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Delta Airlines Shifts Ad Work to In-House

May 29, 2003

ATLANTA (AP) _ In another cost-cutting move, Delta Air Lines is shifting much of its advertising and marketing services to an in-house team.

The carrier said Wednesday that a sister agency of Leo Burnett USA, which has been Delta’s primary advertising firm since 1999, will continue handling all media-buying responsibilities.

Leo Burnett, responsible for ad campaigns including Delta’s ``New York, New York″ commercials, will assist in the transition.

In addition to the media-buying by Starcom Worldwide, Delta said it will employ another outside agency, BrightHouse LLC, for ``selective advertising and branding projects.″

``Leo Burnett has been a fine partner. This change is about finding cost efficiencies within our organization,″ said Vicki Escarra, Delta’s chief marketing officer. ``We have recently expanded our marketing group to support the advertising and communications programs, which Leo Burnett helped establish over the last 3 1/2 years.″

Nina Abnee, group account director at Leo Burnett, said the agency understands ``the pressures that Delta continues to face in this environment″ and would work toward a smooth transition in coming months.

Delta, the nation’s No. 3 airline behind American and United, lost $1.3 billion last year and $466 million in the first quarter this year because of a downturn in the travel industry. It has laid off 16,000 employees since the Sept. 11, 2001, terror attacks and is seeking concessions from its 9,000 pilots.

Delta shares fell $1.15, or more than 8 percent, to $12.88 on the New York Stock Exchange Wednesday after the carrier announced it was raising $300 million through a private bond offering. The bonds can be converted into Delta common stock, which could decrease the value of existing shares.

Delta may offer another $50 million of the bonds, depending on demand.


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