Case Study : Delta Air Lines

Delta Airlines in a major American airline company headquartered in Atlanta, Georgia, United States. The company was founded on May 30, 1924. They operate as an extensive domestic and international network. Delta currently operates a fleet of more than 700 aircraft and they employ approximately 80,000 people. In 2011 they were the world’s largest airline in terms of fleet size. Delta Airlines is a very successful company. Part of what makes them so successful is expansion, making good decisions in route selection and hubs location, being service oriented, having a strong operation management, being reactive in terms of prices, and offering low fares.

Delta airline uses merger so as to be able to expend its business. In 2008 the company merged with Northwest airlines. It operates in Europe, North America and Asia/Pacific regions. Once the merger was complete, Northwest Airlines and all its constituents become wholly-owned by Delta Airlines. The merger saw to it that Delta Airlines started operating in the Northwest for FY 2008. In the period of two month that is from October of 2008 the time the merger was completed to December of 2008, the company had increased it revenues to $2 billion. Having a flexible nature, allows Delta to improve customer services, and in the long run be able to achieve its strategic objectives.

Delta Airlines initially started out as a very small crop dusting operation named Huff Daland Dusters in 1942 (Delta, 2016). Today, Delta has become one of the largest global airlines with serving more than 160 million travelers each year (Delta, 2016). Delta airlines provide both domestic and international flights to customers to 318 destinations over a span of six continents. They also have nine domestic hubs and three international hubs (Delta, 2016).

This podcast interview I choose to listen to focused on Southwest airlines and its founder, Herb Kellener. In 1966, a lawyer based in San Antonio Texas, named Herb Kellener, heard from one of his clients about a small airline based in California. He met his client for a drink and the two of them decided to use the same business plan in Texas utilizing the cities of Houston, Dallas, and San Antonio. Kellener knew nothing about airlines when he began his venture however saw an untapped industry and wanted to take a risk. The idea of this new airline was to get away from the traditional way airlines normally run by cutting down on unnecessary frills so that everyday people could afford to airline travel. Southwest met competition at its creation from local Texas airlines and it took over 4 years for Southwest airlines to eventually take flight. Southwest was even sued and had to take the case to the U.S. Supreme Court. However, Southwest Airlines and Kellener persisted and Southwest has been profitable for

Delta Airlines is the largest airline carrier on the Atlantic Coast. In terms of scheduled passengers carried they were world’s largest airline with 277.6 billion in 2013. Also the second largest

Delta airlines currently owned 621 fleets and leased 179 aircrafts serving around the world including 334 destinations,107 international, 227 domestic by the year 2015. Furthermore, it has nearly 80,000 employees around the world.The annual revenue of Delta airlines 37.773 billion by 2013.

With over eight hundred aircrafts, over one hundred seventy million customers each year, and flights to over fifty-seven countries, Delta Airlines has proven to be a large and powerful global company. Delta Airlines began in 1924 as Huff Daland Dusters, which was a crop-dusting and mail service operation and the first commercial agricultural flying company in existence. C.E. Woolman purchased Huff Daland Dusters in 1928 and changed the name to Delta Air Service. The company then had its first passenger flight the following year, which carried five passengers and one pilot. After four years of suspension of passenger flights, they resumed in 1934 and renamed the company once again to Delta Airlines. Delta started building their reputation as a socially conscious company when they took part in the war effort in 1942, by modifying their aircraft and training army pilots and mechanics.

The report finds that Delta Airlines has successfully emerged from its bankruptcy in 2005 to report successful returns in both 2007 and 2008. With its 2008 acquisition of Northwest Airlines Delta became the world's largest airline, further improving its position in the airline industry. Despite this current positive position report also finds potential adversities

Delta Airlines has a long history within the aviation industry. Delta Airlines started as a crop dusting operation, Huff Daland Dusters, out of Macon, Georgia in 1924. In 1925 Huff Daland Duster’s headquarters moved to Monroe, Louisiana to lengthen their reach from Florida, Arkansas, California, and Mexico. At this time, Huff Daland Dusters operated eighteen aircraft, making them the largest privately owned fleet in the world. In 1928 C.E. Woolman, founded Delta Air Lines and bought Huff Daland Dusters. Woolman renamed them to Delta Air Services for the Mississippi Delta region. In 1929, Delta Airlines operated their first ever passenger carrying flight from Dallas, Texas to Jackson, Mississippi. In 1941, Delta Air Lines moved from Monroe,

As the new century unfolded, Delta Air Lines continued exponential growth becoming one of the largest airlines in the country. A merger with Western Airlines in 1987, the acquisition of Pan Am’s transatlantic routes in 1991, and a final merger with Northwest Airlines in 2008 meant Delta now had routes all over the world. Delta like many other airlines faced very difficult times post 9/11 and during the recession. The airline made significant cost improvements across its operation and the merger with Northwest Airlines ended up pushing the airline back into profitable business.

One of the successes of Delta is that the company understood one critical aspect that it needed to visit. In 1999-2000, Delta’s Technical Operations saw, “1) compliance system breakdowns 2) configuration control confusion 3) multiple independent information systems 4) individual at-risk behaviors, and 5) resource limitations”(efforts to make an SMS operation). Delta understood that it needed to create a system to reduce the frequency and severity of these events of occurring in their business. That being said, Delta is ranked second and fifth, respectively, in safety with a, “0.17 fatalities per million miles travelled and in an infinitesimal incidents percentage slightly higher than Southwest’s (0.0000386).” (traveltips.usatoday**) Their success could stem from their strong core values: honesty, integrity, respect, perseverance, and servant leadership.

This paper will review the case study of Delta Airlines which was suffering like all its competitors with rising fuel costs which averaged anywhere between 30 to 50 percent of its total operating costs. This paper will answer six questions which will help identify what the company did to handle the high cost of fuel. The questions that I will answer will include the following.

Through similar mergers in the 1980s and 1990s, Delta extended its reach into trans-continental and international markets (Rivkin 7-8). According to its stated position today,

Delta Air Lines, Inc. (Delta) is an air carrier that provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company offered customers service to destinations with Delta and Delta Connection carrier service to 321 destinations in 58 countries in January 2008. To Latin America and the Caribbean, Delta offered more than 500 weekly flights to 63 destinations in January 2008. It is a founding member of SkyTeam, a global airline alliance that provides customers with worldwide

The Delta Beverage Group is a bottling and canning company from the United States. Delta had some very strong brand names, like Pepsi and Mountain Dew, included in their franchises. Around 1988, a price war occurred and Delta suffered from compressed margins. About a year later situation became critical and a new management team from was hired. The new management stopped the fall in prices, the decline in market share and increased margins by changing the cost structure. Delta also acquired some other bottling companies at the same time increasing their sales and operating cash flow. After a couple of years operating profits increased by almost 100% and net income made a solid upward progress.