THE LIFTER OF ALL BOATS
Getting Delta to think more like the customer, Holtz led the charge in transforming operations that, in 2013, achieved 95 days with 100 percent completion factor. Operations excellence drove interline fee hikes and an performance guarantee for corporates.
Riding into 2015 on its industry-leading operational performance, Delta Air Lines last year moved beyond bragging rights and now uses its record to its financial advantage, motivating other carriers to up their games.
It was in 2011 that Delta “turned the corner from mediocre operation to excellent operation,” said senior vice president of operations and customer center Dave Holtz, who led the charge. It all stemmed from Delta “starting to think more like a customer,” doing everything it could to minimize delays and cancellations, including opening more maintenance bases and better synchronizing arrivals and departures at hubs, he said.
By 2013, Delta by its own accord achieved 95 days with a 100 percent completion factor, compared with United Airlines and American Airlines’ collective 10 days, and was leading in on-time performance.
Delta increasingly is using that as a marketing tool, including with corporate customers, Holtz said. In July, it introduced the Operational Performance Commitment, a contract that if corporates meet certain requirements and the carrier’s performance falls below both that of United and American, it will compensate those corporate customers.
By the end of 2015, United had followed up with a similar guarantee. Holtz said Delta welcomes other carriers following suit. “They realize if they don’t come up with something like that, they’re going to fall behind,” Holtz said. “We say all the time, you can’t run a great airline and have everybody else run a terrible airline, so we don’t mind that other airlines are decent.”
Delta leveraged its operational record in another way, as well: to be more aggressive with interline agreements, which allow carriers to rebook passengers on each other’s flights during irregular operations, such as bad weather. Delta’s best-in-class operational record meant it was accommodating more of its competitors’ passengers than the reverse, according to Delta. In August, United signed a new agreement that raised its reaccommodation payment to Delta, but American declined the next month, ending the interline agreement between the two carriers.
Even from its leadership position, Delta has set a goal to improve its performance in 2016, Holtz said. In particular, the carrier aims to improve its regional partners’ operations, as well as the way it treats travelers affected by delays and cancellations. “We’re surveying and listening to our customers, making sure we can change with them or ahead of them,” Holtz said.