November 16, 2022

Delta Makes It a Dozen

Delta captures its 12th consecutive win, as Southwest soars to second. But ratings dipped for the airline industry overall.

For a 12th year in a row, Delta Air Lines took the top spot in BTN's annual Airline Survey, continuing to earn accolades from corporate travel buyers. Notably, for the first time since 2014, Southwest Airlines soared into second after seven years in fourth. Rounding out the rankings were United Airlines in third and American Airlines in fourth.

How Corporate Travel Buyers Rate U.S. Airlines

Though Delta had the highest overall score, at 4.43 on a 5-point scale, the three largest carriers all saw their overall ratings drop from 2021: Last year, Delta rated 4.66, United 4.08 and American 4.03. Southwest, however, increased to 4.15 from 3.87. In addition, Southwest's individual ratings improved across all 11 categories, while those for each of the three legacy carriers declined across each criterium.

Delta SVP of global sales Bob Somers noted that while Delta was very proud to have won during the recent pandemic years, "when you look at this year, our numbers are exceeding 2019 when you take out the higher counts the last two years," he said, adding that that's important to Delta because the company had more than 30 percent employee turnover, and "our customers are all new, too. "We had to reinvent ourselves with a new sales team, new customers and relationships, and [earning] the same credibility as in 2019 is really a source of pride for us."

VP of Southwest Business Dave Harvey partially explains the carrier's score increase versus last year as being a bit of an "anomaly," since Southwest had an "operational hiccup" last year when the survey was fielded. Still, he said that one of the improved scores that "jumped out" was for flexibility in transient pricing and contract negotiating. A few years ago, the company used to receive a "lot of feedback" that it was "rigid, kind of a one-trick pony and only had one flavor of our travel agreements and contracts," Harvey said.

Southwest responded by putting together a sales team "where we have more analytics, more customer success, and we bring our services team around it as well, being very much tailored and customized to that account's needs," he added. "In the last two years, that's improved over half a point [and] is one of our biggest gainers the last two years. That is great to hear that from the customers, that they've noticed we are doing more customized approaches."

United's third-place rating at 3.93 was "not what we aspire to, but we're very encouraged by the feedback we're getting directly from our customers, reinforcing that we're doing the right things every day to earn their business," United SVP of worldwide sales Doreen Burse wrote in an email. "Feedback, both good and bad, is always appreciated and fuels each next step." American Airlines, which has made some bold moves in the business travel space in the last couple of months, landed in fourth place with a 3.67 rating. Alaska, Frontier and JetBlue did not receive the required volume of votes to be included in the ratings.

Individual Rankings by Category

Higher Fares, Disruption Frustrations

Nevertheless, the increase in airfare pricing this year coupled with operational service snags at the beginning of the busy summer season—as well as strong demand amid still-reduced capacity that is keeping flights full—could explain the overall lower scores from 2021 for the three largest carriers. Staffing challenges across the air ecosystem also still are being worked out.

More than 27 percent of travel buyer respondents said that higher fares had "significantly impacted" their companies' willingness or ability to travel on business. More than 58 percent said they were "somewhat impacted."

Similarly, disruptions had a "significant impact" on return to travel for nearly one-third of respondents, with another 59 percent noting they had "some impact." As for airline customer service, responses were a mixed bag. Nearly 31 percent said it had improved in the past 12 months, 30 percent said it had worsened, while 39 percent said it stayed the same.

When asked what the carriers could do better the next 12 months, several buyers responded to that open-ended question with "lower prices" and "reduce disruptions."

In response to those high disruption periods, the carriers culled schedules to provide better operational reliability, and it seems to have made a difference. Cirium's monthly on-time performance reports showed declines from May through July, but improvements returned with five-percentage-point increases in each August and September.

Regarding fares, overall price value was the only criterium that Delta didn't take the lead on; it was Southwest. Harvey noted that the carrier's "overall price value has always been strong," but with its new Wanna Get Away Plus fare that offers transferability and travel credits not expiring—which several buyers favorably commented on—"that's a big differentiator," he said. "We get huge praise for becoming easer to do business with."

Value is something the other carriers focused on as well, and it's "not 100 percent limited to price," Somers said, listing operational reliability, onboard amenities and taking care of the customer—and not just when there is a disruption. "Those are what we consider value," he said, "and we always have been and want to be competitive based on the relationship with the customers telling us what they need, telling us where we are competitive, and if we're not competitive, we make sure we work with them. I think that probably is one that didn't surprise us, but the reality is we also understand that our planes are full and the demand is strong, and that has affected some value perceptions, and we think those perceptions will change as our seats return to the market."

American in October announced new New Distribution Capability-based agreements with each of the three major global distribution systems, which global head of corporate sales Hank Benedetti said provides the carrier with the "flexibility to offer our best content, products and fares through NDC connections and direct channels."

For United, in August it introduced United for Business Blueprint, its new corporate contracting solution, with "our customer and their travel program at the center," Burse said. "This is a big change from the past, when our corporate contracts focused on the airline and what we wanted. Instead, we start with the customer's program, and then bring the entire airline to them. It's no longer just a conversation about network and fares. It's every ancillary, every program, every type of status, our entire [environmental, social and governance] effort and much more."

Burse added that United then works with the customer to select supportive program elements, and "in time, they'll be able to customize these options down to individual flights, travelers and destinations—and we're the first airline to offer this level of customization in the contracting process."

Network Recovery

The three major airlines in the survey received some of their highest ratings for networks, partnerships and frequencies, despite overall routes and frequencies still below 2019 levels, and even though some carriers have added new destinations to their maps.

"American's network … continues to offer business travelers more choices in more markets than any other airline," Benedetti wrote in an email. "We are focusing on flying where we can create customer value. We also are leveraging our partnerships to create choice and value in areas we can't."

Benedetti noted the carrier's partnership with British Airways offers the "most competitive schedule" for customers traveling between New York and London. He also said American has "oriented our long-haul flying to maintain a robust presence in our stronger markets, particularly in the [Mexico, the Caribbean and Latin America] region.

Burse called out United's "largest ever" schedule across the Atlantic for summer 2022, and upcoming routes between Cape Town and Washington, D.C., and between Dubai and Newark Liberty International Airport, as well as "offering more flights to Australia than any U.S. carrier," she said. United's "white spaces" on its route map are filled in with joint ventures with Air Canada and Lufthansa, All Nippon Airways, Air New Zealand, and recently announced ones with Virgin Australia and Emirates, she added.

This criterium was Southwest's lowest rating, even though it increased from 2021. "Because we added 18 new cities, we doubled Hawaii service, doubled Long Beach service over the last 18 months, I would have expected that to be a little bit stronger an improvement," Harvey said, adding that the company "made a concerted effort, a big bet" in June to bring back a lot of short-haul routes, including in Texas and intra-California. "But it's encouraging, because this time next year, that's a category to keep an eye on, because when our network is fully restored [by the end of 2023], we will bounce back even stronger in that network category."

Communicate, Communicate, Communicate

As with last year's responses, quality of communications continued to be one of the most important categories. Several buyers noted that airlines did a better job this past year than previously providing "excellent," "frequent," "constant," "transparent" and "consistent" communications, as well as engagement, and it's a key aspect they want continued for the next 12 months.

The highest score in the survey (4.54) was for Delta's client communications, which were called out multiple times in the open-ended responses. The carrier "continues to effectively communicate changes" and is "always ahead of the game to inform customers about issues that may impact travelers."

The carrier made it a "top priority" to keep customers informed of "new products, programs and anything around availability and their travelers, because they told us it was critical," Delta VP of sales operations and development Kristen Shovlin said. "When we step back to think about what was transforming and changing in this industry, we brought them into it."

Shovlin gave the example of bringing customers to their new airport facilities at Los Angeles International Airport and John F. Kennedy International Airport "to make sure they had insight into all of it," she said. "[It has been] a big piece around engaging and informing and making them part of all the changes and transitions we've gone through. They're really part of our team."

Buyers also credited United with making it a "priority to be in touch" and to "continuously gauge our travel needs." In addition to its corporate advisory board, United established one for travel agencies in 2022, Burse said. "Strong communication between our sales managers and our customers is the foundation, supported by new tools like personalized websites and videos and growing conversation forums like United for Business LinkedIn and participation in company communication channels like Slack," she said.

Southwest's accolades from buyers included "great" communications and kudos for "updating us on changes and always finding fun ways to push communication down to our employees to help engage."

Benedetti called out American's multiple forms of communication, including its customer town halls and customer and agency portals, and noted the carrier's "improvements we've made through technology to equip our team members and customers to have more control over their travel, like a more intuitive app and self-service enhancements."

Dedicated, Responsive Account Managers

A recurring comment made by buyers was the desire for dedicated account representatives—and the appreciation for those they did have that didn't change "over and over." Delta took top honors for this category as well, but it also was Southwest's highest criterium score, at 4.38.

"That number jumped off" the page and "blew me away," Harvey said. "We’ve been working so hard bringing people into Southwest Business, trying to hire the right fit and sales professionals. But it doesn't surprise me. A lot of travel managers sing the praises of the sales team. You hear it anecdotally, but to see it in the numbers, that had the wow factor."

Harvey added that one strategy Southwest has been intentional about is to drive as much consistency in account management as possible. "We didn't subtract [during the pandemic], we grew, and continued investing in [global distribution system] capability and content and product," he said. "We spend a lot of time developing all our people to become trusted advisors, with a lot of new-hire training and recurrent training."

Delta, too, prioritized training, especially with 30 percent of its sales team new to the carrier or new to the industry, Somers said. "We focused on making sure the sellers were equipped, with thousands of hours of training to make sure they had everything they needed to be knowledgeable about our products and services," he said, adding that they are visible to the customer. "That is not accidental. I want them in the face of customers, being responsive, proactive, and if you're visible, you're there when they need you."

Continued Importance of Sustainability, DE&I Efforts

An ongoing hot topic in the industry is sustainability, and that bore out in the results. Even though it took a slight dip from last year's 57 percent, about 50 percent of respondents said that an airline's sustainability efforts were "critical" or "very important" to the company's partner decision-making. Another quarter said it was "important."

All four of the major U.S. carriers offer programs for corporate customers to help offset the purchase of sustainable aviation fuel. The three largest also announced new SAF purchase commitments in 2022. United agreed to buy 300 million gallons from producer Dimensional Energy, American committed to 500 million gallons from producer Gevo and Delta agreed to purchase 575 million from Gevo—each deal was for multiyear periods of delivery. Southwest invested in SAFFire Renewables to develop and produce scalable SAF.

In addition, United introduced a sustainability dashboard for corporate customers in March, and Southwest included sustainability reports in its Southwest Business Assist corporate portal launched in August, around the same time that Delta made available a new "sustainability on-demand" dashboard for U.S. corporate customers to track their carbon emissions.

"Sustainability and diversity, equity and inclusion are two areas in particular that customers tell us are important to their travel experience and factor heavily in their travel decision-making process," Burse said, adding that sustainability should become a permanent area of interest in future BTN Airline Surveys.

Indeed, DE&I also remains key for buyers when it comes to selecting travel program partners, though, like sustainability, perhaps not as much as last year. Nearly 54 percent said it was "critical" or "very important," versus 62 percent in 2021. Another quarter said it was "important."

Several buyers called out Delta and its efforts in these areas, noting the carrier "allowed us to apply unused ticket credits during the pandemic to a fund to purchase SAF," and it was the first to hire a chief sustainability officer and also has a DE&I officer. "They are leading the way with awards and creating a culture of inclusion is core to making everyone feel safe, valued and wanted," wrote one respondent.

"These are two main areas Delta is driving behind," Shovlin said. "We had an insights meeting with customers and had our chief diversity officer and chief sustainability officer speak to our audience, and that is something that hasn't been done in the past. Both are commitments on behalf of the entire Delta board, but also in the Delta culture overall to make sure we bring the right programs forward."

Copyright 2022 Northstar Travel Media, LLC. All rights reserved. From By Donna M. Airoldi.

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