LoneStarMike
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Delta's Last Stand - Article About New Technology

Mon Apr 21, 2003 12:58 am

Fascinating article from Baseline about new technology developed for Delta called Delta Nervous System.

Before its industry went into a tailspin, Delta Air Lines invested $1.5 billion in an instant information network to serve customers better and save millions of dollars. Will that be enough to make it the last major airline able to attract price-conscious passengers and stave off crushing cost competition?

Delta's last stand
04/01/2003

LoneStarMike

 
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RE: Delta's Last Stand - Article About New Technology

Mon Apr 21, 2003 3:04 am

Thanks for posting the article Mike--it was quite a bit longer than I'd initially anticipated! I'd really like to see this work--a major airline able to reform itself into profitability. I'm not so sure about the future of Song, but it seems like Delta is at least partially on the right track with cutting costs elsewhere. I just hope that most of the positions to be eliminated can be done through voluntary early retirements and suchlike rather than additional layoffs.
 
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RE: Delta's Last Stand - Article About New Technol

Mon Apr 21, 2003 3:18 am

This is an excellent and exhaustive (and exhausting to read) article. Let me add my thanks for posting it.

I take away three things from this....

First, the old adage, "Fix your roof when it's sunny, not when it's raining" rings true for Delta. By investing in the information system upgrade while things were going well, Delta will benefit (and is already benefitting) from it during lean times.

Second, a "full-service" airline needs a hub and spoke system to allow passengers to fly from anywhere to anywhere. But they also have to be mindful of niche markets that are more economically served by point-to-point operations. So the network carriers must adapt to this reality, and Delta is doing it with Song.

Third, I was surprised to see that Southwest had realized a yield of over 11 cents per RPM, as opposed to just over 12 cents for Delta. That shatters the myth of WN being a low-priced airline. The reality is that WN judiciously chose to enter high yield markets where they positioned themselves as the low-priced carrier within those markets. Very smart, indeed!

Pete

"In God we trust, everyone else bring data"
 
deltadude8
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RE: Delta's Last Stand - Article About New Technology

Mon Apr 21, 2003 4:50 am

Hopefully Delta can stay afloat along with the other U.S. carriers...There are a ton of jobs to be lost...I hope though that no one else gets their job taken
 
jhooper
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RE: Delta's Last Stand - Article About New Technology

Mon Apr 21, 2003 5:37 am

The reduced demand may very well force carriers out of the market. It's survivial of the fittest.
Last year 1,944 New Yorkers saw something and said something.
 
LoneStarMike
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RE: Delta's Last Stand - Article About New Technology

Tue Apr 22, 2003 7:33 am

Third, I was surprised to see that Southwest had realized a yield of over 11 cents per RPM, as opposed to just over 12 cents for Delta. That shatters the myth of WN being a low-priced airline. The reality is that WN judiciously chose to enter high yield markets where they positioned themselves as the low-priced carrier within those markets. Very smart, indeed!

I disagree with your statement That shatters the myth of WN being a low-priced airline.

I think because Southwest is a low-priced airline, they are able to sell a higher percentage of their full-fare tickets. I think I read recently that 35% of all tickets purchased at Southwest were full fare tickets. I don't know how this compares to the other airlines, but I'm guessing the percentage of full-fare tickets purchased at other carriers is lower. So even though Southwest may make less profit per ticket, they sell more than enough tickets to make up for the difference.

Anyway, the new Delta technology sounds interesting. Any time frame as to when it will be implemented at the smaller stations?

LoneStarMike

 
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RE: Delta's Last Stand - Article About New Technology

Tue Apr 22, 2003 8:10 am

The computer systems that DL has purchased is arguably the best system in the industry. AA's SABRE has been able to become a freestanding enterprise that generates revenue for AMR, but no longer holds the mantle for finest in the industry. Here's my case:

The platform on which the DL system is built enables the use of periferals without largescale system overhauls. Broadband can be implemented tomorrow if necessary without having to change out computer systems. Web access is available at every set for imformation purposes.

When the system is used properly, here are the advantages relative to other systems. The use of barcodes on passenger boading cards enables passengers who have misconnected proceed directly to the next flight, use their old boarding card, or FF cards to obtain their seats. If a seat has not been given, the computer automatically does so and a new boarding pass is issued. NO NEED TO WAIT IN LINE. Same procedure occurs for equipment substitutions.

Gate connections are automatically uplinked to a/c within range of hub airport. These gates are displayed on the TV monitors on the plane on a/c equiped with moving map technology. All 737-800, 777's, 767-400's, 767-300ER's (International), MD-11's are so equiped.

The next step for DL Technology is to market this system to other carriers much like AA has done with SABRE. The appeal for SABRE was that it was in virtual all travel agencies, but the diminishing role of travle professionals in vacation planning has mitigated the importance of new carriers having SABRE. The DL system has been paid for and is the most advanced system in the airports today. Look at other carriers gates like NWA, some AA stations, CAL and they are using plastic signs. A DL gate has several wide screen displays with top questions that passnegrs frequently ask such as flight duration, a/c information, weather at destinaiton city, standby lists and boarding times.

The design end game for this system is to mitigate the human element at the airport. The airlines are seeking to do what the banking industry did with ATM's 10 years ago. When was the last time you went to a bank and saw a teller. How many banking transactions did you execute last year online, or through an ATM? As scores of Check In Kiosks come in to airport lobbies, you will begin to see them in concourses.

The Check In Kiosks still have some programming that needs to be done. Seat selection, future ticket purchase, and ticketing issues to name just a few. Within the next 2 years these issues will be solved and newer web based applications will be added (Obtaining hotels, rental cars, general info, etc..)

The DL system is positioned for the next step in self service technology. Fewer employees in customer service for a smaller employee headcount. The DL comuter system was built on profits derived from the tech heydays of the 90's. Remember when DL got all of those warrents for priceline.com? Then they cashed them in one year and made more money off of it than they did running the airline for a year. That's where the money for this system comae from.
 
gigneil
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RE: Delta's Last Stand - Article About New Technol

Tue Apr 22, 2003 8:24 am

The new United system is really quite nice... its in Chicago, as well as San Francisco and Aspen apparently. I really can't wait for IAD to get it. IAD has United's new information boards for departure and arrival info, but not the EasyInfo gate service.

While being nice, its not as nice as DL's...

N
 
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RE: Delta's Last Stand - Article About New Technology

Tue Apr 22, 2003 12:57 pm

This is where Delta will really shine, and I am impressed by the description this excellent article.

Unfortunately, the boneheads at United once again erred in this department. Had they seen the handwriting on the wall, they would have deployed scanning technology for their automatic gate readers rather than the traditional MILTOPE magnetic-stripe ticket eaters. It is a simpler system that has sped up boarding (contributing to United's on-time performance), but has ZERO potential for technological upgrades.

This is why United is finding a tough time rolling out a web check-in product... it has no gate readers that can scan a regular bar code.
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