Delta bundles its extras to help raise revenue

  • Article by: KELLY YAMANOUCHI , Atlanta Journal-Constitution
  • Updated: December 27, 2012 - 8:43 PM

Wi-Fi, priority boarding and bonus frequent flier miles are among goodies the airline offers.

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The options sold on Delta’s website are available on flights out of 37 airports, with more airports likely to be added over time.

Photo: David Paul Morris, Bloomberg

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As airlines over the years cut back in-flight service amid economic uncertainty, many travelers became resigned to the idea that they'll get a seat on the plane and nothing more.

Now carriers are looking for even more ways to boost revenue, and one tactic is the sale of bundled extra services.

Atlanta-based Delta Air Lines in 2012 quietly launched two bundle options -- a "Lift" package for $34 that offers priority boarding and an extra 1,000 frequent flier miles, and an "Ascend" package for $19 that includes priority boarding and a 24-hour Wi-Fi pass.

Delta executives have compared the move to the options when buying a new car or getting a car wash.

Executive Vice President Glen Hauenstein said the airline wants to allow customers to "control not just their transportation, but their experience" and is packaging extras to add value.

"We are just at our infancy of how many other products we can sell," he said.

Other airlines also sell bundles of extra services -- such as Southwest's Business Select fare and American's new Choice Essential and Choice Plus fares.

The options sold on Delta's website are available on flights out of 37 airports, and the company hopes to offer them more broadly across domestic flights over time. The Ascend package is only available if all legs of the flight are on planes equipped with Wi-Fi.

Each package costs $4 less than what Delta charges to buy the extra services a la carte. Delta is also adding the ability to book the bundles and extras through mobile apps as it adds the ability to book flights via mobile.

Chris McGinnis, editor of the Ticket, a traveler newsletter, said likely targets for the bundles are business travelers who don't have elite status with Delta.

"They're very willing to pay for Wi-Fi, and if by doing so in a package helps get a little discount off the price, then, yeah, I think they would probably do that," McGinnis said.

Priority boarding may be important to those who need space in overhead bins, said Atmosphere Research Group co-founder Henry Harteveldt.

Harteveldt and McGinnis said they don't see these extras as "nickel-and-diming," because they include services that are new or weren't previously included in the fare.

The packages follow Delta's introduction in 2011 of an "economy comfort" option for $80 to $160, including more legroom and some other extras.

Delta's recent overhaul of its website, which generated some complaints from customers, is aimed at enabling sales of more products and "seat packages," Delta Chief Executive Richard Anderson said at the company's recent investor day.

"Airlines are all looking at this," Harteveldt said. "They're trying to really let the passenger buy what they value. Ultimately you end up having a better trip if these things are important to you."

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