Airlines Strategy Analysis
A CASE STUDY OF DELTA AIRLINES
Creative Media Services
Research Team: Todd Beals, Matt Tucker, Mary Vick 12/02/03
Mission – to be an air carrier with superior customer service that provides air transportation for passengers and cargo, utilizing low-cost carriers and regional jets throughout the United States and around the world.
SWOT ANALYSIS
Strengths: 1. 3rd largest mega carrier; established name; excellent reputation; worldwide brand recognition. Delta has been among the DOT’s top three in on-time, baggage handling, and customer satisfaction for the past three years. Delta’s new CEO, Grinstein, has an excellent reputation of resolving labor disputes. 2. Delta has continued to use innovative strategic business moves: a. Recently announced a new low-fare subsidiary airline servicing the East coast called Song, which has met its’ goal to push unit costs below 8 cents per seatmile, a standard industry measure. b. Joining with other major airlines in the industry to form a global alliance called, SkyTeam. The SkyTeam alliance results in cost savings by sharing cargo and passenger terminal facilities, integrating frequent-flyer programs, consolidating sales, maintenance and administrative operation, combining information technologies, and engaging in joint procurement where feasible (Corridore, 2003, p. 7). c. In early 2000, Delta acquired Comair, whose entire fleet consists of regional jets, and Atlantic southeast Airlines (ASA). The additional use of regional jets helps move Delta’s average aircraft capacity downward to better match demand. 3. Delta 's industry-leading airport model includes a combination of airport lobby re-design, increased self-service technology and new airport customer service roles for employees that will help deliver speedy, convenient, helpful, friendly service to Delta customers. Delta fosters customer loyalty through quality trained employees, short waiting times, quality in-flight food service and good on-time performance.
Creative Media Services
Research Team: Todd Beals, Matt Tucker, Mary Vick 12/02/03
Mission – to be an air carrier with superior customer service that provides air transportation for passengers and cargo, utilizing low-cost carriers and regional jets throughout the United States and around the world.
SWOT ANALYSIS
Strengths: 1. 3rd largest mega carrier; established name; excellent reputation; worldwide brand recognition. Delta has been among the DOT’s top three in on-time, baggage handling, and customer satisfaction for the past three years. Delta’s new CEO, Grinstein, has an excellent reputation of resolving labor disputes. 2. Delta has continued to use innovative strategic business moves: a. Recently announced a new low-fare subsidiary airline servicing the East coast called Song, which has met its’ goal to push unit costs below 8 cents per seatmile, a standard industry measure. b. Joining with other major airlines in the industry to form a global alliance called, SkyTeam. The SkyTeam alliance results in cost savings by sharing cargo and passenger terminal facilities, integrating frequent-flyer programs, consolidating sales, maintenance and administrative operation, combining information technologies, and engaging in joint procurement where feasible (Corridore, 2003, p. 7). c. In early 2000, Delta acquired Comair, whose entire fleet consists of regional jets, and Atlantic southeast Airlines (ASA). The additional use of regional jets helps move Delta’s average aircraft capacity downward to better match demand. 3. Delta 's industry-leading airport model includes a combination of airport lobby re-design, increased self-service technology and new airport customer service roles for employees that will help deliver speedy, convenient, helpful, friendly service to Delta customers. Delta fosters customer loyalty through quality trained employees, short waiting times, quality in-flight food service and good on-time performance.
References: Banstetter, T. (2003, Nov. 13). Spike in Delta Airlines Pilot Retirements Will Widen FourthQuarter Loss. Knight-Ridder Tribune Business News. Banstetter, T. (2003, Nov. 21). Delta to Launch Its Own Discount Airline. Knight-Ridder Tribune Business News. Corridore, Jim. (2003, Sept. 25). Standard & Poor’s Industry Surveys Airlines. New York: The McGraw-Hill Companies. Ehrhardt, Michael and Brigham, Eugene. A Focused Approach: Corporate Finance (pg. 173) Holloway, Stephen: Airlines- Managing to Make Money. Mullin, Leo. (2003, March 12). Delta Airlines 2002 Annual Report. Will, George F.: The Turbulence in the Business Rattles Airlines and Unions http://www.sunspot.net/news/opinion/oped/bal-op.witcover21sep21,0,155526.column?coll=baloped-headlines http://www.baselinemag.com/article2/0,3959,1013642,00.asp http://businessmajors.about.com/gi/dynamic/offsite.htm?site=http://biz.yahoo.com/p/d/dal.html http://www.marketwatch.com/tools/quotes/detail.asp?view=detail&symb=DAL&siteid=yhoo&di st=yhoostoryquote http://www.nytimes.com/2003/11/17/national/17ECON.html?ex=1155445200&en=e110f030f870 3c37&ei=5035&partner=MARKETWATCH http://www.newstream.com/us/story_pub.shtml?story_id=11366&user_ip=66.21.238.200 http://www.delta.com/inside/investors/forward_info/index.jsp http://www.veracast.com/ssb/2003/transportation/87202119.cfm http://shopping.capelinks.com/mall/stores/delta-airlines.shtml http://www.computerworld.com/mobiletopics/mobile/story/0,10801,82389,00.html http://news.bbc.co.uk/2/hi/business/2957013.stm http://www.airportnet.org/depts/federal/press/articles/1014wsj.htm