Delta Air Lines recorded a 20% bump in revenue from sales of products in its emerging merchandising portfolio during the first quarter to $165 million, as it works to achieve revenue of roughly half a billion in sales annually from products allowing passengers to customise their journey.
Economy Comfort, first class up-sells and priority boarding are the pillars of Deltaʼs merchandising offerings, which the carrier is banking on to continue its profitable revenue growth, carrier president Ed Bastian recently declared.
“Another important area of revenue opportunity is our merchandising efforts,” said Bastian. “These are products and services that allow customers to tailor their travel experience and improve their overall satisfaction while also increasing our revenue.”
Bastian remarked that during the first quarter Deltaʼs first class up-sell program “helped increase our paid first class load factor by five points to 45%”. He believes Deltaʼs retailing efforts should “grow this high margin revenue stream by $500 million annually over the next three years”.
Many airlines are just beginning to undertake merchandising their ancillary products, and Delta is no different. Near the end of 2013 the carrier cited challenges in ensuring maximum exposure for Economy Comfort to the proper customer segments, particularly in global distributions systems (GDSs).
Delta should see some relief from constraints of properly showcasing Economy Comfort in some GDSs this year. The carrier has opted to use the Travelport Rich Content and Branding technology featured in Traveportʼs Travel Merchandising Platform, which was launched roughly one year ago
The Rich Content and Branding element is scheduled for launch in the coming months after a test phase with a number of partners. With the new module, airlines can “more effectively control how their flights and ancillaries are visually presented and described on travel agency screens, bringing them more in line with the airlineʼs own website experience”, explains Travelport. Other components of Travelportʼs merchandising suite are aggregated shopping and ancillary services sales. Travelport owns and operates the Apollo, Galileo and Worldspan GDSs.
In late 2013 Delta chief revenue officer Glen Hauenstein concluded that as the carrierʼs merchandising efforts evolve, the airline was trying to determine “what the customers want to buy” and how to make the various products easier to purchase. Travelport seems poised to help the carrier achieve those goals.