1. Introduction: Delta airlines was founded in 1924, in Macon, GA. Their founding stood for safe and reliable air transportation, distinctive customer service, and hospitality from their heart. Delta’s vision is built on its traditions and always ready to meet their customer’s’ expectations while taking the service to even higher levels of excellence. Delta’s Air Line mission statement: “We — Delta’s employees, customers, and community partners together form a force for positive, local and global change, dedicated to higher standards of living and the environment where we and our customers live and work.
Creating the world’s greatest airline. Delta desires to achieve this goal by focusing on the safety for the customers, working as a team, and having a stable financial profit. Furthermore, Delta airline has done a lot for the global good. According to their website, Delta airline supports the world in six aspects: education, culture, health, veterans, global diversity and environment. All these respond to their mission statement: positive local and global change.
2. Product definition: Delta airlines offers flight services to over 325 destinations on six continents. Customers can easily access their itinerary, make changes or check-in online or through the Delta application. Delta also provides various money-saving programs such as the e-Certs and Award ticket. To reward their loyal customers, Delta Airlines offers the SkyMiles program, which allows their member to get a complimentary upgrade to Delta Comfort based on availability purchasing a main ticket and opting for a Delta Comfort upgrade.
The Delta comforts provide more legroom and on select longer flights, and extra recline. Premium snacks and complimentary Starbucks, beer, wine and spirits are provided on most flights. Wifi is available with complimentary pillow, blanket and sleep kits on certain transcontinental flights and long haul international flights. Delta also provides the Delta One, Entertainment/Movies, First Class, Main Cabin, Meal Service, Sky Magazine, Special Meal Requests (SPML).
Other programs & Services they provide are Latin America Travel Guide, Basic Economy, Charter Flights, DASH- Delta’s Small Express Package Service, Delta Cargo, Delta Meeting Network, Delta Mobile Apps, Delta Private Jets, Delta Shuttle, Delta Sky Club, Delta University, Delta Vacations, Delta Universal Air Travel Plan (UATP), SkyBonus, Skyteam Global Meetings, and Trip xtras. They also provide other special services for those with disabilities. For example, they provide wheelchair services, unaccompanied minor service, peanut allergy policy, onboard medical oxygen, etc.
3. Macro environment: Delta Airline is the 2nd leading in the global market. In the US domestic market, they have 18. 3 % market share. The SkyTeam alliance has 25% of global market share. Delta airlines invented the hub and spoke model in 1955. It uses the main airport to direct its passengers and have wide variety of routes and destinations all over the world. The principle is to route these passengers to major hubs before connecting to the destinations. It is very efficient to use the scare of the transportation resources. However, the con of all this is that the airport depends on it.
Making the structure very costly. The political and legal issues that Delta Airline faces are the new potential entrants in the market. There have very high regulation of the airline industry. The Airlines Deregulation Act of 1978, passed the law removing the U. S. Federal Government controlling the things such as routes, market entry of new airlines, introducing a free market in a commercial airline industry, and fares. With this, this will help keep the oligopoly of this market. With the 9/11 attack, our security levels sky-rocketed raising red-flags nationally and internationally.
Due to this incident, our economy was affected by a recession globally. The cost of fuels were very unpredictable. Which lead to the low-cost companies pricing the fares to be lot cheaper. As time past, when economy was doing lot better, the forecast of the growth of the airline started to climb up. It started booming more and new market started opening in Asia. As technology advances, there are far less travel agencies. The third-party companies are taking over the internet which makes it easier to compare prices with other airlines. Thus, making it even easier to make reservations/check in.
With the popularity in technology, the demands are growing for wifi and movies during flight. This is more convenient for the customer, because they can pay for the product they need, sitting in their seat. Going green is also climbing in popularity because it is another segment that people are paying attention to. The general population are starting to care more about the environment. The new models of planes are consuming less kerosene, speaking relatively less than a car. Delta airlines vowed to make the changes to conserve more energy. As an opportunity, the company can offer more online reservations to the customers across the US.
Delta owns two partially online service for reservation. They also have ownership of 18% of Orbitzt. LLC, which is a travel agency offering travel services to the consumers and business on the internet. The company can capitalize on the growing airline market across the US and international destinations. The airline can use the customer base in the Atlanta and market it across the country, which means the company having low prices will facilitate the consumer to grow. This will capitalize for the growing market which will help with the maintenance, repairs, and overhaul.
There will be 50% increase in the air traffic, which is a good opportunity to catch more consumer as it has kept the price low. Delta also offers the Leverage on SkyMiles, which has no expiration date. They are the only airlines who does this for their customers which attracts more customers who flies occasionally. Although there are positive measures taken, there are still potential threats in the market. This company suffered a lot from 9/11, due to which security expenses increase, but there is still a need for a lot of other equipment for security purposes.
According to IATA (International Air Transport Association) in 2001, the loss of the international airlines is estimated in the 13 million which decreased to 13 million in the 2002. Due to high intense competition, Delta needed new way to keep the customers and gain new ones. With the variable pricing of the fuel, this allows new entrances with lower cost competitors to come up cheaper flights. The high fuel prices, other online flight reservation sites offering low-cost tickets from competitors, not a highly reputable airline in the US, and change in the government policies for international and domestic flights.
It was considered a big loss, which way to form the last two years that forced the Airways to bankruptcy by the U. S. Government. Delta did not recover from 9/11 until 2005. Delta’s reputation was damaged in 2010, by the USNews. com for the worst rated airline. This was a big blow for this big company because image is everything 4. Competitions: Product form competition: Legacy carrier (LC) Delta Airlines sees United Airlines and American Airlines as their competitor, as three of them all provides higher quality airline experience. Strengths:
For Delta Airlines, they have the longest history compared to the other two competitors. Delta Airline’s fleet size is more than 700, which composed mostly by Boeing. They are considered one of the strong airline in the Atlanta and customers in this area prefers choosing Delta airlines compared to the other carriers. They have more than 5000 flights every day which covers more than 250 destinations and that it covers 64 international destination. This company has an excellent customer service and flights. Another advantage the company offers over the few airlines are the low cost.
Compared to other competitors, they have the lowest air cost which is another huge advantage. Most important of all, Delta has strong values, which shows that they believe in customer services and excellent flights. United Airlines, became one of the dominant airlines by merging with Continental Airlines, and they have many other subsidiaries. United Airlines is the largest airline that provide flights from US to Asia, and carry the most passengers to China. United Airlines recently went through a dilemma where they had kicked out a customer, against their will.
In the process, the guest was injured. United Airlines only did not suffer financially, but their reputation was also was affected. Due to the damage of their reputation, many of the clients will turn to other airlines like Delta for means of travel. Since they also go over internationally and domestically, United Airlines will take a big hit from this incident that happened recently. American Airlines is also an airlines has a long history. It has a good customer program, while customer has strong loyalty to this brand. Their onboard entertainment is also remarkable.
Weaknesses: Delta Airlines mainly been focuses on the domestic locations which has been conflicting with the international flights. Due to this problem, the airline has been facing decline of the revenue, which has been putting a huge burden on financially. This problem has been occurring over a long period of time which has been hurting the financially on their brand. United Airlines has weak financial performance over the years. Furthermore, United Airlines rely too much on third-party service provider. Recently, the image of United Airlines is greatly weakened after dragging out a passenger from a overbooked flight.
This does not simply lead to a drop in the United Airlines stock, but also affect customers loyalty towards United Airlines. American Airlines becoming less competitive as the rise of other low-cost carriers (LCCs). Also American Airlines is not in competition in the global market. American Airlines’ profit fluctuates, which weaken the confidence in investing of the shareholders. Product Category Competition: All Airlines (including the LCCS) Low-cost carrier airlines (LCCs) is another category in the airlines industry. The existing airline companies that are in the category are JetBlue, Southwest, Alaska Airlines and etc.
