ATLANTA -- Delta Air Lines unveiled its electronic commerce
strategy under a redesigned Web site, a move seen as creating
direct links with corporations and agencies at the expense of CRSs.
The newly named Delta-air.com site is designed to enable corporations
to book trips directly with the airline, which Delta said will help
it save hundreds of millions of dollars in distribution costs.
The carrier said it spends about $500 million in annual CRS
fees, and millions more more in agency commissions and credit card
fees. According to Delta, a traditional booking costs the airline
400% more than a Web booking. Between 5% and 10% of Delta's annual
sales of $14.7 billion comes via the Web.
Key to the strategy is a previously undisclosed on-line agency
service center that eventually will enable travel agencies to book
directly with the carrier. Under the original plan announced last
year, Delta planned to bypass the agency system.
Under that plan agencies could not book directly through the
site. By throwing this olive branch, Delta can placate its agency
partners while cutting critical CRS fees, a move similar to
Continental Airlines' previously announced strategy.
Steve Scheper, general manager-agency and corporate program
development at Delta, said, "This is the first level of stone in a
pyramid. As you work up the pyramid each layer of stone adds
increased functionality."
The on-line agency service center, scheduled to begin in March,
will enable agencies to access commission rates, baggage
information, group travel rates, discount agent fares and data on
individual agency performance. Delta said it expects that agencies
will be able to book directly through the site later this year.
For now, Delta is beta testing the corporate booking system with
two customers, which it refused to identify. The companies are
testing whether employees can book negotiated discount fares and
publicly available Web-based fares through the delta-air.com
site.
During the monthlong test, customers will enter their SkyLinks
frequent flyer number and a special corporate ID number when making
a booking. The carrier said it hopes to have its entire base of
corporate accounts using the system before the third quarter.