Delta Airlines Essay

5864 words - 24 pages


Delta Air Lines: The Latin America
Contact Center Decision


In early September 2000, Mary Smith, Delta Air Lines’ Regional Director of Reservations for Latin
America and the Caribbean, glanced over her notes one more time. Delta had decided to consolidate all
of its reservations offices in Latin America into a single Latin America Contact Center. Now it was up
to her to recommend a country location for this $3–4 million investment. Gail Childs, her immediate
supervisor and General Manager for International Reservations, would want her report soon in order to
get the final go-ahead from Delta’s CEO. Although a number of countries were possible options, Mary
...view middle of the document...

S. Hispanic market.3


As companies sought to move their customer service operations offshore, governments in developing countries sought to attract these investments as a way to diversify their economies and create
employment opportunities for their people.4 Much of this investment was in shared services. This
referred to the consolidation of identical services performed in different offices or branches or one
company, such as sales and technical support, accounting, human resources (e.g., payroll), billing, etc.,
into one location. The trend was for companies with multiple offices in different countries to consolidate these services in one regional office as a way to reduce costs and provide consistency in customer
service. This sort of consolidation of services could take different forms. For example, as in the case of
Delta Air Lines, a company might have all of its reservation calls from customers in a given region


“Latin America Company: Call Centres Gain in Popularity,” EIU Regional Economic News, The Economist
Intelligence Unit, June 4, 2003.
Andrew Thompson, “Answering the Call,” Latin Trade, January 1, 2003.
Brendon B. Read, “Locating Call Centers Closer to Home,” Call Center Magazine, September, 2002.
By 2003, the customer service industry worldwide was producing revenue of over USD $200 billion per year,
and Latin America alone had over 100,000 call center workers (see Thompson, “Answering the Call”).
Copyright © 2004 Thunderbird, The Garvin School of International Management. All rights reserved. This case was
prepared by Professor Roy C. Nelson for the purpose of classroom discussion only, and not to indicate either effective or
ineffective management.

channeled through one call center. Over time—although Delta Air Lines itself had no plan to do this—
the same company might consolidate its internal operations, such as payroll services from multiple
offices, into one regional office.
Some countries even offered special training subsidies for workers, or other incentives in order to
lure shared services and call center investment. Nevertheless, the main factors companies considered
when making this type of investment were the quality of the telecommunications infrastructure, labor
costs, local labor laws, language capabilities, and any problems with regional dialects or accents. They
also considered other factors that were relevant whenever companies invested abroad: political and
economic stability and the security of their employees.

The Need for the Latin America Contact Center



Delta already had a number of reservations centers in Latin America. The company had acquired its
Mexico office in 1987, after it took over Western Airlines’ Mexico operations in a merger. This had been
Delta’s only office for reservations and sales in Latin America until 1998, when the company began to
open reservation centers in other Latin American countries. In 1998, Delta began a...

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