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John Selvaggio, President, Delta’s Song

Mar 1, 2004
2004 / March 2004

Q: Low-cost cousins to major carriers seem to be the wave of the future. Please comment on that phenomenon. Where/why did it start? Where is it going? Will the low-cost cousins eventually replace full-service carriers? Why or why not?

A: As you know, major carriers have a problem-their costs have skyrocketed.When combined with the growth of low-cost carriers, the majors are forced to find new ways of doing business. That’s a major reason why Delta started Song. Song combines both new opportunities-a leisure product-with a considerable cost savings-23 percent that of a Delta mainline 757.

While Song is a vital part of Delta’s product portfolio, there is still a need to continue to develop and improve the hub and spoke system which is the heart and soul of Delta. Different
customers have different needs and different market demographics require different product configurations. In the end, there is room and a need for all of the different services that the majors and low-cost carriers provide.

Q: Some industry commentators have suggested the hub and spoke system as we’ve come to know it may be on its way out. Their theory is that consumers want to get where they’re going with as few as possible-and preferably no-intermediate stops. Low-cost carriers like Song appear to be responding to that theory. Is that an accurate observation? Why or why not?

A: That question attempts to simplify what is a very complex industry.Again, different customers have different needs and different market demographics require different product
configurations. The diversity of our network is one of Delta’s core strengths. Customers and markets are different across our system, so we’ve developed a portfolio of businesses to
accommodate the many situations we encounter. For instance, to serve small markets,we offer Regional Jet service with Delta Connection Inc.Now, to effectively serve and compete in price-driven, high-density markets,we’ll be able to employ the low-fare subsidiary where it makes sense to do so.

Q: Taking a look at the Song Web site, it appears you’re making a serious effort to involve consumers in the decision-making process by actively soliciting consumer feedback. How’s that going? Are consumers responding? Cite a few examples of consumer feedback and what impact it may have had on marketing and/or operations.

A: I’m glad that our attempts are clear.We are definitely trying to get consumers involved; in fact, our product was developed through a series of focus groups with our target customer. As you mentioned,we have a number of ways to gather customer feedback. I have to say,however, that our most effective way to do that is to listen to our people.With the help of employees,we’ve updated our onboard service, including our menu and our refreshments,and we continue to monitor
their feedback and look for ways to improve the experience.

Q: Song has certainly made an investment in its in-flight entertainment system. In fact, it may be so cutting-edge that technophobes (like me) aren’t entirely sure what’s available and how to access it. Explain “live, all-digital satellite television.“Does that mean passengers can change channels at will while watching real-time broadcasts?

A: The system is so cool. Right now,we have 16 of our 36 planes completed.The final ones will be completed by April. This first phase of installation includes live television just like
what you’d see in your living room,24 channels of radio programming from hip hop to jazz or Disney tunes and an interactive music trivia game that lets you compete with fellow passengers. Digital means that your sound and picture quality are better than what’s available out there today. Touch screen literally means that you are the driver. There are no control units on the seat, you just point with your finger and touch your TV screen in front of you.

Starting in April,we’ll start Phase II of our technology installation, which will in clude video on demand, MP3 and 10 more video games. To be clear, the video on demand is very different-
more like Tivo.You can start it and stop it at your convenience. Don’t want to miss part of the movie while you hit the restroom? Pause the movie. And, the MP3s allow you to create your very
own music play list while onboard.

Q: Entertainment-Part II. Multiplayer interactive games? How does that work? And what does it cost?

A: This is cool.The game offerings have not been totally finalized yet so I’ll use the music trivia game to explain. While in your seat, you can compete against other passengers onboard. If you answer more quickly, you get more points. Then, between each question, the system will show how you are doing versus the other players onboard the aircraft. The music trivia is free. The 10 additional games will most likely be around $2 for the entire flight. That has not been confirmed yet.

Q: It’s no secret that in-flight food service has become a hot-button issue. An initial move by airlines to eliminate or reduce in-flight food service has been followed by an effort to market pay-per-meals. Song is among the carriers now touting “gourmet food selections” at a price.Have you sampled Song’s in-flight food selections? What’s your favorite menu option?

A: You’re joking, right? I have been in the kitchen with our consulting chef,Michel Nischan. Plus, I do lunch once per month with our product managers’ new creations so that I know exactly what we are offering customers. I don’t have a favorite option,but I do like the wraps, and grilled vegetable lavash onboard this month is unique and delicious.And, I’m trying to avoid the new Dylan’s Candy Bar selections because I hear that they are addictive.

Q: Finally, as a 30-year veteran of the airline industry, you’ve seen fads, trends,whatever you want to call them,come and go. In your opinion,why does Song have staying power?

A: If you had asked me that a few years ago, I would have predicted the creation of low-fare carriers by the majors. For the near term, this will continue.We all need to find significant ways to change the way we do business in order to survive. Song has staying power for a number of reasons. It’s a product that represents what customers want, it’s efficient and highly productive and it continues to look at ways to change.That will be critical for us; we must continue to evolve the product year after year.

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FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

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