Summary: Delta Airlines Competing In A Low Cost Environment

Delta Airlines
Competing in a Low Cost Environment
Prepared by:
Prepared for:
11/20/2013

DELTA AIRLINES COMPETING IN A LOW COST ENVIRONMENT
The airline industry is highly cost-driven creating an extremely competitive environment in which to operate. The majority of customers prefer an inexpensive and hassle-free airline experience; for those business customers who previously paid for the extra features, such as first class, the ability to reduce costs has become more important causing them to consider finding lower priced business class seats or flying coach instead. This trend is referenced in Exhibit 1. The airlines which have focused on building their business model to provide a unique or exceptional flight experience in
is an air carrier company competing in the "low cost" dominated market of airlines whose business structure consists of three major business divisions: passenger, cargo and other. Delta is the largest competitor in the cargo division, in terms of revenue, among US passenger airlines. The "other" division of the business unit focuses on providing maintenance, repair, and overhaul (MRO) services, pilot training, travel packages, staffing services, and other various support activities. The problem is focused primarily within the passenger segment of Delta 's services. The airline provides its customers with more than 13,000 daily flights to 313 destinations within the US, as well as within 58 countries; their services are offered on all 6 populated continents operating through 10 hubs located in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Delta also utilizes their membership in the SkyTeam global alliance giving them access to many major international airlines, but also giving those competitors access to their routes as well; additionally, they have multinational marketing alliances with many other international airlines outside of the SkyTeam. Delta also offers the SkyMiles frequent flier program, which is the world 's largest airline loyalty program, the Business Elite service, and more than 50 Delta Sky Clubs in airports worldwide. These services offer
The Hartsfield-Jackson Atlanta International Airport flies more than 994,000 aircrafts which service more than 89.4 million passengers each year, Delta accounting for approximately 56 percent of these flights.?? This clear dominance at such an important hub gives Delta an apparent advantage over its competitors. They also offer 37 destinations across the Atlantic Ocean, in addition to being the primary carrier to Africa. They have 10 hubs located in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita which offer a range of options available to those making trips through their services, allowing them to offer more flexibility within their scheduling. Delta has established clear advantages in the area of location