Orlando – Delta
Air Lines is beginning an aggressive push to highlight operational performance
to corporate customers. Among its efforts is a promise to compensate its
customers financially should its operational performance fall below that of its
top competitors.
Delta has introduced the Operational Performance Commitment,
which is available to all customers with corporate sales agreements, Delta vice
president of global sales Bob Somers said. The agreement, a separate document
from corporate sales agreements, offers compensation to accounts if Delta’s
controllable on-time and cancellation performance, on an annual basis, as
measured by the U.S. Department of Transportation, falls below both United
Airlines’ and American Airlines’ performances.
Eligible customers must have met at least 95 percent of
their contracted commitment to Delta, Somers said. Compensation will be based
on the customer’s performance against its contract, its travel volume and the
extent to which cancellations affected its travel program. Payment would be
made to a UATP account.
A worst-case scenario model of a disastrous operational
performance showed that compensation levels ranged from a few thousand dollars
for smaller customers to hundreds of thousands for the largest, Delta director
of corporate sales development Jon Young said.
Judging by operational history over the past few years,
Delta is making a safe bet. Last year, for example, Delta reported 95 days with
a 100 percent completion factor, compared with 10 days by United and American
collectively, Somers said. “I don’t expect we’ll ever write a check or put
money in a UATP account, but that’s not the point,” he said. “[Customers] are
telling us we are not taking enough credit … and giving enough validity to
operational performance as it relates to traveler purchase behavior.”
To that point, in May Delta began providing operational
performance reports to its customers, showing its delays and cancellations
against competitors within the customers' corporate programs. The reports
quantify the hours saved by comparison. The service also includes a tool in
which the customer can use data from travel management companies or expense
tools to calculate additional costs of delays and cancellations, such as
additional hotel room nights, meals, TMC transaction charges and estimated lost
productivity. The reports are designed to enable Delta customers to push
compliance to Delta within the program.
“This helps the travel manager explain the story to their
management and tells the traveler we care about them and their lives,” Young
said.
Delta is training its sales team on the Operational
Performance Commitment and plans to communicate with customers on it in August,
Somers said.
CORRECTION, July 27, 2015: This report has been updated to reflect that Delta offers compensation if its performance falls below those of both United and American, not below one of the two.