Delta offers to pay out for flights running late

Delta Air Lines. Photo / AFP

Basking in an on-time rate that beats rivals, Delta Air Lines promises to pay up if it can't get road warriors to their destinations more reliably than American and United.

Delta is pitching a new programme to its corporate clients that will award travel credits to those accounts if the carrier falls behind its two biggest rivals in on-time arrival and flight completion rates.

The initiative is novel in an industry where airfare discounts and flight selection - not reliability - typically win corporate travel buyers. It's also a move by the airline to capitalise on operational successes to woo customers by convincing them that Delta's punctuality will save them time and money.

"We've been focused on relentless operational success, because any carrier could replicate anything we do, whether it be seats or food or Sky Clubs, but they can't replicate our performance," said Bob Somers, vice-president present of global sales.

For a long time, no one wanted to. In 2010, two years after merging with Northwest Airlines, Delta was 15th in on-time arrivals among 18 US airlines. Delta jumped 10 spots in 2011 and now is in third place - ahead of American Airlines Group, United Continental Holdings and Southwest Airlines and behind only the non-global carriers Hawaiian, a unit of Hawaiian Holdings, and Alaska.

Delta's mainline flights were on-schedule 83.7 per cent of the time in the 12 months through December, data shows.

If American and United beat Delta's on-time and completion rates for a year, Delta would award travel credits of US$1000 ($1590) to US$250,000 to businesses with a contract. Those who suffer the most delays and cancellations get the biggest payouts.

There are enough caveats, however, that it's unlikely Delta will have to pony up, said Barry Rogers, a corporate travel adviser.

By measuring on-time or cancellation rates over a full year, it can't be held accountable for short-term hiccups. The offer also excludes international flights, the regional affiliates, which have spottier reliability records, and industry leaders Alaska Airlines and Hawaiian Airlines. Delta also must trail both American and United - not one or the other - and United has been mostly stuck in the bottom half of US carriers in recent years.

A few airlines have given a reliability guarantee "lip service", Rogers said, but no one else has moved forward.

Big companies have many considerations to weigh when making corporate travel decisions, and discounts on airfare are huge motivators, said Brad Seitz, a corporate travel consultant.

Some businesses can command half off pricey last-minute fares. Still, Delta's on-time guarantee is generating some buzz, he said.

"Now they're saying, 'Does this mean anything or is it just a marketing ploy?'" Seitz said.

On time

• Delta's mainline flights on-schedule 83.7% of the time.

• Airline jumped 10 spots in 2011 and is now in third place.

• Carrier will award travel credits to corporate clients if it falls behind rivals American Airlines and United Continental.

- Bloomberg