Delta Focusing on the Finer Points of Flying

Twice a week since February, groups of hundreds of Delta Air Lines flight attendants have trooped into a vacant department store on Peachtree Street in downtown Atlanta to the hip-hop sounds of The Black Eyed Peas.

After an update by executives on the state of the company, Delta's marketing vice president Joanne Smith speaks from a stage set up in an old cosmetics section.

It's a very temporary operation, so the airline only invested in paint, carpet, a sound system and some lighting. "There's a lot you can do with lighting," Smith says in a telephone interview.

"I talk about the brand," she says, "what Delta is doing to enhance the customer experience."

In all, 11,000 flight attendants and 1,000 other employees have gone through the day-and-a-half sessions, which end with a sampling of new items on Delta's menu and the Mile-High Mojito and Mango Kiss cocktails Delta flight attendants will shake up and serve passengers for five bucks.

When she's not in the sessions, Smith works on other ways to heighten the experience of flying on Delta. The airline has introduced new uniforms by designer Richard Tyler, a choice of snacks in coach and free wine or beer with meals in international coach travel. It is rolling out a new menu by noted Miami chef Michelle Bernstein for overseas "business elite" fliers and has struck cross-promotional deals with companies like Henri Bendel and Lather Spa.

You wouldn't know from this display of marketing energy that Smith works for a bankrupt airline that has had to win concessions from workers and cut back its operations to survive.

Or that Smith herself had to watch while Delta folded the Song subsidiary, which she led as president, when Delta ran into a financial crisis.

"The last 10 years have been really rough for the industry as a whole and Delta specifically," Smith says.

Relentless cost-cutting has prompted the old-line carriers to take away virtually all of the amenities offered travelers, down to the last bag of peanuts on some airlines. "We made cuts over the years that now, in hindsight, we need to add back," she says.

It's only because the bankruptcy law allows companies like Delta to renegotiate contracts and forgo some debts that it is able to start life over and begin offering fliers a better experience. Delta cut its expenses by $200 million a year, Smith says.

Despite Smith's focus on customer service, the reasons people choose one airline over the other aren't cocktails, entertainment systems or flight attendant uniforms. Smith says the top three are price, schedule and the frequent-flier program.

Yet she contends that the overall experience an airline gives customers will influence their level of satisfaction - and that could affect whether they take future flights or recommend the airline to friends.

Aiming to raise the level of customer satisfaction means going up against Forest Hills-based JetBlue, which won top ranking in J.D. Power and Associates' survey of customer satisfaction in March 2005.

Delta, including Song, ranked third, behind Southwest Airlines. This year's rankings are due Thursday and they will be closely watched by the airline industry, which is beginning to get back on its feet after absorbing sharply rising costs for jet fuel.

JetBlue was a pioneer in enhancing air travel with seat-back entertainment systems, more comfortable seats and a choice of snacks. Song was Delta's way to compete with JetBlue, particularly on routes from the Northeast to Florida.

Smith says she was disappointed by the May 1 closing of Song. "It was a fabulous experience for me personally," says the 47-year-old executive, who got her start as a flight attendant on a small California airline while she was studying business in college.

In those days, the late 1970s, flying seemed like an endlessly glamorous business to Smith, a native of San Luis Obispo, on California's central coast. "Going to Paris for the weekend was really not unusual," she says.

She still speaks enthusiastically about the business and says she wouldn't be surprised if her two daughters, ages 10 and 13, wound up in it.

Her new job gives her the opportunity to spread Song-like strategies to the much larger Delta operation. Song's 48 planes, equipped with seat-back systems including movies on demand (for $5 a showing in coach), are now in Delta's fleet and another 69 planes are being converted to the system in the next 18 months. At that point, Delta will have the systems on one quarter of its fleet, mostly the aircraft that serve longer routes.

New York is key to the ambitions of Delta and JetBlue. Delta has a dominant position at LaGuardia Airport, and Smith says Kennedy Airport is "just a huge opportunity for us," and the airline is adding flights there.

JetBlue spokeswoman Jenny Dervin counters that "it's nice that Delta wants to be No. 1 at JFK and wants to be No. 1 in New York...that doesn't interfere with the reality that New York is JetBlue's home, we live here, we raise our families here."

Dervin points to Port Authority statistics that show JetBlue handling more passengers than any other at Kennedy (10.4 million in the year ending April 30) and says the airline is opening new gates and adding new aircraft to its fleet to grow its New York service.

She agrees that the competition is heating up and says JetBlue is tweaking customer service on its overnight transcontinental flights with such amenities as sleep masks, lip balm and hot towels.

Both airlines are wrestling with a tricky challenge: how to keep appealing to customers while cutting costs.

"The airline that maintains a maniacal focus on keeping costs under control is the airline that wins in the end," Dervin says. "That's the airline that can go into a market and offer fares at 50 percent of what used to be offered."

Here's one example of how unforgiving the airline business is: A 10-cent increase in the fuel price per barrel adds up to $40 million of unbudgeted cost for JetBlue, Dervin says.

At Delta, Smith says high fuel costs have been built into the "restructuring and recovery plan" and the airline is moving ahead with its improvements.

"All airlines have recognized that airline travel has become kind of a drudgery," says Smith and they're looking closely at how each company tries to make a difference. She says Delta has "dozens of people" who fly "thousands of flights" on other airlines to see who's doing what - and she says the others do the same.

In the fight for New York's skies, Smith promises Delta will be a key player.

In the fight for career survival, Smith says she learned a lesson from her transition from running Song to being part of the team at Delta. "You can never accept that a job is just going to get easier," she says. "Today's environment just requires constant change and constant innovation."

She begins her 11- to 12-hour workday with 25 minutes of crunches and other exercises to stay in shape. That's something of an ordeal but it's probably not the hardest part of Joanne Smith's day.

E-mail Richard Galant at [email protected].

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