Getting Everyone On BoardBy John McCormick | Posted 2003-04-01 Email Print
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Before its industry went into a tailspin, Delta Air Lines invested $1.5 billion in an instant information network to serve customers better and save millions of dollars. Will that be enough to make it the last major airline able to attract price-conscious
Delta supervisor Gary Hogard is walking through the Delta terminal at Atlanta's Hartsfield Airport. It's early evening and the rush is on. Travelers hurry through the walkways, jam into the restaurants and bars, and crowd around the gate areas waiting for departing flights.
But at Delta's gates, there are few, if any, queues in front of the agents' desks.
Instead, many passengers stand, trancelike, before big-screen, flat plasma displays. The monitors flash every few seconds. One screen lists passengers, by name, for the flight's standby list; another gives the times various rows will be called to board the plane; a third displays scheduled departure and flight times; another updates weather in the destination city; and yet another tells passengers what snacks will be served onboard. All this information comes into the displays via the Delta Nervous System, which pulls information from Delta's various databases and pushes its onto the gate displays.
Hogard stops to answer a businessman's questions about the effectiveness of the monitors. Not only are gate agents relieved of having to answer routine questions, but passengers' questions are usually answered before they even think to ask them.
"It helps a lot," Hogard says.
The gate displays are a big part of how Delta is using its system to streamline check-in and boarding procedures. The other key components of the effort are self-service kiosks and a sophisticated gate agent system.
Indeed, the difference between flying with a Nervous System and without can be huge, as Baseline found out by traveling through several Delta terminals—including the airline's major hub in Atlanta.
The Nervous System so far is installed in Delta's top 81 airports. On Feb. 6, when rain in Atlanta slowed traffic and created long lines at Hartsfield Airport, Delta processed departing passengers efficiently. Passengers who checked in using kiosks were at their gates in 20 minutes—even including a security checkpoint.
But the experience is far from uniform. On Feb. 3, fog had shut down Chicago's Midway Airport, which is not yet part of the nervous system.
By the time one passenger arrived four hours late on an ATA flight from San Jose, Delta had canceled its flights. A Delta ticket agent sent the passenger on a 45-minute shuttle ride to O'Hare airport—at the passenger's own expense—to try to catch the last Delta flight of the day. At O'Hare, Delta's kiosk could not process her reservation, requiring an agent to take over.
In a busy airport, such as Atlanta, 100 planes might arrive at a peak period, allowing any passenger on any plane to connect to any other plane. This presents 10,000 opportunities to misconnect a person, and another 10,000 opportunities to misconnect a bag. The costs quickly add up. For instance, Delta says the cost of finding a bag and getting it to its owner can cost about $150 per bag.
Getting a plane back into the air is just as complex. Accenture, a consulting company, counts 60 steps before a plane can push off from the gate: weight and balance checks, the loading of food, passengers and bags, etc. Any kind of confusion at the gate about seat assignments or waiting for another plane to arrive with connecting passengers can cost the airline thousands of dollars. One airline analyst estimates the cost of delaying a departure could run as high as $500 a minute.
So it's not surprising that Delta made gates and boarding a foundation of its network of nerves. The effort now will be tested with Song, whose planes are supposed to fly for 13.2 hours per day instead of Delta's traditional 10.7, and to turn around in under 30 minutes.
Delta redesigned its gate and boarding areas with help from about 14 gate agents, who were selected by Song president Selvaggio for their ability to answer passengers' questions cheerfully and competently whether it's 8:00 in the morning or 11:00 at night. Among their contributions: deciding what information is displayed on the big screen, based on most-frequently asked passenger questions.
Their work streamlined preflight passenger procedures to the point where Delta could eliminate two to four agents per gate and get by with just one or two. Those who remain work from a computerized dashboard, called Cornerstone, which shows how many people are boarding a particular flight, where they are coming from, and whether they will arrive on time. Clicking on a passenger's seat number reveals more information, like frequent-flier status.
This year Delta is extending its nerve network, doubling its kiosks to 800 and adding telephones that connect directly to Delta's reservation center for more complex ticket requests. Ticketing agents will be replaced in part by "lobby assist agents" to encourage customers to use the technology, and "service excellence coordinators" to help resolve problems. Airports vary, but, as an example, in a terminal that might have had 25 counter agents, Delta could possibly get by with eight agents and one lobby assistant.
Delta also computerized baggage-processing. Delta bag handlers attach scannable tags to bags, and their destinations show up on screens on the airfield tugs that the handlers drive, allowing them to figure out the fastest route to distribute a load of bags to various aircraft.
One of Delta's biggest challenges in building its Nervous System, according to senior vice president Mike Childress, was to get all the business units to agree on what a piece of data means and how important it is compared to other pieces.
If flight data is coming in from both the aircraft and the local air traffic control, which piece takes precedence? If the aircraft is broadcasting incomplete data, are the missing pieces important?
"We'd retrench, go through the logs, dig through everything, figure it out, sit back down with the business units and say, 'Okay, here's what happened. Is there a better rule we could come up with?' That is the heavy lifting," Childress says.
But just how successful a data-relay system will be in helping Song remains to be seen. For example, the gate displays go down on occasion—Hogard estimates about one outage per month. He says he's not told why the screens go blank. But, he says, technicians usually get the units back online in relatively short order.
If a screen is down for a Delta flight, the company can just add extra personnel to get the plane boarded. However, an inactive screen could be a bigger problem for Song. With the upstart's quick turnaround goals, anything that slows the boarding process could cause a delay that creates a major ripple in its schedule.
Savings come from baggage, ticket and gate procedures.
Baggage: It costs Delta $150 to track a lost bag and return it to its owner. Delta mishandled baggage 3.57 times per thousand customers in 2002, compared to 4.11 times in 2001. The improvement resulted in a savings last year of $8.7 million attributable to the Nervous System.
Check-in: Staff can be cut by two-thirds. A hub-and-spoke airline such as Delta may run two shifts. An airline employs about 25 check-in agents per shift. Each counter person makes approximately $40,000 for a total cost in yearly salaries of $2 million per airport. In a terminal served by the Nervous System, a single ticket agent at a kiosk station can check in three people at once, reducing the number of counter agents by two-thirds.
Instead of 50 people for two shifts, Delta would need only 16 or 17—with total salaries for these positions between $640,000 and $680,000 per airport. That's a savings of between $1.32 million and $1.36 million per location. At its 81 airports with the system, Delta could see a total savings of between $107 million and $110 million a year.
Gates: Without the nervous system, each active gate required three to five agents; now Delta can try to get by with one. If each gate agent makes $40,000 per year, and Delta cuts two to four agents per gate, that's a savings of $4 million to $6 million. Delta's main terminals have an average of 50 gates. With 81 airports affected, Delta could save anywhere from $324 million to $486 million a year.