Delta Puts Own Stamp on ASA

When much of Atlantic Southeast Airlines' former staff reports for work at the Atlanta airport these days, they're clocking in for a new employer --- Delta Air Lines.

Still trying to get a handle on the misplaced bags and other problems that have plagued the regional carrier's Atlanta operations for years, Delta has just absorbed about 1,230 ASA employees who fuel aircraft, board passengers, and load and sort luggage. The Atlanta-based company, a former subsidiary of Delta, flies about one out of six Delta customers at the airport.

As a result of the changeover, Delta's local ground-handling staff jumped 25 percent to about 6,000 employees. It also picked up responsibility for about 400 extra flights a day in Atlanta --- almost 70 percent more than before. ASA's total employment, meanwhile, fell from about 6,000 to 4,700.

Executives say customers will see only better service as a result of the switch. Charged with making good on the prediction is Wayne Aaron, vice president of Delta Connection.

"There has been a ton of planning for this," said the 38-year-old Atlanta native, who was put in charge of overseeing Delta's feeder airlines in April, about a month after Delta announced that it was taking over ASA's ground operations in Atlanta on June 1. He expects better on-time performance and fewer lost bags and cancellations to eventually result.

ASA President Bryan LaBrecque, who runs the unit for Utah-based parent SkyWest, also predicted a smooth transition because the former ASA employees will continue in their old jobs, at least initially.

"In some cases these people will be stepping on the same buses they had . . . and checking in with the same supervisors they had," said LaBrecque. "The customer won't even know the difference."

So how will the change lead to improvements? Delta expects that to come through more employee training and more flexibility to use ASA's gates and plane parking areas in concert with areas where it already handles ground operations for other regional partners that operate Delta Connection flights. It also says ex-ASA workers will generally get better pay.

The transition started Friday. Delta reported that 77 percent of ASA's flights and 86 percent of Delta's flights arrived on-time in Atlanta during the first three days --- on par with previous performance.

"This is the quickest I've gotten my luggage on Delta," said Hugh Butler, an accountant from Houston, whose suitcases were already on the baggage claim carousel when he walked up after arriving on a Delta Connection flight to Atlanta.

Keith Dominick, who was returning from a sales trip to Richmond, said he had to wait about 15 minutes to pick up his luggage, about normal. But his flight also took off about 45 minutes late because the previous flight arrived late.

"Every week's different," said Dominick, of Altanta. "Some weeks are good, and some weeks every flight's late."

Delta's absorption of ASA ground crews is part of a broader move to improve service at its growing stable of Delta Connnection carriers, whose jets all fly under the Delta Connection banner but belong to different companies.

Aaron said improved performance is one of the top corporate goals this year. The airline has increasingly relied on regional carriers as it shifted more big jets to international routes. In Atlanta, the number of regional carriers flying Delta passengers has doubled over the past year, from three to six. Systemwide, Delta expects to have nine regional carriers by the end of the year, said Aaron.

"It's two-thirds of our departures. It's a substantial part of our business," he said.

Delta is adding 76-seat regional jets with first-class cabins on some of its contract carriers, hoping to make high-mileage business fliers happier to find themselves on the smaller jets. It is considering adding first-class cabins to its 70-seat jets as well. Delta says it also plans to take over cleaning of its regional carrier's jets and to refurbish interiors, starting with more comfortable seat cushions.

The airline also plans to spend up to $35 million on jetways that will accommodate the smaller jets on Concourses C and D of the Atlanta airport.

It makes a lot of sense for Delta to upgrade its feeder carriers' product, since its post-bankruptcy recovery plan is aimed at wooing lucrative business and international customers, said William Bogner, a management sciences professor at Georgia State University's business school. For many of Delta's corporate customers in smaller cities, the first and last flights are typically on a regional jet.

"It's the weak link in the chain," he said. "If that's a lousy experience, then people are going to find another way out of . . . Peoria than Delta."

Mike Boyd, a veteran industry consultant who has sometimes criticized ASA over its service to smaller cities, said he believes tighter supervision and better training and pay under Delta will bring improvement.

"There's probably dancing in the streets in a lot of communities around Atlanta," he said. "Delta's management understands customer service."

Indeed, Delta's on-time ranking has climbed significantly in monthly government reports. ASA and Delta's regional carrier subsidiary Comair have often ranked near the bottom for late flights and lost luggage.

Late last year, ASA began a campaign to improve its performance by adding workers, buying more equipment and changing how it handles bags and services its aircraft. The changes were apparently beginning to pay off: ASA, previously often dead last out of 20 carriers, was in 16th place in the U.S. Department of Transportations on-time ranking for April, and 16th in terms of baggage complaints.

LaBrecque said ASA's climb in the numbers is because its employees are "out there busting their humps to get it done . . . We're in the top echelon of the regionals right now."

The improvements weren't fast enough for Delta, however, which announced in March that it was taking over ASA's ground-handling operations. Industry insiders say other major airlines also have recently been taking over ground operations from contract carriers at key airports, including Continental at its hub in Houston, and United at its Chicago hub.

LaBrecque is philosophical about Delta's move. "If this is the next step in the evolution, then we're OK with this process," he said. "We're willing to do what it takes to be Delta's choice."

Boyd said he sees no downside in Delta's decision to take over ASA's ground-handling staff. "The big thing is ASA employees get Delta management and maybe a bump in pay, and small communities no longer have to fear Concourse C."

REPAIR WORK

Delta's move to take on ASA's ground workers in Atlanta is the latest effort to fix chronic on-time and baggage handling problems at the contract carrier.

ON-TIME ARRIVALS

For 12 months ending April 2007:

...........On-time ........Industry

.........arrival rate......rank

Delta......76.4% ...........5

AirTran....75.1% ...........7

Comair ....68.1% ..........18

ASA........64.0% ..........19

Industry

average....73.9%

BAGGAGE COMPLAINTS

Complaints per 1,000 passengers, April 2007

...........Baggage ........Industry

...........complaints......rank

AirTran.....3.43.............2

Delta.......6.15............11

ASA.........8.27............16

Comair ....11.99 ...........19

Industry

average ....6.32

Note: Rank is out of 19 carriers for on-time, 20 for baggage handling. Source: U.S. Department of Transportation

ON THE MEND

Delta's takeover of ASA's Atlanta ground workers is the latest bid to fix service woes. Here's what's changing:

* Delta hired 1,230 ASA gate agents, rampers and other airport employees.

* Delta gets new flexibility to park the jets of ASA and other regional carriers at open gates at the airport, which it hopes will boost on-time rates.

* Delta plans to extend several initiatives started by its mainline operation, including extra training and refurbishment and regular deep cleaning of regional jet interiors.

* Delta plans to spend roughly $35 million to install jetways on the airport's C and D concourses for regional jets in 2008 and 2009. Currently, passengers walk across the tarmac to board the smaller jets.

ASA'S ROUGH RIDE

* 1979: Founded with one plane --- a prop-driven Twin Otter --- flying between Atlanta and Columbus.

* 1984: Became a Delta contract affiliate and grew into one of the regional airline industry's most prosperous players. Delta took part ownership, compiling a 28 percent stake.

* 1999: Delta paid $700 million for the 72 percent stake it didn't already own, and ASA became a subsidiary, with separate workers and managers.

* 2005: Fighting in vain to stave off bankruptcy, Delta sold ASA to Utah-based SkyWest for $425 million. But ASA remained a Delta Connection airline.

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