Delta Air Lines doesn’t want to be just an airline anymore.
It also envisions itself as a retailer, selling extra services for flights through a virtual cash register at your airplane seat and a digital storefront when you book a flight on the airline's website.
What's more, the carrier sees a big opportunity to sell advertising targeting the captive audience of travelers on planes.
For passengers, that could mean an onslaught of sales pitches and advertising throughout the travel experience.
For Delta, it's literally a billion-dollar opportunity, with higher margins than the sale of flights themselves. The airline is working toward getting $1 billion from these extra sales by 2013. It's well on its way, with around $600 million in revenue already coming in from sources such as its new premium economy section launched this year at $19 to $99 per seat for domestic flights, in-flight Wi-Fi fees of $4.95 to $12.95 per flight, sales of preferred seats and upgrades.
Meanwhile, Delta said it expects to post an $800 million profit this year, or $1.1 billion excluding special items. And the airline expects to be solidly profitable in 2012.
"There are a lot of ways to make money beyond the basic sale of a seat between two points," Tim Mapes, Delta's senior vice president of marketing, said during Delta's investor day Wednesday.
With more than 1 million visitors to Delta.com daily, it's "our storefront to the world," Mapes said. Better technology is allowing Delta to increase the types of things it can sell online, at the airport and on flights.
"Historically, we have seemed to be singularly focused on selling airline tickets, and forgetting that we can sell customers other things," said Glen Hauenstein, Delta's executive vice president of revenue management, marketing and network planning. "We've been starving, and sitting on a ham sandwich the whole time."
Mapes acknowledged that the airlines' imposition of baggage fees was "hostile" to customers. Delta hopes to evolve from just imposing new fees for what once was free -- checked baggage and meals -- toward selling improved services such as premium economy seats and eventually selling customized or bundled offerings. For example, passengers could buy things like food, in-flight Wi-Fi, priority boarding and other services by checking off boxes while booking a flight on Delta's website.
How passengers will respond to the full evolution is yet to be seen.
Meanwhile, Delta also hopes to turn its customers into a substantial source of advertising revenue on its website, mobile apps or in-flight entertainment.
It's "an enormously attractive demographic to advertisers," Mapes said. He said Delta is considering "how we can function as an advertising network."
The airline is seeking additional revenue even as it shrinks its flight schedule. Delta plans to trim its flight capacity by 2 to 3 percent next year, and expects to continue reducing its workforce through methods such as buyouts and attrition, according to Chief Executive Richard Anderson.
Southwest Airlines, which is taking over AirTran Airways and entering Atlanta, is exiting some of the smaller cities AirTran served from Atlanta, which "opened up a lot of opportunity" for Delta, Hauenstein said. But that may be offset by the new markets Southwest is entering, he added. Hauenstein also said Southwest has been "less aggressive" in discounting than AirTran was -- which he said was a positive for Delta.