Delta's Next Website Sells More Than Tickets
(04/09/01, 10:57 a.m. ET)
By Ted Kemp, InternetWeek
Now that Delta Air Lines has demonstrated that it can convince a
substantial number of customers to book flights online and enjoy
significant cost savings as a result, the company is about to start
selling other services on a new website.
Delta this month will roll out a site aimed at small-business
customers that arranges hotel reservations and car rentals, and sells
airfares from not just Delta but other airlines as well.
The membership-based website, called MYOBTravel, is only one in a
string of recent and planned e-business initiatives that Delta says
will push its online ticket sales to $1.4 billion this year, or 20
percent of the company's sales. The carrier's combined daily revenue
through its existing Delta.com site and travel services, such as
Expedia.com and Travelocity, averaged $3 million a day in March.
MYOBTravel is designed to steer small-business customers toward
purchasing Delta tickets primarily, but will offer fares from other
airlines if no Delta flights are available for desired times and
destinations. The site employs a direct link to travel management and
booking firm Worldspan's Global Distribution System (GDS) to book car
and hotel reservations and tickets from other airlines.
This allows the system to indirectly communicate with the other
airlines through the GDS, just as with other travel planners like
Expedia or Travelocity, said Jennifer Robinson, director of customer
service systems at Delta Technology, the carrier's technology
subsidiary. Delta will charge a standard online commission of 5
percent for fares it books on other carriers, with a maximum of $10.
Delta plans to establish direct links from MYOBTravel to its internal
reservation system, which will let it provide online access to balance
information and flight upgrades. MYOBTravel's technical backbone,
called the Delta Nervous System, manages network security,
infrastructure stability, online SkyMiles registrations, and outbound
e-mail notifications. Delta's customer database, which interacts with
the Delta Nervous System via XML links, stores customer profiles and
travel preferences.
Delta executives said they expect slashed distribution costs and the
Internet's increased efficiency over traditional sales channels to
save $45 million in calendar year 2001. That's more than double the
$20 million it saved in fiscal 2000, which ended in June. (Delta
switched to a calendar-year accounting system in January.) Those
savings will come by eliminating commissions paid to travel agencies
and issuance fees paid to reservation networks such as Sabre.
Other carriers' online ventures have produced mixed results. Last
year, Continental Airlines successfully started an online sales
program for business customers that lets corporations monitor travel
spending, and the company uses in-terminal Web kiosks to expedite
passenger boarding.
American Airlines, on the other hand, has suffered from a series of
missteps, including a failed implementation of BroadVision content
management and e-commerce apps.
Also on the horizon for Delta is a partnership in Orbitz, a neutral
Web destination backed by Delta, Continental, American, and others
that will sell tickets and compete directly with Expedia and
Travelocity. The site is slated for a June launch. Fares offered
through Orbitz will be cheaper than those through Delta's traditional
channels, a company spokesman said.
Justin........
My hindsight is 20/20.........
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