Delta Airlines Essay

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EXECUTIVE SUMMARY

This report provides an examinaion of the current structure, performance, stragergy and management of Delta Airlines, along with an industry analysis of the airline industry. The report uses current and past financial and statistical data for the company along with other up to date material to determine Delta's current market position and future potential.

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
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The Northwest brand is gradually being phased out and being replaced by Delta's name and brand. During the integration period, Delta and Northwest will continue to operate their own branded aircraft until the integration process is complete. This has given delta a combined market share of approximately 18% (Gayle, 2008)

Effects of Market Structure

In the United States there are generally two types of airlines: "legacy carriers," which are defined as airlines that specifically operated interstate routes prior to the Airline Deregulation Act of 1978, and "low cost" airlines that compete solely on the basis of offering the lowest price per ticket within the market in which they are operating

Market conduct

Market structure can be defined as patterns of behaviour by enterprises in an effort to adjust to the markets in which they operate (buy or sell). Pricing strategies and collusive behaviour mergers are a few dimensions of market conduct. It is the industry norm for a legacy carrier to offer service to most popular destinations; Delta reducing routes to a similar schedule as the low-cost airlines is not an option in the multi-billion dollar industry. In order to gain market share from low-cost airlines, Delta must create a value proposition that differentiates itself from its competitors. Many customers will pay a premium if the level of service provided is higher than the low-cost, no-frills

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