Beyond First Class: Airlines Segment Top CEOs
Beyond First Class: Airlines Segment Top CEOs
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By Jay Campbell
US Airways is studying the possibility of joining competitors American, Continental, Delta and United in offering a formalized program to better recognize and serve the top executives at its largest corporate accounts.
Although ad-hoc arrangements for meet and greet service, secretarial support and travel planning have been available in the past for celebrities and politicians, as well as corporate execs, US Airways now is taking a closer look at a more unified service in large cities as it grows internationally.
The reconsideration also stems from a revamping of US Airways' sales structure under vice president of sales Steven Tracas (BTN, Aug. 3, 1998).
No timeline for the program is set yet, and a source said it may not necessarily be made available only to corporate accounts.
Although new to US Airways, the concept of recognizing and rewarding top customers with creature comforts is one of long standing in the airline industry, which has a legacy dating back to the early days of American Airlines' AAdmiral's Club and Delta Air Lines' Flying Colonel program. Both those programs originally were set up strictly as perks for VIPs, at no charge, said consultant Rolfe Shellenberger of Runzheimer International in Palm Desert, Calif., who helped design the AA program. As air travel evolved into more of an everyman's product, frequency programs too have become more democratic, and now anybody with a checkbook can enjoy a premier level of airline service.
But some carriers have developed a whole new level of services they are now offering to top corporate accounts. American, Continental, Delta and United have programs for a very limited number of senior executives at their largest corporate accounts.
The newest of the programs is Delta Air Lines' Executive Partner, introduced last year. The carrier in December 1997 sent enrollment forms to its top corporate accounts asking travel managers to "nominate" a handful of executives who, if chosen, would receive automatic Platinum status in the Delta SkyMiles program, as well as Crowne Room airport lounge memberships. According to one travel manager whose company is involved, the Delta program in 1998 was not negotiated as part of his corporate contract, but rather as "an after-the-fact type of thing."
Delta's program goes a step beyond the usual offerings of instant elite status for top frequent flyers that airlines often grant new corporate customers. Even that practice "is a really good value and helps us market the new carrier," said Cheryl Hutchinson, corporate travel manager for American Management Systems in Fairfax, Va.
At Continental Airlines, the five-year- old, invitation-only Chairman's Circle program is even more exclusive in that most members are chairmen and chief executives. There are now about 300 members, concentrated around Continental's hubs, most of whom work at companies that have corporate agreements with the airline.
In Chairman's Circle, Continental offers all the benefits of Platinum Elite status in the OnePass frequent flyer program, as well as a dedicated reservationist, meet and greet services and an "always in touch" policy where the airline will get the member a message anywhere, even on the plane.
"They treat it like super gold elite," said Alex Houston, the former manager of corporate travel and administration at Cooper Industries in Houston, Tex. "It's a lifetime thing--our retired chairman was using it. I guess they figure he's still pretty well-connected and important. But it's only for companies that are big enough."
American Airlines' meet and greet services for celebrities several years ago made a shift from the high-profile to the high-powered by beginning to recognize important business travelers. More recently, AA has begun offering such services to its top national accounts. AA's offerings include an Executive Privilege desk to handle VIPs.
At least part of the impetus for AA's development of the program was that United Airlines had started something of its own in Chicago. Available on a regional level in all its hubs, United's Special Services typically enrolls a handful of executives from a given large corporate account.
Special Services offers departure assistance, which one buyer called, "really good and probably a huge expense." For example, United will reaccommodate a member even on another airline if it has cancelled a flight. Further, Special Services employees are provided with photographs of members, so they can seek out travelers in the airport to inform them of any schedule changes. Secretarial services at hub airports also are available.
An additional part of the service involves a dedicated line at a given hub that travel managers can use to report any complaints or make a request. "I get someone on the line nine times out of ten," said one buyer, preferring not to be identified. "At one airport, they have six people and we know each other so well."
In the case of one company using United's service, the perks were "not part of the contract, and there was nothing in the negotiations," the corporate buyer said. "In fact, I had forgotten to ask about Dulles, and Special Services people there called me to put two of our people on."
But a different travel manager criticized the United program, noting it "has some holes in it" because it's good only at the traveler's home airport. "You're talking about people who expect royal treatment everywhere," he said.
As nice as they sound, however, these programs may have drawbacks for corporate travel managers. "It's a great value if you can get the right people in it," said Hutchinson. "But if you have to put someone in simply because they're high up, and they don't travel a lot, I don't know how valuable it is."
And in some cases, Hutchinson noted, the perks may come in place of something that is actually more valuable to the company's bottom line. "You have to keep it in perspective," she said. "Okay, so you're doing something really nice for five or 10 or fewer people, but is that worth the X amount of discount that you're not getting?"
Another factor to be considered is the common corporate policy of "leading by example," where top executives show their support of travel policy by following the rules themselves. Technically, however, perks programs may not violate policy since they are offered at no charge.
Still another issue is whether the program would be used enough to make it worthwhile for the company to be involved at all. "For us, there are certain times when there is a need for a resource like this, but to take the whole package is too much," said Nancy Bruner, manager of worldwide travel services at Cargill in Minneapolis. "Also, some of the services they provide are a bit outdated--like secretarial service, for example, with all the new ways we have of communicating with the home office."
In the case of a company like Cargill, an ad hoc program may be preferable to a formal package. That's what's offered by the majority of the world's major airlines, including Cargill's hometown carrier, Northwest. "If the customer wants it, we'll do a meet and greet on an as-needed basis," said Northwest director of travel industry affairs Marcia Butler. "Sometimes they want to be separate but ignored."
Northwest also handles services for its alliance partner, KLM. Along similar lines, Cathay Pacific spokesman Gus Whitcomb said Cathay "anticipates a change as part of the Oneworld alliance with American and British Airways. There's a working group now looking at 'seamless service' and we have promised to offer the same services."
Foreign carriers such as Air France and Lufthansa also have informal programs. As part of the Club 2000 portion of its frequent flyer program, Air France offers automatic wait-list confirmation and meet and greet service. Lufthansa has a staff of meeters and greeters at its Frankfurt hub.
Houston said all airlines provide a "spin list" to allow airport personnel to identify VIPs and celebrities. TWA salespeople, for example, brief airport agents on top accounts, said staff vice president of national sales Gary Ravan.
TWA also very often is involved in what could be the highest-profile VIP service of them all--dedicating an aircraft to fly the Pope to Italy. "Now that's truly ad hoc," joked Ravan.