Delta's Competition

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.

What makes Delta airlines unique is their participation within charitable groups. The employees at Delta Airlines list as one of the top donors of blood to the American Red Cross (Delta, 2016). The employees of Delta also partnered up with a Humanitarian group to help build homes for families as well as volunteered their time through community sponsored events that Delta has had. United way has also been funded by Delta (Delta, 2016). These are just some of the charitable things that Delta has contributed to. Their client base it simple; meaning there client based is for anyone who chooses to use their services. They have a variety of options for their customers when purchasing tickets such as flying economy class, business class and or first class. Each class comes with a certain advantage such as flying first class, you have more seat space and along with accelerated check in and baggage handling. Delta Airlines like others have many competitors. One of their main competitors who is trying to thrive within the industry is

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

| Weakness * The number of cancelling flights is a little high * The customer service is bad because in some occasion the customer can’t found the delta representative in the airport. * Lack of online presence * In some aircrafts the seats are uncomfortable and narrow

Delta airlines offer very comprehensive products and services including, Baggage services, check-in,ecertificate programs, In-flight services, pet care, and services for a person with special needs.

The Risk of Entry by Potential Competitors – Since the deregulation of the airline industry in 1978 over 1,300 new airlines have opened for business. However, most now are bankrupt or merged with the other carriers to stay workable. The established giants were Delta (merged with Northwest), American Airlines (merged with U.S. Airways), United Airlines (merged with Continental), and now Alaska Airlines (merged with Virgin America). Now the Low-Cost Carriers (LCCs) are posing a massive threat which includes Southwest Airlines (merged with Air Tran), and JetBlue.

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.

"The weakness is that they're looked at as the role model and they have had some weaker competitors over the years, mainly American and United. And the concern is that American and United, as they improve their own operations, they will put pressure on Delta, and potentially Delta could lose certain business travelers, so market share loss to some of these players on the corporate side."

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.

2. Why have all of the low-cost subsidiaries of full-service airlines, including Delta Express, failed?

As with all airlines, Delta’s recent performance has been significantly impacted by industry shifts and external events. Terrorist attacks and escalating costs have significantly impacted Delta’s profitability in recent history (Rivkin 4). The company has also been losing valuable market share to the low-cost carrier Southwest Airlines throughout the southeast and specifically in the lucrative Florida market (Rivkin 8). JetBlue also began encroaching on key Delta routes, and this seems only likely to increase (Rivkin 9). Despite this, Delta has still performed better than any other legacy carrier (Rivkin 8). Still, recent history has brought several changes to this legacy carrier, and the company has turned its attention towards new competitive strategies.

The years since regulation have been rocky for the airline industry. Airline after airline has declared bankruptcy and either ceased existence or emerged as a weaker airline. The surviving airlines have done so by merging and protecting their territory with tactics not even dreamed of in most industries. Robert Crandall said it best when he noted, "This is a nasty, rotten business (Petzinger,1995)." You would think that with the competition allowed by deregulation that a large number of new names would exist, but that does not seem to be the case. Most Americans still travel on American, Delta, United, US Airways, or Continental (Kane, 2003). The only true champion of deregulation is Southwest Airlines, whose success is paving the way for others such as JetBlue, but the obstacles are enormous. Initially, the airlines went after each other by slashing fares and driving competitors out of business. The industry quickly learned that although this tactic was effective, it was not profitable, and it was more economical to focus on controlling the air out of a few cities (hubs) than to attempt to directly compete in every single market. Since most of the major airlines already had key cities in which they controlled most of the takeoff and landing slots, airlines could charge higher fares and take in greater profits without any real head to head