but....we have the stock market
Delta will close Hub center, cut 353 jobs
Airline aims to push more to book online
By Keith Reed, Globe Staff | February 4, 2005
Delta Air Lines plans to close its Boston reservations call center Sept. 1, a move that will eliminate about 353 positions.
The airline, which next month will move into the newly renovated Terminal A at Logan International Airport, notified workers at the East Boston center of the closing this week, said Benet J. Wilson, a spokeswoman for the Atlanta airline.
Delta is closing a similar reservations center in Los Angeles at the same time, Wilson said, eliminating a total of 750 telephone sales jobs at both centers. All of the workers will be offered other positions with the airline, she said, although it is too soon to tell how many will accept other jobs or whether those jobs would require them to move. Delta will keep open nine other call centers around the country.
Coming off of four straight years of heavy losses, airlines are trying to push customers away from booking over the telephone or in ticket offices, which cost carriers more because they have to pay workers to staff them.
Darryl Jenkins, an airline consultant and a professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla., said airlines have been somewhat successful in getting passengers to book online, but they still have a long way to go.
"They are more successful than they were five years ago," he said. "There'll be a time when most of the bookings will be done directly with the airlines, and they're certainly pushing the online fares the most."
To encourage more passengers to book online, many airlines, including Delta, have started to impose fees on tickets booked over the phone. Delta began charging $5 for telephone bookings in December. American Airlines, US Airways, and United Airlines have similar fees. Continental Airlines has begun allowing travelers to pay with personal checks when booking flights on its website, or to ask the carrier to bill them.
"Airlines continue to search for ways to reduce their distribution costs," said Mark Cestari, vice president of marketing at SmarterTravel.com, a Boston website that tracks travel trends.
Some airlines are also tacking on a fee if passengers request a paper ticket, as opposed to an electronic ticket sent by e-mail. Some carriers are considering doing away with paper tickets completely, he added.
Delta posted a $5.2 billion loss in 2004, one of eight major airlines that, combined, lost more than $9 billion last year. The airline's decision to close its reservation call centers is part of its plan to cut annual operating costs by $5 billion by 2006.
Saying the airline needed drastic changes to become profitable and to avoid bankruptcy, Delta chief executive Gerald Grinstein laid out a cost-cutting plan in September. Under the plan, Delta closed its hub at Dallas-Fort Worth International Airport in January, cutting hundreds of daily flights.
All Delta workers, including Grinstein and other senior executives, took a 10 percent pay cut effective Jan. 1, and after months of contentious negotiations the pilots union agreed in December to $1 billion in salary and benefit givebacks.