Delta tries to lure business travelers with travel credits

Can Delta woo business travelers with its on-time arrival record?

Can Delta woo business travelers with its on-time arrival record?  (Reuters)

Delta Air Lines hopes to woo new business travelers by promising better on-time service than the competition.

The carrier is pledging travel credits to corporate clients if its on-time arrival rate falls below American and United.

According to a report from the U.S. Department of Transportation, 83.7 percent of Delta’s mainline flights in 2014 were on time. The government defines flights as on time if they’re within 15 minutes of their scheduled arrival. American—which includes both American and US Airways flights—had an average on-time arrival rate of 77.9 percent while United came in at 76 percent.

The move allows Delta to capitalize on its operational success, rather than focus on upgrades or pricing models other airlines could offer.

“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 present of global sales, in an interview with Bloomberg.

The airline has made major strides in its on-time performance in the past five years. In 2010, Delta ranked 15th in on-time arrivals. Today, it's in third place behind smaller carriers Hawaiian and Alaska.

So what happens if Delta slips behind United and American this year? 

The airline would have to mete out award credits worth $1,000 to $250,000 to a business client depending on the scale of their contract. Companies with Delta travelers on the road who faced the most significant delays or cancelations would be awarded the biggest pay outs.

But experts warn that the program is more of a marketing ploy than a real promise. Delta has built-in contingencies that make it hard for some to cash in rewards. Delta must trail behind both airlines—not just one competitor—for business clients to be awarded the credits. The offer excludes delays on international flights and regional affiliates which typically have problematic records, Barry Rogers, a corporate travel adviser in Eugene, Oregon, with TCG Consulting, told Bloomberg.

Also, the program lasts for a full calendar year which means, one-time, albeit significant, travel hiccups won’t mean anything if Delta maintains its overall record.

Still, American and United don't offer anything like it for business contracts, which may help Delta continue to separate itself from the competition.