The Atlanta-based airline last week introduced a site aimed at large businesses and is preparing to launch an innovative e-hub for small businesses, as well as a wireless booking system.
Delta’s Internet moves come amid a backdrop of feverish consolidation in the U.S. airline industry, one in which b-to-b initiatives are increasingly viewed as a necessity to compete. Moreover, Delta’s ventures could make it a more attractive merger partner.
Indeed, much is at stake for Delta. The company is hustling for a partner, and at press time there were reports circulating that it was in merger and alliance talks with Continental Airlines Inc. and Northwest Airlines Corp.
Meanwhile, the No. 1 carrier, UAL Corp., is planning to buy US Airways Group Inc. The No. 2 carrier, AMR Corp., has announced its intention to acquire Trans World Airlines Inc. And while these companies’ current b-to-b programs are generally less sophisticated than those proposed by Delta, their bigger IT budgets could change that almost overnight.
Delta’s big-business program is the most comprehensive launched by an airline to date. Delta.com for Corporations allows users to apply for discounts and take advantage of the company’s SkyMiles program online. It also has a significant marketing component, as users will be targeted with special Web promotional fares.
Corporations need to apply for and be accepted into the exclusive program. So far, eight companies have signed up 17,000 of their employees for the program.
McDill said requests from clients to do their travel arrangements online drove Delta’s executives to create the program. Their move also underscores the trend among companies to let their employees do tasks that in years past were handled by in-house travel managers. "Corporations are telling us it would be nice for their travelers to do this individually, and that they’d like to access our Web fares easily," he said. As an added marketing bonus, users will receive bonus SkyMiles online, McDill said.
Delta’s small-business hub, called Delta Mind Your Own Business Travel, will go live next month. The site, which will have its own URL, will allow executives at companies with between five and 50 people to make everything from flight to hotel reservations online. It is intended to be a marketing calling card to court small businesses, said Andy McDill, spokesman for Delta’s e-business programs. "This is targeting a group that has been underserved," he said.
Most airlines’ Internet programs are either generic or aimed at big businesses, which have fatter travel budgets and are more apt to upgrade their executives to lucrative first- and business-class seats. This is likely to change, as layoffs by big corporations will likely lead to the creation of many small businesses—a trend seen in the early 1990s.
Delta’s first-mover advantage in serving the small-business market could be a real asset, said Chris Peters, CEO of Pittsburgh-based b-to-b hub consultancy eMarket Concepts. "It’s a very smart move," Peters said.
Delta’s as-yet-unnamed wireless project is slated for rollout within the next six months. The airline will provide business flyers with a LAN card that will allow them to connect to Delta’s online reservation systems remotely via their PCs. It will then be adapted to personal digital assistants, though no timeframe has been set.
"The advantage is that you’re not going to have to go crawling around looking for a telephone hookup," McDill said. Other details about the system are not yet available.
On this initiative, Delta is not in the vanguard. United Air Lines Inc., for which UAL is the holding company, already has a sophisticated wireless program. It allows corporate and consumer users to do everything from flight paging to booking, all without a LAN card.
Nearly all of the marketing for Delta.com for Corporations is being done one-on-one by Delta’s sales force, McDill said. This befits Delta’s big clients, most of which are Fortune 1000 corporations used to working with a salesperson assigned to closely manage their account.
Marketing for the Delta Mind Your Own Business program, meanwhile, will consist of traditional advertising and direct marketing. Delta will begin running ads in April, McDill said. The media have not been selected. The airline will soon begin placing ads on the back of Delta boarding passes as well.
No marketing plans have been set for the wireless program.
Delta’s b-to-b programs underscore the company’s commitment to the Web. In 1999, it became one of the first airlines to offer discounted fares on tickets bought online. And it recently became one of the first to start a stand-alone Internet unit. Whether Delta’s enthusiasm for b-to-b will be enough to make a possible merger fly remains to be seen.