Travel Agent - December 8, 2008 - (Page 70)

TR ANSPORTATION Three Cheers for the New Delta The Delta/Northwest merger can reshape the aviation industry BY GEORGE DOOLEY NOW THAT Delta Air Lines (www. delta.com) has acquired ownership of Northwest Airlines (www.nwa.com) and plans to fully integrate Northwest into the Delta family—a $2.8 billion merger that has made history and sparked intense, ongoing controversy— the new Delta will have revenues of $35 billion and be a major player in both international and domestic markets. The Northwest brand will gradually be phased out and Delta’s name and brand will replace it. During the 12- to 24-month integration period, Delta and Northwest will continue to operate their own branded aircraft until the process is complete. Delta says it’s working hard to ensure that the merger is smooth and seamless, and delivers benefits to the leisure and business traveler. For the time being, the airlines’ websites will continue to operate separately, as will the two airlines’ reservations systems and frequent-flyer programs. Tickets can continue to be purchased online at both websites. Passengers will not see immediate changes in their itinerary or reservations as a result of the merger, Delta says. Both airlines’ frequent-flyer programs are safe, and the SkyMiles and WorldPerks programs will be consolidated into one bestin-class loyalty program by the end of 2009. During the transition period, SkyMiles and WorldPerks will remain separate and active programs, Delta says. The merger establishes Delta as the world’s largest airline. Its hub system is very strong, for example, and from its Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita hubs, Delta has woven a global network. Combined, Delta, NWA and Delta Connection will offer service to more than 376 destinations in 66 countries and serve more than 170 million passengers each year. In addition, Delta’s marketing alliances with SkyTeam 70 | TravelAgent December 8, 2008 domestic U.S hubs beginning January 2009 that improves customers’ access to destinations worldwide. Service to 12 destinations not flown by any other U.S. carrier is planned, Delta notes. While Delta wants smart growth, achieving it will be difficult. Relations With Agents and other partners give Delta and its 75,000 worldwide employees the power to reshape the aviation industry. But beyond the basics, the new Delta faces formidable challenges. Delta’s management, unions, employees and shareholders have major challenges to face—all in the context of a seriously weakened airline industry. While increased fuel costs pose a major problem for Delta and the airline industry, there are other issues to consider, including intense competition and escalating costs that will resist the best efforts of the best managers. The reality is that Delta and other U.S. carriers face tough times. The Air Transport Association (ATA) notes that since the end of 2007, there have been eight airline shutdowns and one bankruptcy. This includes MAXjet in December, Big Sky in January, Aloha in March, ATA, Skybus and Epos in April, Champion in May and Air Midwest in June. Frontier filed for Chapter 11 in April, ATA reports. And 2009 could be worse. To date, Delta has done a lot that seems right on target—despite sharp criticism of the merger. This includes improved kiosk technology (26 million passengers will use kiosks this year), upgrades to its website and eliminating its $3 curbside check-in fee. New baggage fees of $15 to $25 took effect December 5. Most importantly, Delta will offer 15 new routes to the world’s fastest-growing economies—Asia, Africa, Europe and the Middle East. This includes increased connectivity between For the nation’s travel agents, the new Delta is starting off with great assets, objectives and opportunities. And despite all the uncertainties—and the lingering memory of Delta imposing the first 1995 commission caps—agents can wish Delta well. No responsible agent has an interest in a weak, underfinanced and poorly managed airline damaged by conflict between management and labor and crippling competition. Yet noticeably absent is a serious outreach to travel agents. Delta’s policies are not always agent-friendly. (Witness ASTA’s recent warning to its members on Delta’s GDS bookings via ARC’s Payment Express.) Handling of debit memos is time consuming and awkward. Another frustration is Delta’s charge of $3.50 for inactive and passive segments and $50 for duplicative or churned segments. Delta’s ticketing policies at its Agency Service Center are marvels of complexity. True, the financial markets are in turmoil, profitability will be hard to achieve and consumer demand is uncertain. The impact of reported capacity cuts is unknown and the competitive reaction of other major airlines to Delta’s merger is unpredictable. But one modest proposal is for Delta to take a fresh look at its relations with travel agents, who just might prove to be a profitable ally in tough times. I CONNECTING YOU To learn more about changes in aviation, visit www.travelagentcentral.com/air-travel http://www.delta.com http://www.delta.com http://www.nwa.com http://www.travelagentcentral.com/air-travel

Table of Contents Feed for the Digital Edition of Travel Agent - December 8, 2008

Travel Agent - December 8, 2008 Reality Check On the Web Contents Contributors From the Editor Europe: Scotland Begins a Yearlong Heritage Celebration Pacific/Asia: Singapore’s Hotel Scene is Vibrant, Inventive and Luxe Egypt: Building Tourism was the Key Topic at the ATS Fall Conference in Cairo Hawaii: Oahu’s North Shore has a Gentle, Laid-Back Ambiance Special Insert: US Airways Vacations—Universal Orlando Master Specialist Canada: The Hotel Le St-James Offers a Taste of Elegance Las Vegas: Sin City May Not See Deals this Good for a Long Time Florida: The Eden Roc Hotel Re-Emerges after a Major Overhaul Central & South America: Chile is an Emerging Hot Spot Caribbean, The Bahamas & Bermuda: Barbados Hotel Undergoes Major Renovation A Jamaica Tourism Official Shares the Island’s Plans Two Little-Known Caribbean Properties are Worth a Look Cruises: 10 Reasons to Love the Ruby Princess Cover Story: Religious Tourism - Faith-Based Vacations are a Growing Niche, and Are Taking Off in Surprising Ways Delta Takes Off: The Delta/Northwest Merger canReshape the Aviation Industry Tours: Traveling in Style with NWA WorldVacations Agent Profile: This Full-Service Agency Turns personalized Service into an Art New Web Trends: Services Aim to Increase Agent Sales Agenda: Fam Trips, Deals & Incentives, Calendar Celebrity Solstice Hosts Forum for Economic Discussion Cap Juluca to Reopen in Anguilla Hawaii Seeks New Tourism Angles IWV: Scam or Opportunity? In the Spotlight Agent Access Classified Marketplace Editorial Index Advertising Index Special Supplement: South Africa: Your Journey Begins Here

Travel Agent - December 8, 2008

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