Delta Airlines' initiative to revitalise airline traffic towards New-York

Delta Airlines' initiative to revitalise airline traffic towards
New-York

U.S. hotel industry strains to make a recovery after the attacks of September 11, 2001

Internet on board aircraft: a $1 billion market forecast for 2006

To encourage and revitalise travel to New York, Delta Airlines just launched a large promotional operation: 10,000 tickets to New York given away!

On this occasion, Delta went into partnership with Crowne Plaza and Intercontinental Hotels and resorts, to be able to offer hotel accommodation to the winners along with the plane tickets.

The campaign, which is called Delta loves NY started on October 2, 2001 and will last six months.

The operation will be carried out through different types of media: email, radio…

Even though the cost of the operation might seem rather high at first, you should still be aware that New York is a key element in Delta Airline activity: 202 daily departures to 71 cities in 13 countries.

What is more, from a business point of view, this initiative could prove profitable. Delta loves NY at a time when never before have so many American flags been sold, could indeed result in positioning the company even better in the heart of the Americans.

And finally, we can imagine that it is also a matter of filling the empty seats for one and the empty rooms for the others: all in all, a very clever operation to counter this difficult time.

Source : Delta.com/nyc

Six weeks after the attacks of September 11, U.S. hotel industry seems to make a slow recovery with revenues down about 16 percent from their usual levels. Analysts think that U.S. hotel revenues should be round 15% lower than their usual levels for the rest of the year.

Please remember that, according to Smith Travel Research, hotel revenues went down 37% in the week after the attacks.

And yet, the attacks of September 11 are not the only explanation of the decline in room occupancy that is presently being noticed. Indeed, hotel reservations were already down 5% before the attacks and analysts expected this phenomenon to increase to finally reach 7 or even 10% between August and the end of the year.

This would mean that the "direct" impact held by the attacks of September 11 would be between 5 and 7% and no more.

To illustrate this theory, Hilton Hotels just published its third-quarter results: the company's net income was $21 million, compared to $68 million a year ago, which represents a…68% drop!

As for Hilton's third-quarter revenue, it fell 18%, from $867 million in third-quarter 2000 to $711 million in third-quarter 2001.

After Internet service offered in the hotels, we can wonder what the future holds for this Internet service onboard aircraft when the airline industry is currently facing other difficulties, far more serious…

Besides, 12 airlines that were committed to equipping 2,100 of their aircraft with Internet service just decided to postpone this investment after the attacks of September 11, 2001.

And yet, things are bound to get back to normal some day and the question is whether or not this type of service will manage to attract a certain type of customers on board aircraft equipped with this service, but also what kind of additional revenue can be expected from it.

The Northern Sky Research company just published a report on the subject and selected three forecast scenarios of growth for this type of service between now and 2007.

The average scenario, presented below, indicates that airlines might expect to get additional revenues of $4 billion from this Internet service between now and 2007.

Figures expressed in million dollars:

- 2002: $35
- 2003: $210
- 2004: $487
- 2005: $803
- 2006: $1.118
- 2007: $1.414

It looks as if there really is a market for this type of service.

But what remains to be seen is how much it would cost to equip the aircraft, the maintenance and upkeep costs (not to mention its reliability, key element of success) but also whether or not users will accept to pay the price of the service.

Source : Northern Sky Research