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Company Using Airline Snacks as the Basis of New, Multimillion-Dollar Sales Ploy : Marketing: Peanuts are packaged with products that people can sample while passing the time at 35,000 feet.

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From Associated Press

Nuts and nibbles on airlines, those mundane diversions to tedious travel, are being taken to new heights by an upstart firm that is turning airline snacks into a multimillion-dollar marketing ploy.

In a concept akin to the prize in a Cracker Jack box, those packets of nuts, pretzels and snack bars are attracting high-tech and big-buck interest.

It’s a marketing strategy initiated by DelysAir Ltd., a Reno company still in its infancy, that targets a “captive audience” strapped in their seats at 35,000 feet with lots of time to kill.

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To the competitive airline industry, the concept presents the potential for significant cost savings.

The idea is unique yet simple. A company underwrites the cost of the snack and in return, gets to distribute samples of its product.

“Let’s face it. When you are on a plane you are usually bored,” said Elisabeth Galvin, vice president of DelysAir. “Virtually everyone receiving a free snack is going to open the package, and spend some time examining the sponsor’s materials.”

The company, which she operates with her attorney husband, John, emerged as an offshoot in an effort to sell to airlines the French praline peanuts made at the couple’s small candy factory.

While other means of advertising--direct mailings, newspapers or magazines--often receive a cursory glance before being tossed in the trash, airline passengers generally have nothing else to do and so are more apt to take notice, she said.

CompuServe, the global on-line computer service, was the first company to test high-flying advertising in June.

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It distributed 100,000 software computer disks offering free trial service, which were included in a promotional packet with a bag of trail mix and handed out to passengers on Reno Air flights from San Jose, Reno and Las Vegas.

CompuServe spokeswoman Debra Young called the campaign “wildly successful.”

“We’ve signed up a few thousand users so far, but expect several thousand more from this particular promotion,” she said.

“It’s hard for us to measure further, though, because we have to track those passengers and see how many retain the on-line service,” she added. Nonetheless, the company plans to do it again.

America Online, another computer on-line service, is currently underwriting the campaign.

“It’s another way that we’re putting the software in the hands of business travelers,” said America Online saleswoman Margaret Ryan.

“We’ve only been doing this for about a month. But early results look very promising. We’re always looking for innovative ways to reach potential subscribers.”

Reno Air spokeswoman Sue Putnam said the promotional approach to airline snacks seems to delight passengers.

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Those teeny snack packs cost the airline about 21 cents per passenger, Putnam said.

DelysAir’s alternative is to offer airlines a choice of snacks from a 32-item menu. The company links up sponsors to underwrite the cost and packages the promotional materials along with the snacks in one neat little packet that is handed out by flight attendants at no cost to airlines.

DelysAir provided one-third of the snacks during its first month in June, saving Reno Air about $21,000, she said, adding that Reno Air hopes to turn over full snack provision operations to the company by November.

Based on average monthly passenger counts of 3,000, the anticipated savings total $63,000 monthly--or an estimated $756,000 a year.

“It’s amazing when you can save close to a million dollars,” Putnam said. “That’s excellent.”

Computer industries are not the only ones considering the marketing strategy. Car manufacturers, long-distance carriers and credit card services are among others negotiating with DelysAir to sponsor airline snack packs, Galvin said.

Two other airlines, Continental and United Shuttle, are scheduled to begin snack-pack sponsor promotions this fall, she said. The company is also discussing similar arrangements with more than a dozen other airlines.

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For DelysAir, the marketing concept holds promise for skyrocketing profits.

The company anticipates gross income this year of $5.3 million. Based on interest generated by both airlines and sponsors, Mrs. Galvin estimated that the company will distribute some 200 million promotional snack packs in 1996, pushing anticipated gross earnings to $54 million.

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