Preview

Delta Airlines Essay

Powerful Essays
Open Document
Open Document
4692 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Delta Airlines Essay
A BRIEF ANALYSIS OF SELECTED AIRLINE¡¯S PROSPECTS

Table of Contents:

1. Introduction 3
2. Trends and Strategies in the Airline Industry: a Brief Overview 3
3. Airline Profiles 5
3.1 Southwest Airlines 5
3.2 United Airlines 5
3.3 American Airlines 5
4. The Impact of Acquisitions and Mergers 6
4.1 United Airlines/USAir 6
4.2 American Airlines/Trans World Airlines 7
4.3 Southwest Airlines/ATA 7
5. The Impact of Bankruptcy Proceedings on Untied Airlines 8
6. Effect of United Airlines Chapter 11 Proceedings on Other Airlines 9
7. External Factors Affecting the Airline Industry 9
7.1 Effects of September 11 on the Airline Industry 9
7.2 Effects of the Iraq War on the Airline Industry 10
7.3 Effects of SARS on the Airline Industry 10
…show more content…
Conclusion 13

1. Introduction
This analysis focuses on the US airline industry and its companies¡¯ stocks during the last decade. Specifically, this analysis gives attention to two so-called legacy airlines which include UAL Corporation, holding company for United Air Lines, Inc. (¡°United Airlines¡±), AMR Corp., holding company of inter alia American Airlines, Inc. (¡°American Airlines¡±), and a low cost carrier, Southwest Airlines Co. ("Southwest Airlines"). These three airlines were chosen in particular as they each have very unique strategies on how they compete in this extremely competitive industry.

2. Trends and Strategies in the Airline Industry: a Brief Overview
Hurt by poor profits and scarred from likely terrorist attacks against the US due to the US involvement in the Iraq war, the airline industry finds itself on a bumpy course. In an effort to head off a drop in the number of passengers and rising costs for security , companies laid off staff and trimmed services. In an already intensely competitive market, the ¡°inevitable¡± industry wide shakedown will have far-reaching effects on the industry's trend towards expanding domestic and international
…show more content…
One-time upstart Southwest Airlines pioneered it with peanuts, and newcomer JetBlue has given it satellite TV. Prior to September 11, there were only a handful of successful budget carriers in the US and Europe. Now those numbers are growing rapidly. Europe has seen the most growth with more than 50 budget carriers operating where there had only been four in 1999 . In the US Southwest Airlines reigns supreme over the low-fare realm. Southwest Airlines was not only profitable for the last decade (see Exhibit 6.2) but since its establishment 32 years ago . As a result, it has become a top-five carrier in the country . Likewise, since its inception in 1999, JetBlue has been growing almost exponentially. Others are taking note. Atlantic Coast Airlines, which had once relied on United Airlines for 85% of its revenue, waved good-bye to the major carrier, adopted a new look, and changed itself into a budget carrier called Independence Air

You May Also Find These Documents Helpful

  • Powerful Essays

    Over the many decades, this industry has existed; several airlines have declared bankruptcy and struggled to stay alive once on the other end of the bankruptcy. Very few of these chapter 11 filing airlines have truly endured the hard times and succeeded. This industry is facing a financial predicament and the future for the airline industry does not look good. The predicament that these industry faces that were accelerated by external shocks. According to Wilson (2005) the war in Iraq, the terrorist attacks on 9/11, the outbreak of Stars, and the crash of the stock market bubble of the millennium is some of the causes of the financial crisis that the U. S. airlines are facing, which has led to a $32 billion loss for the industry.…

    • 2884 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    Jetstar Five Forces

    • 681 Words
    • 3 Pages

    Sundaresan, Sanka Ram, n.d. Analysis of the Airline Industry. [online] Available at: http://bcs.solano.edu/workarea/mgarnier/MGMT%2050/Southwest%20Porters%20-%20Brief%202.pdf [Accessed 5 August 2011]…

    • 681 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Due to the economic crisis, fuel prices, and act of god environmental crisis, airline industries have suffered in the last ten years. However, these major threats do not seem to threaten Southwest Airlines. In fact, Southwest has been achieving consistent annual profitability for 38 consecutive years. (“Annual Report,” 2010)…

    • 5067 Words
    • 21 Pages
    Good Essays
  • Best Essays

    “The U.S. airline industry had lost money in 14 of the 28 years from 1980 through 2007, with combined annual losses exceeding combined annual profits by $15 billion. Yet in July 2008, Southwest reported record quarterly revenues, its 69th consecutive quarter of profitability, rising passenger traffic on its flights, and a record load factor.”5 With a brilliant strategy of ‘low cost/low fare/no frills’ Rollin King, along with Herb Kelleher, launched the most surprising success story in airline history. In 1966, King had an idea. “His business concept for the airline was simple: attract passengers by flying convenient schedules, get passengers to their destination on time, make sure they have a good experience, and charge fares competitive with travel by automobile.”5…

    • 4181 Words
    • 17 Pages
    Best Essays
  • Good Essays

    The U.S. Airline Industry

    • 1205 Words
    • 4 Pages

    The U.S. airline industry provides a unique service to its customers. It transports people and goods with efficiency and convenience which is not achieved by any other service. The purpose of this article is to collect data on the U.S. airline industry and analyze the state of the industry today. Data came from sources such as the Federal Aviation Administration, scholarly articles, and websites such as dallas.culturemap.com and airwise.com. Tools used to analyze the data include P.E.S.T., and Porter’s five forces. The analysis also focuses on the industries’ drivers of change and its key survival factors.…

    • 1205 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Currently the airline industry as a whole seems to be on the road toward recovery. Even before the September 11, 2001 terrorists attacks, industry-wide revenues and profits were far below expectations. This pre-attack downturn was an indirect result of the dot.com bubble burst as well as the discovery of high level corporate fraud. The stock market doesn't react positively to this kind of data and beginning in April of 2000 the surge in growth of the U.S. economy took a sudden turn for the worst. As early as June of 2001 these factors coupled with delays of service, customer complaints, and lack of upgraded infrastructures in the commercial airline industry helped to propel the profits of all the key players, (Lower profits for Southwest), into a negative downward spiral. The 9-11 attacks were unfortunately timed perfectly. They hit us when we were already down. If the cruise ship industry was targeted, the recovery would have no doubt been speedier and the damage more sustainable. The commercial airline companies, because of these factors, have absorbed the negative impact with much less tolerance and recoverability. In April of 2001 the Air Transport Association (ATA) predicted a slower growth rate for the industry in the U.S. With traffic and profitability shown to be lower in and already struggling economy it is clear that this industry couldn't absorb the attack losses even though global capacity was expected to increase by 4.5%. The rush to reduce capacity and keep growth in operations in the…

    • 5553 Words
    • 23 Pages
    Good Essays
  • Good Essays

    The airline industry experienced growing revenues throughout the 1990s. At the turn of the new millennium, there was a drastic change to this trend. A major devastation to the airline industry came after the terrorist attacks on September 11, 2001. The industry recorded losses of $7.7 billion for the year and revenues went down 13.5% after a record $93.6 billion in 2000. The industry struggled throughout the following years. Recovery from losses was difficult in those times due to increased security costs, increasing oil prices, a struggling economy, and low ticket fares. In 2008, oil prices reached a record high and the top 10 U.S. carriers lost $4 billion, followed by a $5 billion loss in 2009. Conditions have begun to look better for the industry. There is evidence of improving demand and revenues for the top 10 U.S. carriers in the first half of 2010, and oil prices remain lower than the 2008 record highs. This could be the beginning of more profitable years for the industry.…

    • 551 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Article Review Paper

    • 398 Words
    • 2 Pages

    The article predicts the decline of demand in the U.S. domestic airline market in 2008. Analysts said some softening in the economy and a lack of relief from fuel pricing are driving the trend. The International Air Transport Association, citing March 2007 traffic results, said international passenger traffic rose 7.8 percent year over year. Based on the data given by the Air Transport Association, capacity still is expected to grow among carriers in both the domestic and international front.…

    • 398 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    Delta Airlines

    • 4528 Words
    • 19 Pages

    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.…

    • 4528 Words
    • 19 Pages
    Best Essays
  • Better Essays

    The airline industry is facing one of its most difficult times in history. A worldwide recession along with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue and rising fuel prices. Additionally, airline companies face the increase competition from new entrants. The shortage of pilots has also caused problems for the airline companies.…

    • 2432 Words
    • 10 Pages
    Better Essays
  • Satisfactory Essays

    Southwest Airlines Essay

    • 338 Words
    • 2 Pages

    Sticking with what has worked, Southwest has expanded its low-cost, no-frills, no-reserved-seats approach to air travel throughout the US to serve almost 70 cities in some 37 states. Now among the leading US airlines, Southwest still stands as an inspiration for scrappy low-fare upstarts the world over. The carrier has enjoyed 38 straight profitable years, amid the airline industry's ups and downs. Southwest's fleet numbers about 550 aircraft. The company acquired AirTran Holdings, the parent company of AirTran Airways, in 2011 for about $1.4…

    • 338 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    The US Airlines market experiences ups and downs, and different phases; for example the period of regulation up until 1978 and the period of deregulation.…

    • 1748 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    The purpose of this report is to inform airline executives about the external forces affecting their industry and what they can do to keep up with the changing business atmosphere. The terrorist attacks of 9/11 had a grueling effect on the economy, and while most industries are almost back to their pre-9/11 financial status, the airline industry is lucky to break-even. This report will explain three leading trends that are forcing the airline industry to re-think their stance on strategic planning.…

    • 1801 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Fuel Impact

    • 2938 Words
    • 12 Pages

    Airline business is known for being extremely sensitive to any global event from weather disasters to economic/political crisis regardless of how remote the airline physical location is.…

    • 2938 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    Airline Industry

    • 4742 Words
    • 19 Pages

    Introduction The following is an analysis of the airline industry. Using collected information and Porter’s “Five Forces” model, we will provide information about the attractiveness of the airline industry and provide a recommendation based on that information. Industry Background We will be outlining the Scheduled Air Passenger Transportation, NAICS number 481111 “This U.S. industry comprises establishments primarily engaged in providing air transportation of passengers or passengers and freight over regular routes and on regular schedules. Establishments in this industry operate flights even if partially loaded. Scheduled air passenger carriers including commuter and helicopter carriers (except scenic and sightseeing) are included in this industry.1” We will focus on domestic travel, that is, travel within the continental United States. We have also limited our scope to include only flights that carry passengers or passengers and cargo. Flights carrying exclusively cargo will be excluded. Geographic Scope Airlines performing passenger flights within the continental United States will be focused on. Flights outside the continental United States and flights carrying only cargo are not included in this analysis. Each airline is located at a number of locations in major cities, at major airports, all over the country. Some airlines have hubs at multiple airports all over the country. Many airports are hubs for multiple airlines.…

    • 4742 Words
    • 19 Pages
    Good Essays