When Delta wanted to fortify its presence in the Big Apple, the airline tapped Gail Grimmett, who used to be in charge of pricing revenue management for the carrier, to be Delta's new executive vice president of global operations, New York. Grimmett talked with aviation editor Michael Fabey about the airline's plans for its vital hub.
Q: Why did Delta decide to move its New York operations out of Atlanta and up to the Big Apple?
A: There wasn't a face for Delta here. It was frustrating: We couldn't accomplish things at the pace we wanted because we didn't have someone up here or a constant presence.
The way you handle New York is different. Some hubs, you have loyalty. Here, there is so much competition. You have to fight for loyalty. Just having 14 sales reps isn't going to do it. It's now a hub for us, and there's more revenue for us on the table.
Q: Take me through your growth here so far.
A: Through the late '90s and through 2004, we were a big north-south carrier. We were indecisive at that point. As we went through our own restructuring, we saw the opportunity to reoptimize our network on the international side. Since 2005 we have been readjusting our north-south capacity. From 2005 to now, we've grown JFK by 70%. As the Northwest merger came along, we had tremendous flexibility. We plan to continue to grow New York.
Q: Where are you going to start?
A: We have to get pieces together to look at JFK. It's the key for growth for us; you're constrained at LaGuardia. But it's about New York -- not just JFK, not just LaGuardia.
This isn't a case of, "If you build it for us, we will come." Nobody owns New York. We want to be New York's hometown airline. We should be.
Q: How does a carrier go about becoming New York's hometown airline?
A: We need to be a community partner. We're involved with New Yorkers for Children and food banks. We need to have the right kinds of relationships. We're the sponsor of the Mets, the sponsor of the Yankees: That's brand awareness. We're calling 2009 the year of brand awareness.
Q: With the economy in a tailspin, that's a tough time to grow in any market, even New York.
A: It's a good news-bad news situation. In the airline industry, where our "manufacturing plants" are moveable. We just need to make sure we have the flexibility to manage this situation. You have to be much smarter about the way you do business.
We're much quicker now about adjusting our network. We're much smarter about everything -- the alliance we have with the SkyTeam presence. If there's weakness of demand on one place, we can focus on another but still have a presence.
This is a global economy; you want to make sure you serve it. You don't want to make travel inconvenient for the passenger.
Q: What's driving passengers?
A: Everybody's price sensitive. But in this environment, pricing still has to be sensitive to the economy. And schedule makes a difference, as does ease of getting through the airport. Value is in the eyes of the customer, whether they're paying $40 or $400 for fares.
Q: Delta and other airlines have made headlines recently with comments about changing the traditional airline-distributor relationship. Any thoughts on that?
A: Delta has to be much smarter and more strategic about when to play in each one of the channels.