Weaknesses The airline industry is extremely competitive and there are constant struggles to maintain a low-cost fare that can compete with other companies such as JetBlue and Southwest. This has proven to detract from Delta’s success throughout the years due to continuous attempts at market strategy and low-fare subsidiaries. Delta had a bankruptcy scare in 2005 and made a filing with the U.S. bankruptcy court for Chapter 11 bankruptcy. The plan for Delta was to continue with its normal operations while simultaneously undergoing corporate restructuring. At the time, Delta had approximately $20.5 billion in debt, mainly as a result of record-breaking fuel prices and high labor costs (“Delta Air Lines - Plan of Reorganization").
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There are many different factors that come into play regarding the airline industry. Airlines such as Delta operate in an extremely political environment that requires an abundance of government regulation, especially after incidents like 9/11. As shown in Appendix A, the state of the economy, such as changes in GDP, per capital income, disposable income, and industrial production can also drastically impact the Airline Industry (Teresa Cederholm). In order to remain competitive in the airline industry, companies such as Delta must adopt the latest technology. For a full PESTEL analysis, refer to Appendix …show more content…
Delta became the only airline to own and control its reservations system, which is key to operations. In 2014, Bastian stated “We have also moved toward vertical integration (and better management of fuel costs) by acquiring an oil refinery—a decision that shocked both aviation and oil industry observers” (Anderson, Richard H). Rather than be controlled by producers, Delta took matters into its own hands and gained full control over its supply chain. Over the past few years, Delta managed to expand its oil team to include several crude traders and the former president of Total Gas & Power North America (Anderson, Richard H). These innovative changes have allowed Delta’s average cost of fuel per gallon to remain five to 10 cents less than the industry’s for over two years now. Appendix B illustrates Delta’s road to redemption in greater
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.
While Frontier and Delta are both popular choices of airlines for Americans, Delta has become more of a household name because of their friendlier service, more comfortable cabins, and their limited extras fees. Frontier airline still is a worthy competitor by being cheaper, but they also have many added on fees for things that are free with Delta. Overall, Delta knows how to take better care of their customers and make sure everyone is satisfied.
The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).
in revenue passenger-kilometers flown with 277.6 billion. In 2015 their revenue was up $40.704 billion, operating income was up $9.520 billion, and net income of $926 million. Delta’s total assets were down in 2015 with $53.134 billion. Total equity was up with $10.85 billion. The results that we will be discussing will include the RPM, ASM, and Load Factor from May 2015 and May 2016. The results will show the year to date traffic results and the monthly traffic results change.
Delta has been focusing on technological innovations but they need to keep on doing that to be profitable.
American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.
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.
Delta “focuses on shifting their cost structure from fixed to variable costs as much as possible.” (https://rctom.hbs.org/submission/delta-airlines-flying-high-in-a-competitive-industry/) Delta also understands the importance the importance of delivering top notch customer service to appeal to their principal demographic, business travelers. They have incorporated a training work-shop so employees have a better understanding of how to solve travel disruptions that customers deal with. Employees also learn how to help insure that baggage performance is up to par with a low amount of mishandled bags reports from customers. Delta has done this by incorporating a way for customers to track their bags using a mobile app. In the Business Travel News Delta has been ranked #1 by corporate flyers for four years in a row. I believe the business level strategies that Delta has incorporated have been a good choice for their business. Their strategies have helped them to gain a competitive advantage from customer service and great operating cost flexibility.
According to delta.com, Delta Air Lines began in 1924 as a crop dusting operation and has since then grown into one of the world’s largest airline competitors. With it’s social and environmental dedication, Delta prides itself on the service of it’s community and family. Being one of the world’s largest global competitors in the airline industry, Delta has made great strides but not without it’s share of setbacks.
From the humble financial portfolio as a crop dusting outfit in the mid twentieth century, to the multi-billion dollar portfolio of a major airline in the twenty first century, Delta Air Lines has risen as a successful business. The airline industry is directly affected by outside economic conditions and is also cyclical in nature. These factors make it very difficult for airlines to make predictions to stay financially afloat. Delta has ridden the bumpy path of the last twenty years and managed to survive. In the past twenty years there has been many events that
2. Why have all of the low-cost subsidiaries of full-service airlines, including Delta Express, failed?
Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and
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.
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.