<B>Delta Tests E-Solution</B>
<I>Makes Good On Promise To Give Web Access To Negotiated Rates</I>
By David Jonas
Delta Air Lines and a few of its largest accounts this month initiated testing of a reservations system that enables business travelers to access and book negotiated corporate rates on the carrier's newly designed consumer Web site.
The tests arrive six months after Delta promised an online booking solution for corporate buyers, following a deluge of requests for such functionality.
Though Delta is not the first to offer corporate Internet bookings--Alaska Airlines introduced an intranet system last year--and will be followed in the coming months by Northwest Airlines and others, it has gone the furthest so far in giving corporate clients a viable solution to Web fare dilemmas via its main cyber-portal.
Two Delta clients began testing the system earlier this month, with a third expected to join the trial in a week or two. The carrier hopes positive system performance and feedback will accelerate its initial timetable, which calls for several more national accounts to begin using the system in the second quarter and availability to all corporate accounts by the fall.
Though Delta would not identify the involved corporations, it acknowledged that one is a heavy Delta Shuttle user that will offer the functionality to 650 frequent travelers.
Vince Caminiti, senior vice president of sales and distribution, said once the bugs are removed the system will be a "no-brainer" for clients that frequently use Delta in a particular travel lane. "This becomes a vehicle for them to facilitate those transactions and get financial relief," he said.
As Caminiti pledged last summer (<I>BTN</I>, Aug. 2, 1999), the system not only enables bookings with corporate rates, but also offers special Web fares, which will count toward both revenue and market share goals. "It is a further development of our E-Delta proposition we announced a year ago (<I>BTN</I>, May 17, 1999), which now is organized in such a way as to optimize this e-world we are living in," he said.
The Web booking system at www.delta-air.com walks travelers through the reservations process in a familiar step-by-step format. After inputting a SkyMiles account number--submitted beforehand by the travel manager--and choosing 'Corporate' or 'Personal' travel, the traveler selects an origin, destination and time range. The system finds the most suitable itineraries listed with regular fares. The traveler then chooses the most desirable and the system displays that itinerary listed with both the negotiated corporate fare (not for personal travel) and the lowest non-corporate fare available at that time. After requesting to book that itinerary, the traveler then is shown the cost savings off the regularly published fare. The system is programmed to recognize all inventories that are subject to certain negotiated discounts.
For the travel manager, the system not only offers a viable self-service model and a partial solution to the thorny issue of Web fares, but enables online tracking of both share and revenue. "Like all booking tools, there is a reporting capability-from entrance to purchase, which includes O&D, revenue from O&D and any savings," explained Steve Scheper, Delta's general manager of agency and corporate program development. "It tracks all that into a database that travel managers can access to see who actually purchased what and when." The information compiled in that database is downloadable into a spreadsheet.
Citing the call for data management and the added benefit of tracking "rogue employees," Caminiti said Delta is supporting "the main goal for corporate travel managers: control."
However, critics argue that as airlines increasingly encourage bookings on their Web sites, corporate buyers will lose sight of, and access to, lower fares in the market. "The airlines are leaping over the dying bodies of travel agencies, trying to outdo one another in the bypass game when in fact the agency plays a vital role in protecting the consumer," said Rolfe Shellenberger, senior consultant at Runzheimer International. "The traveler never sees the AirTran rate, for example, which in most cases is more favorable than the contracted Delta rate."
Indeed, some travel managers contacted by <I>BTN</I> said the prime concern of directing travelers to an airline's exclusive Web booking environment is the restricted view of fares available for a particular city pair, and not inclusive of negotiated rates with other carriers, sale fares or other particularly cheap alternatives.
From the traveler perspective, Shellenberger further noted that Internet bookings on a carrier Web site is "time consuming and dreary," because hotel and car rental reservations, for now, still must be completed as a separate process. Travel managers echoed that concern, advocating instead an all-in-one site built around a corporation's travel program.
"We have that development clearly in sight," Scheper countered. "It enhances the overall delivery and would make the product complete." He added that Delta either would provide links to a corporation's preferred hotel and car vendors within the booking process or actually embed those booking mechanisms into the Delta reservations system.
Though Delta is the largest U.S. airline to offer corporations a Web booking option, it did not win this race. Alaska Airlines has created a handful of customized links for corporate intranets that connect travelers directly to the internal reservations system.
However, Northwest will be the next major airline to make corporate rates directly available on its Web site when testing with six of its largest accounts kicks in on April 1. "We are mapping out the process from start to finish to see which areas can be done directly," said Al Lenza, vice president of distribution planning. "Each company will determine which parts can be handled without a third party."
The trial corporations will assign certain traveler groups or departments to test the system, which, like Delta's, will include passcode access to a special booking area on nwa.com that will have specific corporate rates loaded in. However, unlike Delta, Northwest will include preferred car and hotel bookings from the start.
"If a corporation has other preferred suppliers, they can load those discount programs into our system to serve as a one-stop shopping solution," said Steve Jett, Northwest's manager of e-commerce marketing, adding that those bookings would go through Worldspan.
Another difference from the Delta initiative is the lack of special Web fares available for corporate bookings. "We feel our Web specials are leisure driven and therefore will not be included in this program at this time," Jett said. Also, Northwest still is ironing out the data feed back to the corporations.
The Northwest beta test customers actually will use a separate URL until the carrier is ready to go live in a few months. Furthermore, Lenza noted that some testing will go beyond the booking process. "We are having discussions with some clients about which parts of procurement could be handled direct, including settlement and refunds and reissues via online functionality." Northwest has reported strong success in its consumer-oriented online refunds.
Meanwhile, the airlines' Internet-based E-Biz Perks program for small businesses has attracted more than 3,000 participating companies since its launch late last year. In fact, the carrier applied many lessons learned from that program in developing the corporate booking solution.
Meanwhile, Delta's local competitor in Atlanta, AirTran, actually beat its larger counterpart to the punch when it enabled corporations to book through its Web site. Though the carrier does not offer volume discounting, corporations can use an ID number to book flights at airtran.com and receive a bill at the end of the month. Interestingly, AirTran's set-up offers a method of circumventing credit card fees.
US Airways, meanwhile, is working on a Web site redesign. A spokesperson confirmed that "enhanced corporate capabilities" will be integrated in time.
For its part, American has decided to sit back and watch the concept materialize before jumping into any new systems. "The availability of Internet fares that are relevant for business travelers is minimal, and the Internet as a vehicle for corporate travel is still relatively small," said Craig Kreeger, AA's vice president and general sales manager. "Nonetheless, our best customers do need access to the best fares and eventually we will go through a process to make sure that is there one way or another. We still are on the sidelines looking at and trying to understand exactly what Delta is going to do."
Unlike many others (<I>BTN</I>, Jan. 24), Delta and Northwest both will maintain the current organizational structure of its e-commerce unit.
"We have learned a lot in a year what it means for a big company like Delta to cull out functional areas in order to be part of an e-commerce world," Caminiti said. To handle some of the technological advances needed to run the operation, the carrier has assembled a team of "e-enablers" from various disciplines within Delta, including experts in pricing, revenue management and sales. Caminiti said the result has been an optimization of e-commerce opportunities, "without tampering with core Delta."
From the Northwest perspective, the e-commerce unit has the most value to the airline by being directly integrated with it. "It's not just bookings," Jett pointed out. "E-commerce includes communication with agencies and corporations, self-service kiosks, handheld functionality, voice recognition and other areas."
While the corporate booking product currently is the sexiest development for buyers and travel managers, E-Delta has several other programs in various stages of readiness, ranging from a pay-as-you-fly system to new Internet applications for small businesses and meeting planners.
An online travel agency service center, expected next month, will enable agency access to booking procedures, reduced rate travel information, policy changes, service modifications and group and meeting travel information. Future enhancements will include account-specific information, a new booking engine and multilingualism.
Partnerships with third-party technology vendors are imminent, and will offer clients another avenue for cost savings, but none are involved in these initial tests on delta-air.com. "The booking engine now is for the consumer site only, which makes it unique in the corporate environment," Scheper said. However, once agreements are reached, tech vendors will facilitate connections from corporations into the Deltamatic reservations system.
"We also are testing pervasive computing with handheld devices, such as pagers, mobile phones and palm platforms," Scheper added. "Devices with enhanced functionality now are in the hands of friendly corporate customers testing wireless communication."
As Delta, Northwest and other carriers deepen their commitment to e-commerce, the role of the travel agency in the distribution equation has ubiquitously come into question. "The more people have access to information, the more they will want to control their own destiny," Caminiti said. "And as more corporations engage in direct connections, there is a whole series of opportunities for agencies to lower costs and gauge transaction fees with their corporate accounts." He added that while agencies still represent 70 percent to 80 percent of Delta's total revenues, those that "cannot quickly and astutely capture the benefits of increased productivity and stay in sync will get squeezed."
Meanwhile, E-Delta progress plays in directly with the airline's emphasis on customer relationship management. Since the emerging technology enables Delta to identify and interact with its best customers, CRM developments likely will include opportunities for those customers to get first crack at Web fares and distressed inventory offers. "Ultimately, the consumer Web site will offer travelers something like MyDelta.com, and we expect to do that for corporations as well."
In preparation for coming CRM developments, Delta late last year finished major technology upgrades in its 26 largest airport locations, and will complete similar improvements this year in another 56. The upgrades involve new gate and boarding systems and other "back-office plumbing" that form the foundation of the CRM push.
Overall, Delta in 1999 invested more than $700 million in technology.