Delta Airlines Weaknesses

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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
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