Delta Won’t Push Direct Connect, Exec Says

Delta Air Lines will not force direction connections on travel management companies, Chris Phillips, Delta’s managing director of distribution strategy, said.

“We are very respectful of how they want to do business, and we don’t want to disrupt that. Direct connect makes it harder for them,” Phillips said in a panel discussion at UATP’s Airline Distribution 2012 Conference in Madrid.

Although he did not name names, Phillips clearly was seeking to differentiate Delta’s approach to distribution from that of American Airlines, which has pushed its direct-connect strategy aggressively.

Working with Farelogix
But like American, Delta has been working with Farelogix on delivering its differentiated content to travel agencies. Phillips, however, views Farelogix not as a direct connection but as “another GDS.”

Farelogix provides a platform on which airline content can be aggregated, eliminating the need for travel management companies to connect directly with individual airlines to access their ancillary products.

Traditional GDSs are “still working on a broad basis, while we are working to decommoditize ourselves,” Phillips said. “Our product is very different in terms of the onboard experience.”

In addition, he said, Delta wants to deepen its relationship with passengers. “We want to know who they are, not just what kind of traveler they are,” he said.

Controlling content is key
But Delta is not seeking to bypass the travel agent, he said.

“We are less focused on ‘owning the customer.’ We just want to control our content and how it gets to the customer.”

Nor is its primary goal to bypass GDSs, Phillips said.

GDSs moving slowly
The carrier does, in fact, want to distribute its content through the GDSs, but GDS companies are not moving quickly enough to make that happen, he said. “We also think it can be done more cheaply than it is today.”

Although traditional GDS companies have made some progress in their ability to display ancillary products, they still cannot react quickly to new innovations, Phillips said.

GDS shortcomings
As an example, he said, Delta recently introduced Basic Economy on flights between Detroit and Fort Lauderdale, Fort Myers, Orlando and Tampa.

Phillips told Travel Market Report that the typical screen used by travel agents cannot deliver the information about the fare that passengers need.

Basic Economy is an E fare that is completely nonrefundable and non-changeable. Advance seat assignments are not available, even for Medallion passengers; seats are assigned at check-in. Passengers still get full Medallion qualifying miles and upgrades. Currently, roundtrip fares are about $12 to $15 cheaper than the lowest regular economy fare.

“We want them to know what they’re getting,” he said. “We don’t want them to be surprised when they can’t get an advance seat assignment.”

Still using green screens
Although newer agency desktops provide graphical user interfaces that can display more information than the typical green screen, they also offer the option of using cryptic commands on a green screen emulator. “You walk into any agency and they’re using the green screen,” Phillips said.