Delta Case Study

...

What really grew Delta, and continues to grow Delta, is mergers. The first merger was of Chicago and Southern in 1952 (Century of Flight: Delta Airlines, n.d.) . There was a partial merger of Northwest in 1972 that was completed in full integration in 2010 (Press Kit, 2011). Delta continued growth by continuing to be a first-mover in the airline industry. They were the first to fly living plants in 1940, first to use jets and offer a coach/economy service in 1959, first transatlantic passenger flight in 1978, first to use international coding in 1993, and more. In 1981, Delta began their frequent flyer program which became Sky miles in 1995 (Press Kit, 2011). After some financial losses in the late 80’s, profitability returned in 1994 (Press Kit, 2011). In 2000, the SkyTeam alliance between AeroMexico, Air France, and Korean Air began (Press Kit, 2011). Delta suffered another financial loss after 9/11 due to closing of air space. With the expansion of technology, the opportunity to be a first mover rose again. Delta offered kiosks for check-in, expanded gate information systems, and virtual check-in online in 2002. In September of 2005, the corporation filed for bankruptcy and recovered through expansion. The bankruptcy caused many pay cuts and loss of benefits for employees. They responded in 2008 by offering 15% of stock to employees. In 2009, rebranding with a revised widget logo began. In 2010 they announced a two billion expansion plan through 2013 (Press Kit, 2011). All of these expansions and first-mover action is what keeps Delta a strong growing company.

Interview

After performing an interview on a pilot for Delta Airlines, we were able to find out quite a lot concerning management and how the operations actually work. Daniel had a lot of good things to say about working for Delta. One thing he kept mentioning is the upbeat atmosphere. Being a pilot, he is always in a different place, different plane, and working with different Delta teammates. Recently, the airline’s management has made some significant changes. Although Daniel has only been a pilot for about six years, it is a lot of experience for a pilot. The organization recently purchased an oil refinery. The company’s annual fuel expense is around $12 billion. Daniel also said they have also increased plane size to increase passenger capacity. One Daniel’s favorite things about working for Delta, is the excellent treatment. Being a pilot the airline must give him hotel and food expense when staying in a different city. He said that wherever he is he always receives great treatment and respect from all of the airlines branches. Daniel also talked about how management stresses friendliness and confidence while on the job. The Delta pilots usually stay at the front of the plane and greet the passengers as they board. For many people, these couple seconds of interaction with the pilot are very important. Delta’s customers want to feel safe and secure. A pilot has a very stressful job holding the lives of so many people in their hands. However, Delta does a great job at accommodating to this and adjusting to each employee’s specific needs. Being a pilot, Daniel is not working with a specific group of people at all times. He likes this aspect of the job because he gets to get to know so many different people and he does not have to be with the same people for hours on end every day.

SWOT Analysis

The SWOT analysis is a very beneficial process for any type of organization to perform. It allows the positive and negative aspects of an industry to be compared and future plans to be decided. This is very important for Delta due to the capacity of their services and influence on the market.

Strengths

• World’s largest mega carrier

• Innovative business strategies

o Modernized approaches (i.e. purchasing tickets on Facebook)

• Acquisition of Western Airlines and Northwest Airlines

• SkyTeam Alliance

• Industry-leading airport model (lobby re-design, self-service kiosks)

• Experienced organization

• Has one of the leading amount of airplanes

Weaknesses

• Capacity cuts (20% capacity reduction)

• Employee (2,000 job cuts)

• Low on-time rating

• Air transportation safety

• Operational costs

• Susceptibility to labor-related disruptions (employee strikes)

• Technology dependence for operations

• Differentiation

• Customer service

Opportunities

• Online Market

• New services and technology

• International expansion

• Emerging Markets

• SkyMiles (No expiration)

• Reduce operational costs

• Improving stock price

• Investing in private oil rigs

Threats

• Bad economy

• Intense competition

• Government regulations

o CO2 Emissions

• Political risk

• Health and Terrorist Crises (i.e. Ebola & ISIS)

• Unionized Labor Strikes (17% of workforce is unionized)

• Profit losses and adverse publicity from any aircraft accidents

Business Level Strategy

Delta is a common name among airlines. But why is that? Delta Airline has become today what they are known for because of the strategies they have formed throughout the years. The strategy, which best describes Delta using the definition from the textbook, Fundamentals of Management, would be the differentiation strategy. They seek to distinguish themselves from all of their competitors. Here are a few strategies they have used and are still using today.

The new generation

...