6 Secrets of Delta's On-Time Gains

ATLANTA (TheStreet) -- For Delta(DAL) , a 2008 merger with Northwest helped ensure its place among the world's leading airlines.

Unfortunately, it was accompanied by a sharp drop in performance.

Delta efficiency fell off after a merger with Northwest, and the airline worked hard to restore its ontime performance.

Before the merger, "both airlines were doing fairly well," says Dave Holtz, vice president of operations control and a 32-year Delta veteran. But complications ensued due to "the complexity of the networks and putting everything together. No matter which way you go with the process, there's a lot of training associated with the new policies of an airline."

Holtz worked with a task force, formed in the summer of 2009, to fix the problems. Full-year 2011 airline operating statistics, scheduled to be released by the U.S. Department of Transportation on Tuesday, are expected to show the effort is succeeding.

Regulators approved Delta's acquisition of Northwest in October 2008. The two airlines merged certificates Dec. 31, 2009, formally becoming a single airline.

In 2010, DOT stats indicate, Delta didn't do so well. The carrier ranked 15th out of 18 carriers in on-time performance. It had the most customer complaints, just as it did in 2009, and ranked 10th-highest in percentage of mishandled bags.

The improvement in 2011 was comprehensive, largely because, for a hub carrier, being consistently on time solves the vast majority of measurable consumer problems. In on-time performance last year, Delta ranked fifth out of 16 carriers and first among the five major network carriers including Continental. It ranked 11th-worst among 16 airlines for customer complaints, but ahead of all of its peers. It ranked fifth lowest in percentage of mishandled bags.

Among the landmarks on the path to improvement, in 2011 Delta became the first legacy carrier since since 1987, when the DOT began to compile operating statistics, to report two consecutive months with a mishandled bag rate below two per 1,000.

Here are six steps that led to Delta's ascension to be No. 1 in operations in 2011.

Carefully script departures
In May, Delta officially introduced minute-by-minute scripting for each of its 2,300 daily departures. The scripting covers everything that must occur for an on-time departure. It begins 90 minutes in advance, at which point most airplanes have not even reached the airport. The goal, as it is at every airline, is not A-14 (an arrival within 14 minutes of the scheduled time, the metric the DOT measures) but D-Zero, (departure at or before the scheduled time).

The script includes everything from how aircraft are unloaded, such as which bags come off first and how they are delivered to connecting flights, to how many minutes before departure customers begin to board.

"We script departures to the minute," Holtz says. "We script fueling, baggage, loading freight and mail, everything. We take scripting to a whole new level. We know that at 30 minutes, if we haven't done a certain piece of it, another piece will suffer."

"The big thing is that we are moving connecting customers between cities," he says. "If we can have D-Zero departures, then we have time for connectivity to work well. A lot of times, we have just 30 to 35 minutes to make connections in the hubs."

Update technology
Delta has moved to upgrade various technologies. At the Atlanta airport, which serves about 30% of all Delta flights, the carrier spent $120 million in 2009 to upgrade its baggage and tracking systems, enabling the use of scanners.

The carrier has also improved its communication with passengers through their smartphones, vastly increasing airport efficiencies. Last month, PCWorld magazine named Delta the leading "Tech-Friendly U.S. Airline." Delta, it says, has moved to provide airport recharging stations, in-flight Wi-Fi and smartphone apps with baggage tracking and airport check-in, as well as 24-hour customer service on Twitter.

More than 3 million people downloaded the Delta app last year. In November, Delta became the first airline to offer baggage tracking through its app, spokesman Anthony Black says, and now 5,000 customers a day check the movement of their baggage, which is either a tribute to the value of technology or one more sign we have too much of it.

Delay some flights on purpose
One thing passengers hate is when a plane lands at an airport, only to be forced to wait on the tarmac until a gate becomes available.

Airlines don't like this either. Having airplanes sitting on the tarmac in space that other airplanes might want to use is an impediment. "We want ground flow moving effortlessly," Holtz says.

So at times, Delta tries to slow things down. "Where we have extraordinary winds, we hold the plane at the gate or board it late," Holtz says. "Also, if the winds are acting differently than we expected and the plane from Los Angeles is arriving ... 20 to 30 minutes early, we work with air traffic control to slow it down en route."

Delta also works with air traffic control to carefully manage the airspace over its hubs. "A lot of work is done to sequence airplanes, both arrivals and departures," Holtz says. "We talk to one another. ATC has a much better ability than we do to manage close-in flights. They may see a flight from Savannah that should slow down and wait, and maybe it is better to wait in Savannah."

Manage check-in
Getting airplanes boarded in acceptable time windows is a challenge for all airlines. A key, of course, is to start on time -- that is to say, 30 minutes in advance for certain aircraft, not 28 or 29 minutes.

One Delta improvement was the 2010 introduction of an online auction for passengers willing to give up seats if a flight was overbooked, Black says. When passengers check in at Delta.com or airport kiosks for flights that are potentially overbooked, they are asked to bid for the right to transfer to a later flight and be compensated.

"That enables the agent to bypass the announcement that a flight is oversold," Black says, as well as the associated work of trying to sort out passengers willing to wait. Instead, bids are already in the gate computer and agents can easily select passengers willing to be bumped.

Open more maintenance stations
Over the past two years, Delta opened nine remote maintenance stations to complement its maintenance base in Atlanta. In 2010, maintenance stations opened in Memphis, Newark, Philadelphia, Phoenix and San Diego. Last year stations opened in Miami; Portland, Ore.; Sao Paulo; and Santiago, Chile.

The stations enable maintenance on airplanes that spend the night at a particular airport as well as a method to more quickly address when an airplane needs a part. In Miami, for instance, "we had hangar availability" as well as access to a skilled maintenance community, Holtz says. Delta route planners work carefully to ensure planes requiring maintenance are scheduled to overnight in Miami.

Add roving airport agents
At Delta, "redcoats" are special senior customer service agents charged with roaming the airport in key cities -- wielding high-powered handheld computers to change tickets -- to solve problems. Once again, the goal is to speed up the process at ticket counters and gates.

In a cost-saving measure early in the decade, Delta eliminated redcoats, but it brought them back in 2008 and, in 2009, began to add cities, including the former Northwest hubs. It now has redcoats in about three dozen cities.

Delta has 23,000 airport agents, including about 850 redcoats.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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>To contact the writer of this article, click here: Ted Reed