Premium Essay

Delta Airlines Case Study Questions

In: Business and Management

Submitted By kuulade19
Words 443
Pages 2
Delta 1. (a) Fuel cost drives the airline industry. Fuel cost average anywhere from 30% to 50% of total operating costs in the airline industry and crude oil and jet fuel costs had been on the rise.
(b) The refining industry in the US is defined regionally by petroleum administration for Defense Districts (PADD), a system put in place during the Second World War. 2. Rising fuel cost is truly a problem for Delta. In 2011 Delta was hit hard by rising fuel cost. Deltas total fuel cost had risen by nearly $3 billion in 2011. Delta was already a company on the rebound. It closed in 2011 with $35 billion in revenue, up 10 percent from 2010, with profits up 40% to $854 million. Delta was driving profitability by flying fewer planes fewer miles with fuller seats. It had 80,000 employees worldwide and $3.6 billion in cash. Delta was the world’s largest airline in terms of both fleet size and scheduled passenger traffic and jet fuel costs were killing it. 3. Rising fuel costs were the result of growing supplies of domestic oil in the US and its inability to gain access to major refining centers like the US, East Coast and Gulf Coast districts. The rapid development and production of shale oil from domestic sources was landlocked. Pipelines were at capacity and oil was stockpiling. Transportation alternatives like railroads were costly 4. Refineries on the East coast were closing because they were suffering the highest crude acquisition cost. Although East Coast refineries had purchased crude oil at the same prices as the US average and Midwest refineries as recently as the spring of 2010, by late 2011 they were paying a premium of more than $10/bbl over the US average, and more than $16/bbl over the Midwest, as noted previously. By the spring of 2012, the East Coast refinery complex was suffering the highest crude oil acquisition costs in the nation by far.

Similar Documents

Premium Essay

Competing Through Alliances in the Airline Industry: the Air France- Klm/Delta Air Lines Joint Venture

...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 had been regulations set on the industry, which restricted some airlines from...

Words: 1265 - Pages: 6

Premium Essay

Busn620 All Weeks Assignments Latest 2016

...http://hwcampus.com/shop/busn620-weeks-assignments-latest-2016/ BUSN620 Week 1 Assignment Title: Week 1 Due Date: End of Week 1 1. Read weekly announcement 2. Participate in the weekly forum. 3. Review weekly assignments in the syllabus. 4. Please complete the following for your week 1 written assignment: Read Case #16- BMW of North America and answer the following questions (each question a subsection): 1. What is fueling BMW's Growth? 2. How is BMW Doing in the U.S? Compare the following 3 years (2012, 2013, & 2014) in terms of annual revenue, car sales, gross margins and end year stock sales (outside research required). 3. Is the "Dream It. Build It" program a sustainable advantage in the long term? Do you see any room for further improvement? (link to other companies to add depth; i.e. Ikea, etc.) 4. Do you think customers really need "millions of combinations" for their car? Can they be happy with available standard options? What are the downsides of mass customization? 5. How does this case study link to the topics presented in Chapter 1, Chapter 2 & Chapter 3? 6. submit your responses to the Weekly Assignment Folder: Additional resources for Case Study: • https://www.youtube.com/watch?v=8Ddq6O_QAz0 • http://www.anthonymonahan.com/BMW-Dream-It-Build-It-Drive-It Post/submit homework to the assignment folder for grading. Make sure you provide substantive graduate level answers. Review examples in resource section, grading rubric and APA guide prior to final...

Words: 1560 - Pages: 7

Premium Essay

Delta Airlines Marketing

...Title of essay: Exploring Marketing with Delta Airlines as a Case Study Tedlow, Richard S. believes that the history of consumer product marketing in the United States can be divided into three phrases.1 The history of marketing will aid us in understanding the business world today and is thus useful in this essay to explore this in brief before embarking on studying Delta Airlines as a case study to approach the topic of marketing, in the context of the U.S Airline Industry. Phrase 1 is that of fragmentation and this is purely due to logistics reasons, rather than the result of any marketing strategy. This results in transportation of bulky goods from one region to another being relatively expensive and for a consumer product to achieve national distribution, a favorable ratio of weight and bulk to value is required. This phrase happened before the 1880s and the market size is restricted due to a lack of information, and it is characterized by a high margin and low volume. The second phrase of unification is the rise of mass marketing, with high volume and a low margin, which is the direct opposite of the first phrase of fragmentation. The development of this phrase is possible due to firstly, the development of the railroad and the telegraph and secondly, innovations in manufacturing technology. All the above innovations led to a more effective transportation and communication network that lowered the cost of mass marketing products by significant percentages. There is a rise...

Words: 5315 - Pages: 22

Premium Essay

Exploring Marketing with Delta Airlines as a Case Study

...Title of essay: Exploring Marketing with Delta Airlines as a Case Study Tedlow, Richard S. believes that the history of consumer product marketing in the United States can be divided into three phrases.1 The history of marketing will aid us in understanding the business world today and is thus useful in this essay to explore this in brief before embarking on studying Delta Airlines as a case study to approach the topic of marketing, in the context of the U.S Airline Industry. Phrase 1 is that of fragmentation and this is purely due to logistics reasons, rather than the result of any marketing strategy. This results in transportation of bulky goods from one region to another being relatively expensive and for a consumer product to achieve national distribution, a favorable ratio of weight and bulk to value is required. This phrase happened before the 1880s and the market size is restricted due to a lack of information, and it is characterized by a high margin and low volume. The second phrase of unification is the rise of mass marketing, with high volume and a low margin, which is the direct opposite of the first phrase of fragmentation. The development of this phrase is possible due to firstly, the development of the railroad and the telegraph and secondly, innovations in manufacturing technology. All the above innovations led to a more effective transportation and communication network that lowered the cost of mass marketing products by significant percentages. There is a rise...

Words: 5315 - Pages: 22

Premium Essay

Deltas New Song Case Study

...Lance Welsh Case 1 (Delta’s New Song) Accounting 581 Professor Thornock Case Study Questions 1. Q. Identify several possible drivers of salary costs for use in estimating a salary cost function. Using one of these cost drivers, apply the High-Low technique to estimate the salary cost function for the Delta Airlines. What driver did you select and why? How would Delta use this function to forecast costs? What are the advantages of this technique? The disadvantages? A. Some of the possible drivers of salary cost are Number or Departures, Revenue Ton Miles, Revenue Miles scheduled, Revenue passenger miles and there are countless more you could use. High low method for revenue Ton Miles (High-2,369, low-1,580) by Salary Cost(High-1,607, Low1,037) :(2,369-1,580)/(1,607-1,037)= 789/570=1.384 I selected this driver because the revenue directly correlates to the price you could pay your employees and still turn a profit. Delta can use this to see that they are making a profit when looking at just the salary cost and the revenue they bring in. The advantages of this technique are you have concrete evidence when and if employees ask how much they are getting paid and why and the disadvantages are that the revenue Ton Miles can fluctuate over the course of a year and make it hard to base the decision of salaries on just one variable. 2.Use simple regression to estimate the salary cost function for Delta Airlines. Comment on the statistical validity and significance...

Words: 676 - Pages: 3

Premium Essay

Recommendation Report

...RECOMMENDATIONS REPORT: DELTA AIR LINE, INC. Prepared for: Delta Air Line Executives Prepared by: Olivia Wan April 16, 2013 TABLE OF CONTENTS INTRODUCTION 1 STRENGTHS 1 Frequent Flier Program 1 Baggage System 2 SkyTeam 3 WEAKNESSES 3 Treatment of Delayed Passengers 3 Ticket Over-Sales 4 OPPORTUNITY 5 Entertainment 5 THREATS 5 Competition 5 Unexpected Weather 6 RECOMMENDATIONS 6 Customer Survey 7 Increase Promotions 8 Customer Service Training Program 9 CONCLUTION 10 BIBLIOGRAPHY 11 ILLUSTRATIONS 4,5 Figure 1 …4 Figure 2 5 EXECUTIVE SUMMARY DELTA AIR LINE, INC. PREPARED BY OLIVIA WAN Delta has a very strong frequent flyer program that serves and benefits customers. Also, Delta has made an improvement into baggage system to limit miss handle baggage. Such improvement strengthens the company and allows gaining more trust in customer services. Within the last several years, Delta joined in the SkyTeam program, which provides more destinations that customers can choose from, at the same time they will also get the benefit from the frequent flyer program by traveling other airlines within the SkyTeam program. Airline industry is the kind of industry that provides service to customer. However, Delta have not yet meet their goal to better service it customers. Customers have complaint about their treatment toward the delayed due to the aircraft problem. Also, the over sales ticket have brought down Delta customer service image....

Words: 5776 - Pages: 24

Premium Essay

Hrm Topic

...HIGH-LEVEL EMPLOYEE INVOLVEMENT AT DELTA AIR LINES Bruce E. Kaufman As described in this unique case study, Delta Air Lines operates one of the most advanced, highlevel employee involvement programs in the nation. Based on in-depth field study and personal interviews, the development, structure, operation, and business goals of the program are described. The study then summarizes the business benefits and costs of this type of high-level employee involvement program and concludes with 12 “lessons learned.” © 2003 Wiley Periodicals, Inc. Employee involvement is not a new idea, as witnessed by William Basset’s 1919 book When the Workmen Help You Manage. Only in the last two decades, however, has employee involvement (EI) taken off, particularly among “high-performance” organizations. Although EI programs are widespread, considerable diversity exists in their breadth, depth, and form. In a study of 313 large companies with EI programs, Lawler, Albers, and Ledford (1992) found that six out of ten had only “low-level” EI programs—based on sharing of information, rewards, power, and training with employees—or programs that relied principally on financial incentives, while only 7% of companies had “high-level” programs. A more recent edition of their study (Lawler, Mohrman, & Benson, 2001) does not provide comparable data, but the relative rarity of high-level EI programs is indicated by the fact that in 1999 only 7% of companies had some form of participation group other than a...

Words: 10731 - Pages: 43

Premium Essay

United-Continental Meerger

...University Koushik Ghosh, Central Washington University Recommended Citation: Carbaugh, Robert J. and Ghosh, Koushik (2010) "United-Continental Merger," Journal of Industrial Organization Education: Vol. 5: Iss. 1, Article 1. DOI: 10.2202/1935-5041.1034 Unauthenticated | 62.189.189.132 Download Date | 6/6/13 12:08 PM United-Continental Merger Robert J. Carbaugh and Koushik Ghosh Abstract This case study discusses the nature and likely effects of the proposed merger between United and Continental. It is intended as a lecture for instructors teaching undergraduate courses in Industrial Organization or Antitrust Economics KEYWORDS: United, Continental, Merger, Antitrust Unauthenticated | 62.189.189.132 Download Date | 6/6/13 12:08 PM Carbaugh and Ghosh: United-Continental Merger United-Continental Merger On May 2, 2010, the Boards of Directors at United Airlines and Continental Airlines approved a stock-swap deal that will combine them into the world’s largest airline. The combined carrier will have 21 percent of domestic flying capacity, taking the lead from Delta Air Lines, which will lose what had been its leading 20 percent share of the domestic market. The deal still needs final approval from the U.S. Department of Justice and shareholders before being allowed to go forward. The firms hope to complete the transaction in the fourth quarter of 2010. According to the management of United and Continental, the proposed merger will generate streamlined service and...

Words: 4509 - Pages: 19

Premium Essay

Southwest Case Study

...Southwest Airlines, Case Analysis Your name BUSN412 Business Policy August 7th, 2011 CASE ANALYSIS Southwest Airlines. COMPANY NAME: Southwest Airlines. INDUSTRY: Air Travel. COMPANY WEBSITE: (www.southwest.com) COMPANY BACKGROUND: Southwest Airlines Co. incorporated in 1967, is a passenger airline that provides scheduled air transportation in the United States. As of December 31, 2010, the company had 548 Boeing 737 aircraft serving 69 cities in 35 states (Southwest Airlines Company profile, 2011). Key officers include: Herbert D. Kelleher – Founder and Chairman Emeritus. Colleen C. Barrett – President Emeritus. Gary C. Kelly – Chairman, President & Chief Executive Officer. The Company functions primarily on point-to-point service rather than focusing on hub and spoke service. About 78% of the passengers of the airline travel on non-stop flights and the Company predominantly serve short-haul routes with flights operating highly frequent. (Southwest Airlines Company profile, 2011) SWOT ANALYSIS: Strengths: By far the biggest strength of Southwest Airlines is the ability of the company to offer reliable low-cost prices; they are also able to maintain lower operating cost which enhances its profitability. They were the first to introduce online booking, ticket less traveling, and no reserved seating, thus making it easier to turn around flights. The teamwork and efficiency within the company’s employees is widely recognized as one of the reasons...

Words: 1682 - Pages: 7

Premium Essay

Corning Incorporated: an Network of Alliances

...Southwest Airlines Corporation In 2001, Southwest Airlines Corporation’s (Southwest) year-end results marked 29 consecutive years of profitability. Southwest, which was incorporated in Texas, commenced customer service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities: Dallas, Houston, and San Antonio. The company grew to become the fourth largest U.S. airline (in terms of domestic customers carried). In 2002, it boasted a fleet of 366 Boeing 737 jets. Southwest was the United States’ only major short-haul, low-fare, high-frequency, point-to-point carrier. (Refer to Exhibit 1 for five-year financial highlights.) Southwest had the lowest operating-cost structure in the domestic airline industry and consistently offered the lowest and simplest fares. Southwest also had one of the best overall customer service records. In 2001, the airline had 35,000 employees and generated total operating revenues of $5.6 billion from a passenger load factor of 68.1 percent. Its stock exchange symbol was LUV, representing Southwest’s home at Dallas Love Field, as well as the theme of its employee and customer relationships. Fortune magazine consistently recognized Southwest as one of the top 10 businesses to work for in the U.S. and one of the most admired companies in the world. Among airlines, Southwest ranked on top as the most admired airline worldwide from 1997 through 2001. In 2002, The Wall Street Journal reported Southwest Airlines ranked first among airlines for customer...

Words: 1266 - Pages: 6

Premium Essay

Alabama Airline

...Case Study: Alabama Airlines Alabama Airlines opened its door in 1995 as a commuter service with its headquarter s and only hub located in Birmingham. A product of airline deregulation, Alabama Air joined the growing number of successful short-haul, point to point airlines, including Lone Star, Comair Atlantic Southeast, SkyWest, and Business Express. Alabama Air was started and managed by two former pilots, David Douglas (who had been with the defunct Eastern Airlines) and Savas Ozatalay (formerly with Pan Am). It acquired a fleet of used prop-jet planes and the airport gates vacated by the downsizing of Delta Airlines. With business growing quickly, Douglas turned his attention to Alabama Air’s toll-free reservation system. Between midnight and 6 am, only one telephone reservation agent had been on duty. The time between incoming calls during this period is distributed as shown in Table 15.16. Douglas carefully observed and timed the agent and estimated that the time taken to process passenger inquires is distributed as shown in Table 15.7. All customers calling Alabama Air go on hold and are served in the order of the call unless the reservation agent is available for immediate service. Douglas decided whether a second agent should be on duty to cope with customer demand. To maintain customer satisfaction, Alabama Air does not want customers to hold more than 3-4 minutes and also want to maintain “high” operator utilization. Further, the airline is planning a new...

Words: 449 - Pages: 2

Free Essay

Mio Servuction

...of concepts (40%) * Ability to collect, synthesise and apply information (20%) * Ability to generate appropriate conclusions (10%) * Logical structure (10%) * Communication of information/literacy (20%) Introduction * What the question going to be answered is about * This essay aims to answer… and will refer to… and apply examples from the… industry * Body * Begin each paragraph with the main idea/ topic sentence * This tells the reader what the paragraph will be about * Make sure your reader understands the main idea by EXPLAINING or giving a definitions How to.. * Give some EVIDENCE to support your main idea – the evidence should be a direct quotation or paraphrase and supported by a REFERENCE. * CONCLUDE your paragraph by either * linking back to your main idea * linking forward to the main idea in the next paragraph Conclusion * Conclusions are often hard to construct as you want to do more than just repeat everything you have just answered. * Ensure that you reach an overall conclusion. * This essay sought to answer… The conclusion may include: * a summary of the arguments presented in the body and how these relate to the essay question * a restatement of the main point of view presented in the introduction in response to the topic * the implications of this view or what might happen as a result. Some aspect of the service Shorter exposure to...

Words: 5852 - Pages: 24

Premium Essay

Knowledge Management

...median age of its 13,000 remaining employees was 48. Because most of its workers retired well before age 60, this meant that over the next ten years the TVA, the largest electrical utility in the United States, was bound to lose many of those it depended on to run its nuclear, coal-fired, and hydroelectric power plants efficiently and safely. Those employees, and the knowledge they embodied, would be hard to replace. Changing workforce demographics, marked by an aging labor force, more competitive recruiting, and faster turnover among younger employees, are creating unprecedented knowledge-retention problems in many industries, threatening to reduce the capacity for innovation, growth, and operational efficiency. A recent study of 26 firms conducted by the Accenture Institute for Strategic Change documented the danger lost knowledge poses for organizational performance in the global chemical industry.1 But, of course, operational and institutional amnesia imperil more than just the chemical industry. This article outlines a set of “better practices” that organizations currently are implementing to address these concerns. The practices shared here are not claimed to be “best in class,” because the challenges of knowledge retention are so new that a rigorous comparison cannot be established. At this moment, no I one is ready to claim that they know what “best practices” are when confronting the threat of losing knowledge critical to organizational...

Words: 6363 - Pages: 26

Premium Essay

Jet Blue - Case Study

...JET BLUE - CASE STUDY EBS 5103 STRATEGIC MANAGEMENT Analyzing Strategic Management Cases “JETBLUE AIRWAYS” UFUK CANDAR FOYA BAHÇEŞEHİR UNIVERSITY Table of Contents INTRODUCTION 3 BRIEF SUMMARY 3 ENVIRONMENTAL ANALYSES: 4 VALUE CHAIN ANALYSIS: 10 FINANCIAL ANALYSIS: 13 SWOT ANALYSIS: 19 SPACE MATRIX: 21 TOWS MATRIX: 24 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM): 25 CONCLUSION: 26 INTRODUCTION Within case analysis assignment, the JetBlue case is analyzed strategically in this document to set answers for following basic questions: * To make a set of recommendations based on the analysis, * To describe exactly what need to be done for success, * To explain why the proposals will solve the problems, * To suggest how best to implement the proposed solution After giving a brief summary regarding the case of JetBlue has and drawing a general picture of the company, several strategic analysis methods will be used to analysis JetBlue. BRIEF SUMMARY The economic downturn in the late 1990s and 9/11 terrorist attacks in 2001 have severe consequences on airline industry. The demand for air travel dropped and led to decrease in flights and revenue. The security costs increased. Airlines significantly reduced capacities. As a result low-cost strategies with new route services became important. Rebounding of economy by the end of year 2003, the demand for business and leisure travel was expected to grow in low-cost competition...

Words: 7569 - Pages: 31

Premium Essay

Strategic Allia

...STRATEGIC ALLIANCES IN THE GLOBAL AIRLINE INDUSTRY Abhishek Goel1 Abstract Strategic alliances are common to any industry. Their presence is felt quite significantly in the airline industry. Starting in the US in 1978 deregulation of airline industry has since brought about sea changes in functioning of the industry. This paper attempts to understand the developments and strategic alliances that have occurred in the airline industry since deregulation. These strategic alliances exist in various forms and differ widely in scope and no consensus on classification was found. The advantages and disadvantages of strategic alliances with respect to the airline industry have been discussed. It is felt that the industry is getting increasingly concentrated. However, no conclusive remarks can be made about consumer welfare. “Airline Business Alliance Survey of 2000 reports that there are 579 alliance agreements in place, up from 280 agreements (more than double) in 1994 when the survey was first conducted. Five major alliances (Star, Oneworld, Qualiflyer, Sky Team, and Wings) account for some 60 percent of all air travel.” (Mason, 2002) The lines above make the issue important enough to understand the phenomenon that is guiding the industry. Almost a decade back Oum, Taylor and Zhang (1993) argued that the airline industry will be marked by strategic alliances and these alliances will be global in nature. The guiding factors will be several that include formation of blocs, resource...

Words: 12277 - Pages: 50