Honolulu-headquartered discount travel retailer Cheap Tickets Inc. has formed a strategic alliance with Delta Air Lines that will place more of Delta's fares and destinations into Cheap Tickets' system.
Cheap Tickets formsBy Russ Lynch
partnership with Delta
As part of the deal, Delta was given warrants enabling it to buy up to 7 percent of Cheap Tickets' stock if the relationship works as hoped, Cheap Tickets said.
Sam Galeotos, president and CEO of Cheap Tickets, said the deal does not give Delta any advantage over other airlines that sell seats through his company but it "allows us to have a larger stable of discounted product available for our customers."
For Delta, it is an opportunity to bring more value to travelers, said Lee Macenczak, the airline's senior vice president, sales and distribution.
Galeotos sees the deal as a validation of the Cheap Tickets model, which sells travel on the Internet, through telephone centers and retail offices across the country. "Our premise, as everybody knows, is to try to deliver the lowest fare to our customer, the consumer," he said.
Galeotos said Cheap Tickets has been talking to a number of airlines and it is possible they might lead to similar deals.
He said both parties agreed not to disclose the terms and conditions of the stock-purchase warrants that Delta now has with the retailer.
The arrangement with Delta is not a response to the recent launch of Orbitz, the Internet airline-booking system owned by a number of major airlines, including Delta, he said.
"But it brings up an important point about a lot of people bringing up Orbitz to be the be-all and end-all and here you have one of the founding fathers of Orbitz joining up with Cheap Tickets," Galeotos said.
Cheap Tickets sells unused seat inventory held by more than 30 airlines at fares that are heavily discounted as departure time nears.
But the majority of its business now is commission sales of tickets at posted fares and other travel services, such as hotel rooms, rental cars and cruises.