag about, Delta CEO Richard Anderson has been touting the importance of on-time performance and service not only in attracting customers but also in holding down costs.
How much such yardsticks matter to fliers depends on the customer, airline industry experts say. Many simply search for the best fares and schedules and assume service is about the same at all carriers.
An airline’s most valuable customers — business travelers who fly often and and usually pay higher fares for shorter-notice, more flexible itineraries — are more particular about service.
“If you’ve got bad operational performance, your top-dollar customers are going to steer away from you,” said Brad Beakley, head of consulting for Sabre Airline Solutions, which sells technology to help airlines manage operations. “It only takes one or two misconnected flights, one or two lost bags, or one or two dissatisfied customer situations, that customer is going to look for an alternative.”
To frequent flier Jeff Taylor of Johns Creek, on-time performance may depend less on the airline than on things such as weather, time of day or other factors that slow operations.
“I’ve had quite a few delays on Delta over the years, but for the most part they do a pretty good job,” said Taylor, who travels two to three times a month. He said he hasn’t noticed any significant improvement in Delta’s on-time rate over the past couple of years.
In 2010, Delta ranked 15th out of 18 U.S. carriers ranked by on-time performance — the worst among the big network airlines. Back then, Delta downplayed the consequences, instead boasting of its international route network, amenities for first class travelers and competitive fares.
But while Atlanta travelers have limited options to flying Delta, low rankings hurt in the competition for fliers elsewhere. And Delta management decided to make cutting costly delays and other glitches part of the financial strategy as well.
In the past couple of years, Delta has added maintenance stations to reduce flight cancellations, added computers in jetways to gate check bags with scannable tags and speed passenger boarding, and fine-tuned the dozens of steps taken in the countdown before the departure of each flight by flight attendants, pilots, ground workers and gate agents. For instance, it set a target of closing airplane cargo doors three minutes before departure time.
The overall goal: Get the plane away from the gate on time, boosting the chances of an on-time arrival at the destination.
Addison Schonland, partner at AirInsight.com, said Southwest Airlines’ entry into Atlanta last year may have prompted Delta to sharpen its focus on service. Southwest ranked 7th in on-time performance for the first 11 months of 2012 and has long had a reputation for good service despite a relatively bare-bones approach.
“If you compete with somebody who’s really good at what they do, you’re going to have to up your game,” Schonland said.
Delta doles out “Shared Rewards” incentive payments to employees when the airline meets goals for on-time performance and other factors each month, and Anderson has been outlining to employees operational statistics and their influence on financial results.
“We’re really doing a great job of running the airline, which means we have higher passenger revenues,” Anderson told employees. Last week, Anderson said the airline’s past two years of high unit revenue compared with other airlines are “the coalescence of a great operation, great customer service by our employees, a phenomenal job by our sales and distribution organization and a great job by our network planning.”
Fixing delays can bring frequent business travelers back pretty quickly, Beakley said. But it’s more difficult to fix long-held negative perceptions among those who fly less often. “A leisure traveler that travelers once every couple of years — they’re going to remember for a long time that last experience,” he said.
Schonland said bad news also spreads more quickly than good testimonials.
“How many times have you heard people say, ‘I will never fly Airline X because…?” he said. “If you’re unhappy, you’ll tend to tell ten people, and if you’re happy, you’ll tell three.”
With many airlines, “the price is the same, the safety is the same, the planes are the same, so what is the differentiator?” Schonland said. “The only way you differentiate is on service — not on price, because price can be matched.”
No airline can avoid delays entirely. Delta, for example, has improved its overall on-time performance, but was hit by storms and bad weather that led to delays in December. The broader picture for the year may be lost on travelers whose flights were delayed or canceled over the holidays.
Behind the scenes, poor on-time performance costs money.
“Running a bad operation is very, very expensive,” Beakley said. Delays and cancelltions may require rebooking passengers on other flights and other airlines, and can also prompt a need for costly fixes. An airline with delays cascading through its flight schedule may end up operating fewer flights in the day to allow more room for error — losing big opportunities for revenue.
Because a flight delay can keep pilots and flight attendants from getting required rest before their next flight, chronic delays can complicate crew management and boost labor costs. Frequent delays on a single international route with seven to 10 crewmembers could cost an extra $1 million annually, Beakley estimates.
Running flights on time, on the other hand, can reduce lost bags and complaints, as well as reduce overtime and hassles for employees, Anderson told workers in one weekly message.
“When we run our schedule reliably and we do not cancel flights, our pilots do not get rescheduled… our staff at the airport don’t have to work overtime… our reservations staff don’t have to deal with people calling on the phone figuring out what they have to do next,” and ground workers don’t have to deal with rerouted flights, Anderson said.
“It just makes all of our lives so much easier, and boy, our passengers love it.”
(c)2013 The Atlanta Journal-Constitution (Atlanta, Ga.). Distributed by MCT Information Services.