...their main line of business. Delta Air Lines is a very well known airline that flies passengers and their luggage to various destinations. In addition to discussing Delta Air Line’s main line of business, how the company implement’s the 4p’s of marketing will also be discussed in this project. Delta Air Lines When individuals think of fortune 500 companies Apple, Microsoft and the United States Parcel Services are amongst the first to come to mind. Fortune 500 companies are companies that are ranked annually by Fortune magazine and are the 500 largest companies in the United States. The fortune 500 list are based off of the company’s most current figure in regards to revenue. Companies such as Exxon Mobile, Wal-Mart, GE and Chevron have made their way up the fortune 500 list guide a few times in recent years. Being a fortune 500 company gives a company a reputable reputation and image (Fortune 500, 2012). Delta Air Lines is an airline that provides scheduled air transportation to various destinations for passengers and cargo throughout the United States in addition to various countries and continents. Delta Air Lines was originally Huff Daland Dusters in 1924 when it was first originally founded as a c Daland Dusters moved to crop dusting service in Macon, Georgia. Huff Daland Dusters moved to Monroe, Louisiana in 1925 and was then brought by CE Woolman and two additional partners. While under new ownership, Huff Daland Dusters was changed to Delta Air Service and...
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...Organizational History and Current State of Affairs This portion of the paper will include key information about Delta Air Lines, Inc. (Delta): (a) history; (b) culture; (c) important leaders over the years; (d) current products and service offerings: (e) target markets; and (f) methods of product and service delivery. History This section describes the history of Delta. The company was founded in Macon, Georgia, in 1924, as the world’s first crop-dusting service, Huff-Daland Dusters. The company moved to Monroe, Louisiana, in 1925. In 1928, field manager C. E. Woolman and two partners purchased the service and renamed it Delta Air Service after the Mississippi Delta region it served. Delta was the first international mail and passenger route on the west coast of South America. Delta operated its first passenger flights over route stretching from Dallas, Texas to Jackson, Mississippi, via Shreveport and Monroe, Louisiana. Also, Delta was awarded a US Postal Service contract in 1934 to fly from Fort Worth to Charleston via Atlanta (Hoover’s, 2011). In 1941, Delta relocated to Atlanta. Woolman became the president in 1945 and he managed the company until his death in 1966 (Delta, 2011). Delta offered its first night service in 1935, using the Stinson Model A; the first Delta aircraft with two pilots. Douglas DC-2 and DC-3 service was introduced and the introduction of flight attendants, called “stewardesses,” added to flight crews. Delta contributed to the war effort...
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...------------------------------------------------- Competing through alliances in the airline industry: The AIR FRANCE- KLM/DELTA AIR LINES JOINT VENTURE In less than twenty years, the global industry has gone through tremendous change. Several airlines had gone out of business that had been on top of the industry for years. One of the remarkable changes had been airline alliances. The case focuses on the airline industry and how airlines are forming alliances and joint ventures. It then introduces the partner firms Air France KLM , and Delta . Air France KLM had over 25 collaborative agreements with other carriers and was a founding member of Skyteam, one of the leading airline groups. Air France KLM and Delta Airlines formed revenue and cost sharing joint ventures that include all transatlantic routes of the two airlines. The alliance formed sales over 12 billion euros, and accounted for about 30% of all North Atlantic passenger business. The case also provides information on joint ventures, and how alliances are used strategically to enhance revenues and reduce cost. The case also discuss how collaboration can be structured and governed to achieve outcomes, and how strategic decisions by one alliance partner can affect the stability of the alliance. The issue of the case is if whether Air France KLM should reconsider their alliance with Delta Airlines, due to some of the independent decisions made within the alliance. Some of the external factors that affected the company...
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...Fixed costs do not vary with the scale of operations, and will be incurred even if the flight is cancelled. Examples of fixed cost are the rental cost of leased planes, which is time- but not operations-sensitive, and general administrative costs such as salaries. Constant costs, which cease if the flight is cancelled but are invariant to the volume of traffic carried, are also high. Examples of constant costs are the subsistence allowance paid to the cabin crew, and landing fees, which do not depend on the number of passengers, but will not be incurred if the flight is cancelled. Variable costs, which vary with the volume of traffic carried, have traditionally been quite low in the airline industry. They include ticket commissions, baggage handling, and cabin amenities including food and beverages, among other passenger-related costs. With the recent spate of cost cutting, where ticket commissions to travel agents have been eliminated by the major airlines (with the exception of Southwest Airlines), a cap of $100 commission on international flights, and drastic reductions in the quantity and quality of meals, variable costs have gone down. To counter the effects of the September 11, 2001 terrorist attacks, U.S. airlines have reduced fares to lure back lost passengers. As a result, load factors for 2002 are estimated to be around 72 percent, but the breakeven passenger load factor has risen to 81 percent, so losses for 2002 are estimated at $9 billion. (3) Thus there is...
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...WestJet airline is a discount airline based in Canada. WestJet has been very successful and they believe that their success is due to their distinct culture. WestJet offers low fare prices and friendly service, which has helped them gain great ratings in customer service. They believe in running a fun organization, having trust and respect for all employees, and treating all employees as equals no matter what their title. This, they believe, reflects on their customers because happy employees will offer the best customer service. WestJet also believes in teamwork, which in return helps cut costs. They feel that, when necessary, employees can do things outside of their job description in order to make things run smoother. This also helps cut costs because it means they do not have to hire more people to do a specific job since everyone is willing to help out. Also, employees have so much trust in the company that they do not even have contracts or unions, just agreements. All of this is what WestJet believes contributes to their success the most. The major problem in this case is that WestJet has big expansion plans, and if they continue to expand they will probably not be able to keep their “fun” culture. The more WestJet expands, the more people they are going to need to hire. Hiring so many new people can possibly ruin the culture of the company. This was proven to be a problem when Beddoe hired Steve Smith to takeover his job as CEO. Smith was hired in early 1999 and suddenly...
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...gave birth to what is known as Delta Airlines today. Furthermore, the year 1930 came with a major setback to the airline. Delta failed to secure a commercial airmail contract and therefore suffered major losses which forced the airline to suspend passenger service. As time went by, the year 1934 seemed to be the year for Delta Airlines as they secured a low-bid contract for the new Route 33 airmail service between Dallas and Charleston, South Carolina, via Atlanta .The airline also resumed passenger services that year. The following years were very successful periods for Delta airlines as it managed to spread its wings to various states around the United States and it also managed to purchase airlines such as Chicago airlines and Southern Air Airlines. As the jet...
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...Domestic Environment Delta Air line is an international airline Company that provides schedule air transportation to several places throughout the whole world. The company is based in the United State of America, serving as its domestic market, since establishment and has been ranked the largest airline in the US in regard to the total number of destinations or places it serves. The Airline industry, in which Delta Air Lines serves, is one of key sectors for the economic growth of a country. The industry offers job opportunities to millions of peoples and generating nearly half of most revenue. According to Air Transport Association, 2009 the industry in USA contributes nearly 5 percent of overall Gross Domestic Product , generates more than half a trillion in annual returns and offers employment to more than ten million people. The industry worldwide is predominantly made up of the most promising players, Delta inclusive, such as Southwest, FedEx, US airways, Qatar Airlines, South Africa Airways, Virgin Atlantic, among others. These players are categorized into three depending on their revenues as; major airlines, the national airlines and regional airlines (Gale, 2005). Delta Air Line originally was operational in the agriculture industry in 1942 was it was founded as the world first aerial crop dusting corporation before venturing into the commercial airline industry. With journey coupled with continuous failures and successes, the company has grown to the level it has...
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...Introduction Delta Air Lines Inc. is an international airline based in the United States and headquartered in Atlanta, Georgia. This company was formed in 1924 and grows into a major airline that serves more than 160 million customers each year. With its unsurpassed global network, Delta and Delta Connection carriers offer service to more than 350 destinations in nearly seventy countries on six continents. Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircrafts (“About Delta”). This paper will discuss three recent marketing and operation activities at Delta. First, it will describe the new investment in the expansion of the eBoarding paperless check-in option for customers with smartphones. Second, it will explain the launch of Wi-Fi on Delta’s regional jets. Third, it will introduce the new Economy Comfort cabin of Delta’s aircraft. Paperless eBoarding Since 2007, Delta has been investing money into the technology called eBoarding that allows passengers to obtain an electronic boarding pass on their preferred smart mobile devices. Besides being able to receive their boarding passes on their cellphones, passengers can check in, access security, and board their flight by simply using the eBoarding option. Delta tested this technology for four years. Until the beginning of 2011, the availability of eBoarding pass option has expanded to 69 worldwide locations. Continental Airlines was actually the first airline offering this paperless...
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...Political-Legal Environment: Delta Airlines Delta Air lines is not immune to the political and legal structures that exist both domestically and globally. There are many factors that affect the political and legal structures for Delta in their domestic environment of the United States and also in the global environment of Europe. Teresa Cederholm in her article on MarketRealist.com states “The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition” (2014) She goes on to elaborate further on issues that impact the airline industry such as “war, terrorism, and the outbreak of diseases” (2014). All of these issues require the government to set in and set different rules for airlines on how they operate both at home and abroad. There have been many factors that have recently affected the political and legal environment for Delta Airlines. One of the biggest events of our generation that affected the airline industry was the terrorist attacks of September 11th. After September 11th, the United States government many security regulations in place to make air travel safer for both the passengers and the crew of the air plane. With many of the restrictions in place, Delta Air Lines faced many problems financially. According to Cederholm, the revenue for all the United States airlines dropped to $107.1 billion in 2002 from the $130.2 billion in 2000 (2014). Cederholm goes on to state that “the global airline...
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... (i) Delta Air Lines need to update the residual value and depreciation of their aircraft over time in order to calculate the life of the aircraft. The calculation requires estimation and assumptions such as the long-term of usage, maintenance cost, residual value and economic conditions which need constant review. Technological changes in the industry are one of the reasons why Delta Air Lines decided to extend the useful lives of their flight equipment. Technological advances such as changing engines from pistons to jet engines allow aircrafts to function more efficiently with less wear and tear on the airframes and for longer period of times. With consistently updated with latest technology, aircraft are better maintained and can simply last much longer. In addition, Delta Air Lines decision to change in depreciation since 1986 had a positive impact on the company’s financial statements. Depreciation is a non-cash item which does not affect cash flows or revenue. However, it does have an effect on the net income. By stretching out depreciation, Delta will see a decrease in depreciation expense resulting in higher net income. This is crucial for not only for Delta Air Lines, but to all airlines companies as well as intense competition and deregulation in the industry were being pressured to show more profits and results. The disadvantage to decreasing in depreciation is taxes. With decreased depreciation and increased net income, Delta Air Lines’ income taxes increased...
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...Problem 5.16 – Delta Air Lines, Inc. Computing and Interpreting Risk and Bankruptcy Prediction Ratios for a Firm That Declared Bankruptcy. a. (1) Current Ratio: 2000: $3,205/$5,245 = 0.61 2001: $3,567/$6,403 = 0.56 2002: $3,902/$6,455 = 0.60 2003: $4,550/$6,157 = 0.74 2004: $3,606/$5,941 = 0.61 (2) Operating Cash Flow to Current Liabilities Ratio: 2001: $236/0.5($5,245 + $6,403) = 0.041 2002: $225/0.5($6,403 + $6,455) = 0.035 2003: $142/0.5($6,455 + $6,157) = 0.023 2004: $(1,123)/0.5($6,157 + $5,941) = (0.186) (3) Liabilities to Assets Ratio: 2000: $16,354/$21,931 = 0.746 2001: $19,581/$23,605 = 0.830 2002: $23,563/$24,720 = 0.953 2003: $26,323/$25,939 = 1.015 2004: $27,320/$21,801 = 1.253 (4) Long-Term Debt to Long-Term Capital Ratio: 2000: $5,797/($5,797 + $5,577) = 0.510 2001: $7,781/($7,781 + $4,024) = 0.659 2002: $9,576/($9,576 + $1,157) = 0.892 2003: $11,040/($11,040 – $384) = 1.036 2004: $12,507/($12,507 – $5,519) = 1.790 (5) Operating Cash Flow to Total Liabilities Ratio: 2001: $236/0.5($16,354 + $19,581) = 0.013 2002: $225/0.5($19,581 + $23,563) = 0.010 2003: $142/0.5($23,563 + $26,323) = 0.006 2004: $(1,123)/0.5($26,323 + $27,320) = (0.042) (6) Interest Coverage Ratio: 2000: $1,829/$380 = 4.8 2001 to 2004: The interest coverage ratio is negative and, therefore, is not covered. b. Altman’s Z-Score 2000 Working Capital/Assets: 1.2[($3,205 – $5,245)/$21,931] ..................... (0.112) Retained Earnings/Assets: 1.4($4,176/$21,931)....................................
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...prices are at an all-time high. Many air-line companies have implemented baggage fees to help recover from the rising fuel prices and etc. There are some recent trends that have helped the air-line industry and also affected the air-line industry. With booming cellular data usage on the rise, many companies have turned to mobile apps. Smart phone applications are convenient for customers and the companies are taking advantage of the availability of these mobile devices. It is instant access and information in the palms of their hands. Airlines are increasing their reliance on technology to streamline passenger experience at check in and at the gate. Despite unfounded security concerns, paperless boarding passes have been adopted by some airlines and are being tested by others. A bar code is sent to the phone and then scanned by a barcode reader at security and during boarding. The TSA actually prefers the electronic bar codes, because they are much harder to counterfeit than printable boarding passes. One of the most recent trends that will impact the air-line industry is the European emissions regulations. Everyone in the world is preparing for European green-house gas trading scheme. The trading scheme will likely increase cost and could past through to passengers or mitigated through other ways, and impact carriers credit quality over time. European airlines will most likely endure most of the impact by the new regulations. The International Air Transport Association (IATA), which...
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...Delta’s Communication Plan: Internal Memorandum Communication skills, is an essential part of general management skills, and are used to ensure that the right stakeholders get the right information at the right time and the communication requirements and expectations of stakeholders are properly managed (Cite p. 258). By writing and sending out the internal memorandum the CEO Richard Anderson displayed exceptional management communication skills, because the information was sent to the right stakeholders which were the employees of Delta Air lines, this communication or information was not meant for other stakeholders such as the customers of Delta or the employees of Northwest Airlines. This communication was also sent out at the right time, a day before the media got the news ensuring that the employees do not hear the news of the final merger agreement from an outside media source. The internal memorandum sent out within Delta Air lines gave the employees an idea of the change going on in the company and how they would be affected. In communicating change, the reasons for the change, and the benefits of the change should be stated. These areas were all communicated through the internal memorandum. Reading the internal memorandum one can see that the voice of the memo tries to connect with the readers. The style, tone, voice, and word choices Delta CEO Richard Anderson used in the memo effectively communicated the change. The memo listed out what has been changed hierarchically...
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...CCRN INTRODUCTION Since the inception of flight in 1903, air travel industry has been a crucial means of transportation for people and products. The invention of the first aircraft hundred-plus years ago brought about a revolution of how people travel. It has been a dynamically changing industry. Air travel remains a large and growing industry. It facilitates world trade, economic growth, tourism and international investment, and is therefore central to the globalization of many other industries. This paper will discuss the characteristics of airline industry in the United States with more focus on passenger airlines, its market structure and competitive environment, market shares and profits, recent developments, technology and innovation, and the future of the industry. U.S. AIRLINES The airlines are classified in many ways. It can be classified based on their size, revenue, and what they transport. The most common classifications are major passenger airlines, low-cost carriers, airfreight, and regional or commuter carriers. As of December 2014, there were 18 major carriers, which defined by the United States Department of Transportation as an airline that posts more than $1 billion in revenue during a fiscal year. Eleven of which are mainline passenger airlines, four are freight carriers, and three regional airlines. The mainline passenger airlines are Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue, Southwest Airlines...
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...and were considered one of the four prominent airlines in the U.S. Although for a time they were successful, it wasn’t long after that Eastern Airlines began to run into problems. Eventually Eastern made a decision that would prove to be disastrous for the airlines-- they sold the company to Frank Lorenzo. Why did Eastern sell to Texas Air? For starters, the 1970's and 80's proved to be a very difficult time for many airline companies. In the late 70’s the Airline Deregulation Act of 1978 was passed. The enactment did provide many new freedoms (freedom to expand their route systems for example), and positive outcomes for airline carriers. One of which was flexibility to develop innovative pricing structures. This flexibility allowed carriers to expand into new markets. Yet with the positive changes of deregulation, came negative consequences for the airlines-- “airfare wars.” Companies now had to compete to remain in the market. They waged airfare wars against their rivals, slashing their own prices to knock off smaller companies. Many airlines struggled tremendously, and had difficulty keeping their doors open. This made many air carriers susceptible to unwanted, hostile takeovers and mergers. In 1985 Eastern was a large airline (three point nine billion in assets, and over four point eight billion in revenues). Eastern was ranked third among all U.S. airlines, followed by United Airlines, and American. However, between 1985 and 1986 Eastern’s performance steadily...
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