Delta Air Lines’ presence in Japan increased significantly after the airline acquired Northwest Airlines in late 2008. Since then, Delta has made a major investment in its products and services and “keeps climbing,” as its ad campaign says.
Jeff Bernier oversees sales and affairs for the airline in the Asia Pacific region. Born in Minnesota, Bernier got a degree in economics from university. He joined Northwest Airlines as an intern in 1994 and was assigned to Japan in January of 1997. It was supposed to be a 6-month assignment, he recalls.
Japan Today editor Chris Betros visits Bernier at the Delta offices in Toranomon to hear more.
How would you describe Delta’s image in Japan?
We are a premium brand airline. Our image and brand are very positive. However, I believe there is significant opportunity to spread the word. Our brand is improving and a lot of that is coming from our $2 billion investment in our product and services, airport facilities, technology and our people. Our customers are telling us we are going in the positive direction and Fortune magazine had us as the most admired airline in the world. Plus, we have won numerous other awards in the past year. That tells us we are on the right path.
How do you market the airline in Japan?
We primarily focus on outdoor billboards, newspapers, joint tie-ups and online media as well for advertising. Social media is a new marketing paradigm and it is growing. Additionally, we utilize sponsorship opportunities, including Japanese professional golfer Hiroyuki Fujita and MLB Japan to promote Delta’s awareness. In the U.S., we have several Delta accounts on Twitter and Facebook to disseminate information and communicate with customers.
How did the March 11 disaster affect business?
We did see a downturn in traffic but we never left Narita. We made sure that our employees, their families and our customers were safe and that they got in and out of Japan, if they so wish. We were basically back up to full operation within 48 hours.
We did suspend the Haneda-Detroit service, which will resume to daily service on April 27. Other than that, we were able to quickly recover. A large part of the reason was because we have restructured our company to be able to quickly react to situations that are outside our control. Part of that relates to adjusting capacity and having capacity discipline.
How many flights in and out of Japan does Delta currently operate?
We have currently 296 flights per week from four cities in Japan. We fly to nine gateways in the U.S. out of Narita, and operate two flights to the U.S. out of Haneda, plus one out of Nagoya and one out of Kansai. We also operate Guam, Saipan, Honolulu, Palau and 8 Asia cities out of Narita. Out of Kansai, we operate flights to Guam, Honolulu. From Fukuoka, we fly to Honolulu, From Nagoya, we fly to Honolulu, Guam and Manila. We are the largest carrier to Japan from the U.S.
Our load factors roughly run 80-85%, which is pretty good.
Have the Haneda flights been popular?
Business travellers have given us very positive feedback about the times at Haneda. Our LA flight leaves just after midnight, which is convenient if you want to get in a full day’s work at either end.
What would you say are Delta’s strong points?
First, our robust network combined with our Sky Team partners. Next, we have a premium product. We have invested a lot in it – flat bed seats, Economy Comfort, new international terminals in Atlanta and New York, as well as refurbished Sky Club lounges. A third strong point is our Sky Miles loyalty program. And our 4th asset and most important is our people. We have a great Delta culture.
Are there any unique characteristics in the Japanese travel industry?
International ticketing in Japan is dominated by the indirect channels—travel agencies. There is still a significant amount of group and package travel. We have a very strong relationship with the travel agencies and they play an important role in the distribution of tickets.
What about online sales?
They are continuing to grow. In Japan, it is still small, maybe 5-10% of total reservations. In the U.S., that figure would probably be over 50%.
Is there a demand for first class?
We don’t have first class on international flights, but we do have a first-class product and service in our Business Elite, which offers a fully flat bed with aisle access for all seats, 5 selections of dinner course, Master Sommelier’s wine selection, etc. Domestically in the U.S., Delta offers more first class seats than any other airline.
Why don’t you include the fuel surcharge in the advertised fare?
Delta continues to differentiate the fuel surcharge from the ticket price because we think it is very important to cover the cost of the increase in fuel. Consumers, while they may not like it, actually understand it. When you put the fuel surcharge in the advertised fare, they’ll say ticket prices are too high.
How will low cost carriers (LCCs) affect the industry in Japan?
It will bring in more competition and competition is good. LCCs will make the short-haul market more competitive. Certainly, Delta, as a global premier airline, is not afraid of competition because we have a very competitive cost model and offer the best value proposition.
However, I think the LCCs may have a tough time in Japan because there is no such thing as a low cost airport here. Until the government revamps the overall structure of airports, being fair to all carriers, LCCs will struggle. They also don’t offer the overall comprehensive package such as connections and networks overseas, best-in-class service and mileage programs.
What are some issues that foreign airlines still have to deal with in Japan?
Landing fees, which are among the highest in the world. Add to that parking fees, fuel facility charges, user and rental lounge fees. Access and infrastructure to, from and between Narita, Haneda and Tokyo can be quite challenging at times. However, Delta is doing its part by working with key constituents and advocating for improved policies. I am vice president on the board for the American Chamber of Commerce (ACCJ) and we advocate for numerous tourism initiatives that would benefit the general travelling public.
What is your management style?
I’m very flexible on what needs my support. If something is up and running, then I delegate. Where we have to take things to the next level or we are having challenges, then I am very hands on so that I can understand the challenges and help the team resolve them. I try to get out and meet our customers as much as possible. If we take care of our customers, they will take care of us.
Is Delta a popular airline for job seekers in Japan?
We do get a lot of applications, thousands actually, from people who want to work for Delta globally. So that is very gratifying. Right now, we have about 1,200 employees in Japan.
How does Delta get feedback from customers?
We have a customer care center and we conduct surveys to see how we are performing. We always want to know what we did well and what we could do better.
What corporate social responsibility (CSR) activities is Delta involved in?
We partake in activities such as promoting breast cancer awareness, Habitat for Humanity and Run for the Cure. After the March 11 disaster, Delta donated $1 million in cash and in-kind support to disaster relief efforts in Japan through the Japanese Red Cross Society and our SkyWish partners. I personally support Hands-On Tokyo and I am a board member of TELL (Tokyo English Life Line). There are several other organizations and activities that our Delta employees support on a regular basis. It is important to be a part of the community.
What is a typical day for you?
I wake up at 5 and get on my Blackberry and computer. Two or three days a week, I will work out at the gym from 6:30 a.m. to 8:30 a.m. If I am not traveling, I get to the office at around 9 a.m. There will be conference calls, staff meetings or I go out and meet customers. I often have events at night and other community activities.
How do you spend your leisure time?
I play in a basketball club and I coach a Japanese youth baseball team. This winter I took my family skiing in Fukushima to Grand Echo. It was so gratifying when the locals told me that they appreciate the donation of goods but what they really want is for people to go and spend time there. That was truly heartwarming.