Marketing and pricing: April 2008 Archives

Is it thirty years already? Actually yes. It is three decades today since Delta Air Lines Flight No. 10 took off on its maiden flight from Atlanta to London's Gatwick, bringing the Delta name and brand across the Atlantic for the first time. R. S. Maurer, then Delta’s vice chairman of the board, predicted that “this new Atlanta-London air route will be a major catalyst in an expansion of international business and tourism here. For Delta, this is a dream of more than a decade in length. For several of you here, I suspect that you have for even longer a period waited for Atlanta and Georgia to take this great step forward as a vital world air transportation center."
Things were different back then: Crude oil was $13 per barrel, compared to more than $115 today. Delta reservations were made by telephone through agents in Atlanta or London because the Internet, personal computer and on-line shopping did not exist. Flight No. 10 was operated with a Lockheed L-1011 with 24 first-class and 238 economy seats. Delta showed its first in-flight movie, a 16mm version of “Oh, God,” starring George Burns and John Denver. Economy roundtrip airfares were $844 round-trip, which in inflation-adjusted dollars now would be about $2,764 round-trip

We’re okay. Really, we are. Frontier Airlines is telling people as much, evne though it surprised a few people with its bankruptcy filing overnight Thursday/Friday. Frontier, which has an incredibly loyal following in its Rocky Mountain home territory, kept flying, though, unlike Skybus, ATA and Aloha, all of which went into reorganization and shut down. Frontier took pains over the next few days to remind people it was flying and fine.
So did a few other carriers that, in the musty, oft-confused, and often mysterious thing called the public mind, were perhaps facing some turbulence. AirTran, which is doing pretty darn well, thank you, came out and told people it was fine and had plenty of money.
Sun Country, the privately held carrier up in the Twin Cities, went out of its way to say it was confident about its future and enlisted local airline commentator Terry Trippler to say “I believe for the first time in a long, long time this airline’s being run like an airline should. I have high hopes for it. It’s up to the people of Minneapolis/St. Paul to decide if this airline succeeds." But any appeal to the public depends on public confidence, and the flying public will decide this summer if these carriers build up the cash reserves they will need to keep flying as winter comes.

They set out to change the world, these New Age tech guys like Alex Zoghlin, and projects like Zoghlin’s G2 SwitchWorks were once the new tech that would kill off the old tech of the GDSs, the Global Distribution Systems. G2 and its few counterparts were quickly dubbed ‘Genies’ - or GNEs, for GDS New Entrants. Airlines had chafed under the power of the old-line GDSs - Amadeus, Galileo and Sabre - to control their distribution to travel agents and corporate travel departments and to charge the carriers at every step of the game; they quickly claimed that they had uncapped the genie that would tame the GDSs. The new entrants’ web-based technology would show that the main-framers and their vacuum-tube approach were obsolescent. G2 and ITA Software offered easier, and cheaper, to use web-based technology for travel agents and corporate travel departments to access, reserve, book, and pay for airline seats and products. The high point came when big groups such as the Star Alliance chose G2 (see picture of Zoghlin at the signing) as well as ITA to use them as an ‘alternative distribution platform.’
It didn’t quite work out that way.

One place where they were funny on April Fools Day was Canada (yes, really). Seems that WestJet, the nation’s number two airline, ran a little news item, complete with a picture, about how it was offering a real deal: real legroom and indeed a sleeper seat. Just pay $12 (in Loonies) extra and you can reserve an overhead luggage compartment and stretch out. Well, humor is perhaps second or third behind hockey amongst Canadian national pastimes, and many in the Great White North took it seriously. So many people called in that the carrier decided to offer a discount on regular tickets to people who asked about the sleeper seats and then decided to buy a regular ("waker?") seat.