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American Airlines

Essay by   •  December 24, 2010  •  Case Study  •  2,648 Words (11 Pages)  •  1,378 Views

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While sitting in Atlanta's Hartsfield International Airport, one cannot help but to notice and feel an overwhelming dominant presence of one particular airline. Delta as we know it today, traces its roots way back to 1924. Huff Daland Dusters was founded as the world's first aerial crop dusting organization. In 1928 the company became Delta Air Service, and the following year Delta carried its first passengers over a route stretching from Dallas, Texas to Jackson, Mississippi with stops in Shreveport and Monroe, Louisiana. In 1941, the company moved its headquarters from Monroe to Atlanta, Georgia.

Although headquartered in Atlanta, Delta is a Delaware corporation (Delaware is the most "pro-business" state in the US). Delta Air Lines Inc. provides air transportation for passengers and freight throughout the United States and around the world. As of February 1, 2001, Delta (including its wholly owned subsidiaries, Atlantic Southeast Airlines, Inc. and Comair, Inc.) served 201 domestic cities in 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, as well as 50 cities in 32 countries. With its domestic and international code share partners, Delta's route network covers 218 domestic cities in 48 states, and 131 cities in 58 countries.

When analyzing Delta, you do not have to search very far before quite possibly one its strongest attribute rears its head. Based on calendar 2000 data, Delta is the largest U.S. airline in terms of aircraft departures and passengers enplaned, and third largest as measured by operating revenues and revenue passenger miles flown. Delta is the leading U.S. airline in the transatlantic, offering the most daily flight departures, serving the largest number of nonstop markets and carrying more passengers than any other U.S. airline. Delta Air Lines transports more passengers worldwide than any other airline. Through a vast worldwide route system Delta has flown over 117 million passengers, more than any other airline in the world. Delta mainline, domestic and international service, Delta Express, Delta Shuttle, Delta Connection®, Delta Sky Team and Worldwide Partners operate 6,400 flights each day to over 450 cities in 98 countries.

Not only is Delta a beast in the market it wields its power quite intelligently. Along with this momentous market share, Delta has enormous control over some of the nation's key gateways. Delta controls 72 percent of the air traffic at Salt Lake Utah. This mid west city is a gateway to most of the key major cities on the pacific coast as well as mid west. With the upcoming winter games in Salt Lake, Delta should profit handsomely. In Cincinnati, where Delta is 77.5 percent of the market, the situation is much like that in Salt Lake City. Cincinnati is used as a link between most central states. Delta really flexes its muscle in the south however. By controlling an unbelievable 80% of the air in Atlanta (the nation's second busiest airport) Delta has an unbelievable and almost unshakable grip on most southeastern cities, especially cities in Georgia, South Carolina and dominance in Florida. With this dominance Delta can afford to charge almost 15% more for business travelers than other airlines in these areas.

Like all excellent organizations, leadership must start at the top and Delta is not any different. Delta's motto may be "We love to fly and it shows" but judging from the airline's performance in the early 1990s, you couldn't tell. In 1993, the company employed 73,500 people worldwide. By 1995 that number was down to 59,700. Some of the cutbacks were achieved through early retirement, but most of it came from heavy layoffs. This drastic reduction cost the airline heavily, both in public image and employee morale. At the same time, Delta's on-time performance record, once at the top of the industry, also took a serious fall. Three years and a new CEO later Leo Mullin, Delta is once again ruling the skies. In 1998, Delta posted a record $1 billion company profit. Revenue increased by 4% to $14.13 billion. Delta's stock for fiscal 1997 raised from $82 a share to $129-1/4. The airline came in fourth in on-time performance for the first eight months of 1998.

Success runs downhill. While the promotion process is based on "seniority," entry-level employees say that the "rapid" growth of the company is creating "frequent opportunities for career development." Also, reports one insider, "the best thing about Delta is that after 6 months you may bid for another job anywhere in the company. The main thing is to get your foot in the door." "Most promotions are from within," says another. "Once you are hired there are a lot of place to go within the company." Although one employee reports that Delta hires its new hires primarily as part-time workers, another, who started part-time and quickly became full-time, says, "The culture is one of rapid advancement." Although Delta's pay scales are described as "not impressive," the travel benefits definitely are. Not only do Delta employees receive free air travel for their families, but they also receive certificates that they can use as gifts. They are allowed 12 domestic flights per year and one international, first class of course. In the past two years, all employees were given stock options," reports one employee. "The benefits are wonderful. I pay nothing as a full-time employee for my medical coverage, which is very good," says another. According to one employee, Delta also hands out 5 percent bonuses during healthy financial years. Behind Continental, Delta has the highest employee satisfaction in the industry; it's easy to see why!!

In the communities that Delta has a strong hold on, Delta gives back generous to the community. They are a sponsor for the up coming winter games for example. Delta vision statement states that Delta is "...Delta is preparing youth from many backgrounds and cultures to lead and enjoy the unprecedented opportunities of the 21st century." Delta supports programs that promote youth in three key areas: Wellness, Leadership Development and Cultural Advocacy. To accomplish that mission, Delta commits over $16 million annually to four Signature Partners and other worthy organizations. Also, Delta supports and promotes employee volunteer efforts through our Community Partners program.

Strength that Delta posses are its safety record. The last aerial mishap for this airline giant was in 1997 Delta does not have any real current weaknesses per say. In April of this year, Delta subsidiary, ComAir had a pilot strike. Delta might want to take precautions to ensure that that event does not occur again. All levels and departments appear



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