Howard Hughes
Well-known member
- Joined
- Feb 7, 2007
- Posts
- 134
http://www.forbes.com/free_forbes/2007/0521/044.html?partner=yahoomag
Gerald Grinstein put bankrupt Delta Air Lines back in line to take on the leaders.
His strategy: Be nice to your customers and employees.
With the cutbacks, which allowed Grinstein to lower fares, Delta now boasts a cost per available seat-mile (before fuel) of 6.7 cents, the second best (after US Airways) in the industry among U.S. carriers flying international routes. Delta, sitting on $3.5 billion in cash and $9 billion in new equity, expects to earn pretax $801 million in 2007 and $1.4 billion in 2008.
Grinstein is now adding back comforts, services and perks eliminated at other airlines. He's ripping out seats in its mainline jets and adding new leather ones with expanded legroom. Passengers get free HBO (movies, The Sopranos, etc.) on seat-back digital screens. They can also plug in headsets and browse 10,000 songs. Coach customers on flights of 1,750 miles or more get one complimentary alcoholic beverage and full meal service.
J.D. Power and Associates ranked Delta second only to Continental last year in overall customer satisfaction. In several important areas, like boarding, baggage handling, flight crew and aircraft cleanliness, where employee satisfaction is pivotal, Delta ranked number one. "People say 'You changed the culture at Delta,'" Grinstein says. "I tell them I didn't change anything. What I tried to do is restore what we had before--an ability of employees to work together and solve problems."
In 2005 Grinstein hired Continental Airlines (nyse: CAL - news - people )' former chief network strategist, Glen W. Hauenstein, to give Delta a route makeover. Hauenstein began moving 36 wide-bodies overseas where they would generate higher profits. Last year he shrank Delta domestically by 13% while adding 60 international routes. This year 35% of Delta's revenue will derive from international travelers, a percentage that will reach 50% sometime beyond 2010.
Delta is now the largest U.S. carrier serving Europe, with 56 daily departures this summer. In June Delta will fly to 36 cities in Europe, Africa, India and the Middle East. It is taking delivery on 28 new airplanes by 2009, including 10 Boeing 777s and 3 757s. The cost, roughly $900 million a year, will be covered with cash from operations.
Note: Expect the satisfaction ratings to go up further this year now that the new branding and improvements are getting put into place. On a side note, I was in the Atlanta terminal last week and the new branding along with flat screen monitors everywhere really does look sharp....more like a sophisticated European product than what many have come to expect from shoddy US airlines.
Also, I think the airplane figures RE 757's etc might be off.
Gerald Grinstein put bankrupt Delta Air Lines back in line to take on the leaders.
His strategy: Be nice to your customers and employees.
With the cutbacks, which allowed Grinstein to lower fares, Delta now boasts a cost per available seat-mile (before fuel) of 6.7 cents, the second best (after US Airways) in the industry among U.S. carriers flying international routes. Delta, sitting on $3.5 billion in cash and $9 billion in new equity, expects to earn pretax $801 million in 2007 and $1.4 billion in 2008.
Grinstein is now adding back comforts, services and perks eliminated at other airlines. He's ripping out seats in its mainline jets and adding new leather ones with expanded legroom. Passengers get free HBO (movies, The Sopranos, etc.) on seat-back digital screens. They can also plug in headsets and browse 10,000 songs. Coach customers on flights of 1,750 miles or more get one complimentary alcoholic beverage and full meal service.
J.D. Power and Associates ranked Delta second only to Continental last year in overall customer satisfaction. In several important areas, like boarding, baggage handling, flight crew and aircraft cleanliness, where employee satisfaction is pivotal, Delta ranked number one. "People say 'You changed the culture at Delta,'" Grinstein says. "I tell them I didn't change anything. What I tried to do is restore what we had before--an ability of employees to work together and solve problems."
In 2005 Grinstein hired Continental Airlines (nyse: CAL - news - people )' former chief network strategist, Glen W. Hauenstein, to give Delta a route makeover. Hauenstein began moving 36 wide-bodies overseas where they would generate higher profits. Last year he shrank Delta domestically by 13% while adding 60 international routes. This year 35% of Delta's revenue will derive from international travelers, a percentage that will reach 50% sometime beyond 2010.
Delta is now the largest U.S. carrier serving Europe, with 56 daily departures this summer. In June Delta will fly to 36 cities in Europe, Africa, India and the Middle East. It is taking delivery on 28 new airplanes by 2009, including 10 Boeing 777s and 3 757s. The cost, roughly $900 million a year, will be covered with cash from operations.
Note: Expect the satisfaction ratings to go up further this year now that the new branding and improvements are getting put into place. On a side note, I was in the Atlanta terminal last week and the new branding along with flat screen monitors everywhere really does look sharp....more like a sophisticated European product than what many have come to expect from shoddy US airlines.
Also, I think the airplane figures RE 757's etc might be off.
