The Conversation
now, whereas Europeans take more time so we’ve had to slow down and nurture markets.” He continues, “The JV is more than just a contract signed between airlines and CEOs, it’s the working relationships that operate between the sales teams and yeald management teams.” Cantarutti was appointed with the express brief
to oversee the day-to-day relationship and growth opportunities for Delta’s complex joint venture agreement with Air France-KLM. He is responsible for all Delta’s EMEA commercial activities and took the reins from the combined efforts of Atlanta-based Glen Hauenstein and London-based Frank Jahangir. The combined Delta/Northwest airline (called Delta) is now reaping the financial benefits of the 2008 merger with its US counterpart. “2010 was an amazing year,” says Cantarutti. “Demand came back in the spring and we posted US$1.4billion annual profits, the biggest in the company history. We put it down to the strong transatlantic business and the benefits of the Delta/Northwest merger.” Synergies from that deal have generated annual incremental revenues of US$1.5billion and Delta foresees that figure rising to US$2billion, “mostly from an enhanced revenue from a larger network and purchasing synergies. It’s taken two full years for that to come through.” The final piece of the jigsaw was centralising the two airline’s reservations systems, completed in early 2010. Moreover, on February 14 this year, the 80,000
Delta workforce each received 6.5 per cent of their annual salary, on average, the first profit- sharing payout since 1999 and all as a result of the airline’s strengthened financial status. Delta’s results underscore why consolidation is the best survival strategy in today’s airline economics. “We’re a capital- intensive business and we’re a proponent of consolidation. A stable industry is good for the customer,” says Cantarutti. He’s convinced that Delta’s results on the Atlantic wouldn’t have been as strong without their airline partners. ”It gives us access to a richer mix of customers,” he says. Its larger network has other advantages. During the ash cloud crisis, for example, Delta put on extra flights to help KLM, and when protests in Cairo erupted it was able to help out there too and meet the swell of demand. The moves have propelled Delta from a largely domestic carrier five years ago to centre stage as an international airline today. “It’s been an amazing change of company complexion and I’m really optimistic about where we’re at,” says Cantarutti bullishly. “We’ve got the hard work of our merger behind us.” Nevertheless, consumers are concerned that airline consolidation will lead to less choice and less convenient scheduling.
Has it in Delta’s case? Delta finally made it into Heathrow in 2008 and this summer it will offer ten daily US flights to six American cities, adding Boston and Miami for the first time, “so that’s more choice,” asserts Cantarutti. Schedules have changed, such as on Amsterdam-Atlanta where flights within ten minutes of each other have changed to an am and pm service instead. Corporates have one number to call to contact the sales team of Delta and Air France-KLM. They offer one contract and one incentive plan to leverage everything. The work still continues, however, to wring as
much out of the deal as possible. The frequent flyer programme alignment is largely done and the sales approach is being aligned but the big hurdle ahead is aligning the product. “You don’t want to get onto an Air France fight
" It’s been an amazing change of company complexion and I’m really optimistic about where we’re at"
and have a hamburger and watch a Dutch movie so you have to take the best of both,” says Cantarutti. There will be mandatory product elements but even these have yet to be decided. ”Do we always have a cheese course? How many movie changes will there be? And so on in order to use our fleet interchangeably. “There was not much appreciation of what the challenges were,” he admits. Outwardly, Cantarutti believes there is still a job to be done getting customers to understand that Delta is a very different airline today. That effort to change customer perception began in March when Delta launched a big TV splash to promote its new fully-flat business class seat in BusinessElite which coincided with the start of the London-Boston route. Some US$2billion has been spent in the upgrading of the cabin, to give everyone direct access to the aisle in a 1-2-1 configuration, more privacy and luxury items such as feather duvets. It will be fleet-wide in 2013. Another push will kick off in June when the airline launches Economy Comfort cabins. Work also continues to harmonise standards among SkyTeam alliance members. Wifi is already common to all Sky Club lounges and the food offering has been updated and widened. There are some anomalies still, such as the new blueprint for lounges only
completed in five US airports to date. Generally, US airports have priority although, arguably, the Sky Club at Heathrow T4 is right up there. In spring 2012 a new international terminal will
open in Atlanta and Delta will have priority use of six of the 12 new gates, plus access to the remaining gates (28 in total). This should improve passenger flow but the big change will come when it relocates to T4 at JFK in May 2013. More major decisions will surely follow if Delta
is to keep ahead of the dynamic airline business but for the moment at least, bigger is definitely proving to be better.
PERRY CANTARUTTI SENIOR VICE PRESIDENT EMEA, DELTA AIRLINES
Perry Cantarutti was promoted to the newly created position of senior vice president of EMEA in March 2010. Based in Paris, Cantarutti has accountability for all of Delta’s EMEA commercial activities, including maximising the long-term growth opportunities for Delta’s joint venture agreement with Air France KLM – the industry’s largest trans-Atlantic alliance. Prior to this Cantarutti held the position of vice president of reservation sales and customer care at Delta Air Lines, having held a similar position, vice president of reservations sales and services, for Northwest Airlines since May 2006. He was responsible for the management of the airline’s 11 North America offi ces and nine overseas offi ces as well as customer care.
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