Delta Axes Mtgs. Fares: Carrier Eliminates Group And Zone Discounts As Part Of Fare Reform
Delta Air Lines on Jan. 5 eliminated its group and meeting sales products along with its announcement of a new fare simplification strategy, but industry consultants expect the carrier to come back soon with an offer to address group corporate travel.
As a result of the new fare strategy, Delta announced it no longer would offer the Delta Meeting Network product and that the 5 percent, 10 percent and zone fare discounts had been eliminated. Tickets under active contracts are allowed to be purchased through Feb. 28, according to the company Web site.
The move to discontinue the meetings program came as a surprise to some consultants. Terry Egger, regional director of Des Moines, Iowa-based Air Fulfillment Services, a third-party firm that manages group and meeting air travel for meetings management and incentive companies, said at press time that he expected some type of group sales program to be put back in place at Delta. "It sounds like they're going to have something for meetings, we just haven't heard what that will be," Egger said.
"I'm sure there is going to be something," Egger said, "they can't just totally eliminate a whole market segment. Or, maybe they can. Delta's not known to do anything too rapidly without thinking it through, so maybe they've run some numbers that make sense for them and aren't going to make sense to the rest of us."
Delta spokesman Andy McDill declined to confirm a restructured group and meeting product is in the works, but left the option of group sales open. "In regards to meetings and groups, right now we are taking those on a case-by-case basis," he said.
"On meetings, now that we don't require a Saturday night stay, retail fares are more accessible to convention goers, instead of us having to offer a special program," added Harlan Bennett, vice president of revenue management.
Delta's elimination of Saturday night stay requirements is part of its fare simplification strategy, but Egger said the impact of that move on the group sales side will be minimal.
"To be perfectly honest, the Saturday night stay thing wasn't a real huge event in a lot of markets. Saturday night stay has been gone everywhere that America West flies for a long time," he said. "It was only a big deal in some of the major business markets."
American Airlines, which broadly matched Delta's pricing strategy on Jan. 6, has made no moves toward changing their meetings products and continues to accept new group sales contracts. "Currently, it's business as usual for AA group and meeting travel," said AA spokesperson Tim Wagner, declining further elaboration.
"I've not heard from any other airlines on the group and meeting side, because, in essence, the fares didn't change the group and meetings stuff. We're kind of all anxiously waiting," Egger said.
Other carriers are taking a wait-and-see approach as well. "We're reviewing Delta's actions," said a spokesperson for Continental Airlines.
Egger expected any new meetings product by Delta would not have much wiggle room for discounts. "In a lot of cases, the zone fares are going to be equal to what these new business walk-up fares are, so I'm hoping that they address the zone fares a little bit and maybe that will be all they offer," he said.
Egger said he hasn't seen much concern among his customers so far about the elimination of Delta's meetings program. He said many customers simply saw that Delta was lowering fares, although the move will not greatly affect lower-end fares.
Dana Catchpole, Bank of America's vice president supplier manager for meeting and event management, said his initial reaction to Delta's fare simplification was positive, simply for the fact that it would make it easier to coordinate group air purchasing for conferences.
"The question has always been how do we load in zone fares and block seating into an online group booking tool, so the more we do away with that the easier it's going to be," Catchpole said.
So far, the effect of Delta's fare simplification strategy on group and meetings sales has yet to come to light, Catchpole said. "As long as the fares go down, we'll support it. If they want to penalize groups for trying to book large blocks of seats, or things of that nature, then we do need to take another hard look at it."