Delta axes offshore call center; Two deals remain in force

Copyright 2004 The Atlanta Journal-Constitution

BYLINE: RUSSELL GRANTHAM

Delta Air Lines is dropping one of three offshoring contractors that supply call center services overseas.

Meanwhile, it's also been asking some of its best customers if they'll pay extra to talk to an agent in the United States.

Delta said Wednesday it ended a contract this week with Tampa-based Sykes Enterprises to operate a call center in Bangalore, India.

The financially troubled Atlanta airline said it will continue to outsource customers' calls to two other contractors in India.

The overseas centers handle about 4 percent of Delta's annual call volume, according to the airline.

Delta spokeswoman Emily Wharton said the move had no connection to an e-mail survey sent to some frequent fliers. One question asked about their willingness to pay for U.S.-based agents.

"Delta has no intention to charge for [reservation] calls at this time," said Wharton.

She said the survey was routine.

"We continually do customer surveys," said Wharton. "Since this survey was around reservations, we simply posed the question."

She said the survey was "absolutely unrelated" to the decision for Sykes and Delta to part ways.

At 5 p.m. Tuesday, Delta switched calls that were previously routed to Sykes' center to three other Indian call centers operated by Daksh in New Delhi, and by Wipro-Spectramind in Mumbai and Pune, said Wharton.

The contractors handle Delta's customer calls about lost baggage, frequent flier mailings and promotions, and "select reservation functions," said Wharton.She declined to comment on why the contract with Sykes ended.

Sykes issued a statement saying "both parties mutually agreed to dissolve the customer support program." The company said it got about $600,000 per quarter from its Delta business.

Delta hired Sykes and Wipro in late 2002 initially to operate call centers in both India and the Philippines, but later dropped plans for Sykes' Philippines center because of security concerns, wrote Marcia Robinson and Ravi Kalakota in their book, "Offshore Outsourcing: Business Models, ROI and Best Practices."

The authors said Delta hoped to save $26 million in 2003 by shiftingcalls to India, where English-speaking employees cost about $40,000 less annually.

Delta expanded to three contractors in India last year.

Wharton said Delta currently estimates that it will save $25 million annually by contracting with the Indian call centers.

The Atlanta Journal-Constitution: July 29, 2004 Thursday Home Edition

SECTION: Business; Pg. 1D LENGTH: 422 words