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Delta Airlines Strengths And Weaknesses

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Q3 - OE_Strengths
What do you see as Delta’s particular strengths?
"It's the free cash flow. Looking at it from a financial perspective. They're a leader in their industry. They have high corporate customer participation. The corporate customer is the profitable customer for them, and they have a good share of that market. They've got strong free cash flow generation. They've got their debt under control. They're good stewards of capital in terms of really protecting the shareholder and they're not capricious with their spending on capital and new aircraft and that kind of thing."
Q4 - OE_Weaknesses
What do you see as Delta’s particular weaknesses?
"They can control only a certain amount of their destiny. They're good at controlling what they can control. But the industry, there's a perception that it's a highly cyclical industry and people in this industry don't have the best capital management skills. They overspend going into a downturn. And they can't control the consumer demand a lot of time. They can't control what happens in the world. But consolidation in the industry has helped quite a bit and the division of slots at the airports. And ownership of certain hubs allows for a better industry structure."
Q6 - OE_StrategyElements
Based on
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In some respects they're comparing themselves to Home Depot because Frank Blake was on the Board of Home Depot and now he's on the Board of Delta. He's the champion for taking free cash flow and increasing the dividend, and this growth in the dividend and shareholder buybacks is the template that Home Depot kind of did for a long time here. And now he's trying to implement this from the Board at Delta. Home Depot would be one. You could throw out one of the better industrial company. People also talk about the railroads as well, and basically the consolidation in the industry. There's a corollary to the airlines as to the railroad
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