Delta Air Lines claimed a record-setting seventh year atop
BTN's annual airline survey of corporate travel managers and agents, once again
steamrolling its competition and earning the top score in every category by a
healthy margin. Across the 20 years that BTN has conducted its survey, Delta
now stands alone as the winningest carrier. Both American Airlines and pre-United-merger
Continental Airlines had six wins over the years.
Scores in last year's survey rose nearly across the board,
but they were a bit more mixed this year. Overall rankings of the four largest
U.S. carriers remained the same as in 2016.
Delta improved its score in every category, boosting the
premium over its nearest competitor for total score to 0.85 points, on a
five-point scale, compared with its 0.77 lead in the 2016 survey. American
Airlines held onto its second-place spot, improving its score both overall and
in about half the categories, but third-place United Airlines tightened the gap
between the two to a hundredth of a point, improving in seven of the 10
categories. Southwest Airlines, meanwhile, lost a bit of ground compared with
last year, improving in only one category.
What hasn't changed in the past year is that all four
carriers remain comfortably profitable, which affords them the capability to
invest in new services, new aircraft and their sales teams. American Airlines
CEO Doug Parker made a media stir this fall by telling reporters and analysts
that the carrier would never lose money again, even profiting in the down
cycles. At The Beat Live conference this year, Parker clarified that those
remarks were not meant to be braggadocio but to reflect a new era for airlines
in which reinvestment remains at the forefront. "As long as we keep
pretending the past is the present—that we can't afford investment, that we
need to save money for a rainy day—we hold ourselves back," Parker said. "This
industry is permanently and fundamentally transformed, and it's important to
Delta's Continued Evolution
In its years at the top of BTN's list, no one could accuse
Delta of coasting, as it has improved its total score each year. This year, its
total score reached 4.4 out of 5, up a tenth of a point from last year and from
3.14 in its first year atop the field. Global sales SVP Bob Somers said the
improvement is a validation of Delta's strategy. "We're always evolving to
meet the needs of our customers," he said. "This is visible
affirmation that, in the eyes of our customers, they recognize that we continue
to reinvent ourselves and meet their needs."
The most effervescent comments praised Delta's willingness
to communicate with travel buyers. Among the survey's 10 categories, in fact,
account managers and sales reps is the area in which Delta received its highest
individual score. Several respondents cited their own sales reps, while others
attributed Delta's achievement in the category to the sales team as a whole.
The carrier's score in this category was more than a point higher than its
closest competitor, the largest gap in any category. One travel buyer said
Delta implements their service-improvement suggestions within two to three
months. "Delta really listens to the corporate traveler manager and always
looks out for what's good for all, not just their bottom line," the buyer
This year, Delta relaunched its portal for buyers and travel
agents, adding more self-service options, including the Delta Edge Wallet point
system that manages upgrades and vouchers, said sales operations and
development VP Kristen Shovlin. Its Delta Edge Meetings product, introduced in
2016 largely in response to requests from its corporate advisory board, also
has grown and is in hundreds of travel programs, Somers said.
In addition, Delta this year expanded its Corporate Priority
Program, which offers benefits to travelers in corporate programs regardless of
frequent-flyer status. This year's expansion gives onboard crews the
opportunity to recognize corporate travelers and thank them for their business,
In BTN's survey, customer service for travelers was Delta's
second-highest-scoring area. "Delta has made tremendous efforts to reward
our corporate customers and make good on their corporate commitment," one
buyer said. "I've seen it at the airport, with sales support and with my
representatives. They are huge leaps and bounds above the other legacies."
Networks, partnerships and frequencies was another
high-scoring area for Delta, and several buyers particularly praised its joint
venture with Aeromexico, which was approved late last year. This year, Delta,
Air France-KLM and Virgin Atlantic announced they will combine their
partnerships into a single JV. Delta also formed a JV with Korean Air. CEO Ed
Bastian said during the carrier's most recent earnings call that Delta has
invested about $2 billion over the past five years in its partner carriers,
which also include Gol and China Eastern. Somers said, "These are all
things that speak to being more integrated and deeper with our partners than
any other alliance in the world."
Delta continues to lead its competitors operationally, as
well, and is improving its own performance, he said. As of early November, it
has had 189 days with no cancellations across its entire system, just four shy
of its total in all of 2016. Two years ago, Delta introduced its operational
guarantee, in which customers would get compensation should Delta's on-time and
cancellation performance fall below both American's and United's. United soon
followed with its own guarantee, and operational performance for all carriers
has been on the rise. "Operational reliability is even more pronounced
this year and continues to be a differentiator," Somers said. "They've
made the industry better, as well."
American Pumps Up Sales Efforts
American improved its score slightly, by 0.02 points, in BTN's
2017 survey. With heavy investment on the sales side this year, the carrier
hopes for bigger gains moving forward. It has filled 100 of the 132 new sales
positions approved for 2017, global sales SVP Alison Taylor said. The result
has been a "fresh mix of associates," including some brought in from
rival carriers, that has "led to a great vibe and a lot of movement,
training and onboarding," she said. During an October earnings call, SVP
of revenue management Don Casey said American has grown its corporate market
share in each of the first three quarters of 2017 and has added 16,000 small
and midsize corporate accounts this year.
American improved its complaint resolution score on BTN's
survey and moved from fourth to second in that category. One buyer in the
survey said, "American's customer service department is more responsive
than other carriers."
The sales support team now answer calls at any hour and has
reduced the number of calls by lifting caps on Flex Funds, with which buyers
and agents can manage and access fee waivers, according to Taylor. American
also ramped up training for customer-facing employees, has improved its
reaccommodation program for travelers with canceled or delayed flights or
missed connections, and introduced baggage notifications through its app, she
American also improved its score in meetings travel pricing.
Taylor said that could stem from a recent relaunch of its group conferencing
and incentive segment. "Last year, if large corporate accounts wanted to
book a group, we would have to refer them to revenue management," she
said. "Now, it's managed in sales and we have a new group booking system
and shopping experience for users." That platform is common between
American and British Airways, Iberia and future joint-business partner Qantas,
and the carrier also has enabled prepayment for group baggage. Additionally,
American has made seat assignments more flexible in group bookings for those
that wish to sit together, she said.
American is piloting customer portals with some of its corporate
customers that provide marketing information, specials and other data to travel
managers. The carrier plans to provide them more widely early next year, Taylor
United Scores on Network
It's been a tough year for United's public image, but the carrier's
reputation among corporate buyers has improved. Its score in BTN's survey
increased for value, transient pricing, meetings travel pricing, services and
amenities, distribution, complaint resolution and networks, partnerships and
frequencies. United's operations also have improved, particularly its on-time
performance, worldwide sales SVP Dave Hilfman said. "We have a lot fewer
complaints than we've had, and when we do occasionally have an issue that needs
resolution, we have systems in place to respond quickly," he said.
For the networks, partnerships and frequencies category,
United received the highest score in any category other than Delta. Hilfman
attributed United's performance in that category to always "looking for
opportunities where we would line up well with corporate client demand,
particularly internationally." In addition to major international route
additions, such as Los Angeles-Singapore, the carrier also is growing its
domestic network for the first time in several years, both increasing current
frequencies and adding midsize-community destinations, he said.
Several buyers specifically praised United's Jetstream
portal, introduced this year. The tool allows buyers self-service for penalty
waivers and Economy Plus upgrades, which had made up the majority of calls to
United call centers. The portal also provides operational statistics and other
relevant news. "We've been listening to clients and what they want, so
there are developments forthcoming with future waiver types," Hilfman said.
"We're very excited about the impact Jetstream has made on the
Buyers also cheered United's move this year to become the
first airline to go live with Concur TripLink. One buyer said it "gives me
visibility and my travelers choice, so we're anxious for others to follow
Southwest Adjusts Sales Structure
Southwest's score on BTN's survey declined 0.18 points year
over year, dropping in all categories except meetings travel pricing. Even with
the declines, Southwest continued to outscore both American and United in its
two best areas: customer service and value. The latter has traditionally been a
strong category for Southwest, as it remains the sole major carrier not to
charge bag fees or change fees. As for customer service, Southwest has invested
in a big way in hospitality," including flight attendants and customer
service at airports, said business development managing director Dave Harvey.
This year, Southwest has doubled the size of its sales
organization, and it's looking to build on that next year. "2017 was more
about professionalizing and building a foundation, trying to create technical
skills, contract skills and skills around service and operations analytics,"
Harvey said. "Now, in 2018, we can scale and extend the team with more
direct selling resources."
In the meantime, contracting at Southwest has risen year
over year in both renewals and new corporate customers, he added. The carrier
also built up service at Cincinnati this year. Delta had downsized its hub
there significantly after its 2008 merger with Northwest Airlines, and Harvey
said Southwest's buildup was "a big corporate play." Similarly,
Southwest has built up its network within Florida, will expand its service out
of Oakland next year and is working on flights to Hawaii, which will "get
us in all the major markets in the United States," he said.
Another potential score-booster for next year is
Southwest's May 2018 switch to a new Amadeus-based reservations system. The
carrier is developing plans around the capabilities this move unlocks,
including allowing self-service when travelers need reaccommodation during
irregular operations, adding red-eye flight options and enabling interlining
and codesharing with other carriers. That last one, in particular, Harvey said,
could open up chances of courting corporate customers with global needs.
Airline Survey Methodology
From Sept. 9 to Oct. 20, BTN collected 561
responses from travel manager and buyer members of the BTN Research Council and
subscribers of BTN and Travel Procurement and 86 responses from travel agents.
Eleven percent spent $500,000 to $1.9 million on U.S.-booked air volume in
2016, 38 percent spent $2 million to $12 million, and 35 percent spent more.
BTN developed the categories with travel buyers, corporate travel agency
mangers and airline sales executives. It averaged scores in each category to
create an overall score for each carrier, weighing each category equally.
Respondents graded only those airlines with which they negotiated a contract or
booked a meaningful amount of business in the past year. Participants who
offered no response for a particular category or airline were not included in
that category or airline's average rating. The survey listed the largest
domestic airlines as identified by the U.S. Department of Transportation,
excluding regional affiliates of major carriers. Alaska Airlines, Frontier
Airlines, JetBlue and Virgin America elicited responses from less than 25
percent of the final survey sample and therefore were excluded from this
report. Equation Research hosted the survey and tabulated the results.