The Delta Airlines - Essay Example

Delta Airlines Affiliation Delta Airlines History Delta airlines started as a crop dusting outfit in 1928 in Monroe Louisiana. It was the first professional crop duster in the whole country. It was founded by a man by the name Woolman who became the chief executive officer for more than thirty years until his death in 1966. Woolman moved the Delta airlines headquarters to Atlanta and made it the hub of its operation in the early 1940s. Delta airlines became the first airline to have nonstop flights in from Chicago and Miami, which were discounted during the nights. Delta airlines were well known for their opposition of deregulation but later had no option rather than to embrace it. By 1953, Delta Airlines had expanded into the Southeast and were now serving the citizens and the southern airlines (Fojt, 2006). It took time for them to expand to the Northeast but by the early 1970s, all this was implemented (Partsch & Wellens, 2009). In 1956, they installed radars in all their aircrafts and later launched the Convair 880 jet service in 1960. The most significant strategy that Delta Airline undertook was merging with the Western Air Lines in 1986 that was hubbed in Salt Lake City. For the reason that Delta Airline’s management treated their employees well, they enjoyed amicable relations regarding their labor and a number of union contracts. There was high productivity, high work morale and excellent service that kept customers coming back and sticking to their services. In 1996, the motivated workers made an effort and dug from their pockets to but the company a jet. In 1997, Delta airlines introduced the Boeing 777s and became the first to board more than a hundred million passengers in one year. More advancement was made in the next year when they lay the foundation to include the first international cargo alliance with Swiss Cargo. They also installed automatic defibrillators on all their aircrafts. In 2003, Delta airlines became the first airline in America to provide pre-recorded audio information regarding flights at the gate (Katel, 2008). In 2005, the company filed for reorganization that is provided under chapter eleven of the bankruptcy code of the United States. In the same year, they started more expansions with more routes to the Caribbean and Latin American routes. After the expansions, the management decided to go into Africa and first invested on the Southern African side with flights to Dakar and Johannesburg South Africa. They were able to reemerge from bankruptcy in 2007 after they defeated the takeover by the US Airways. Delta merged with Northwest in 2008 and created a global airline that had operations in most regions of the world (Fojt, 2006). In 2009, Delta celebrated their existence in passenger service and made more plans for expansion. Today, Delta airlines serve more than three hundred destinations in six continents. They in addition have an estimated seven hundred aircrafts with at least thirteen thousand flights per day and one sixty million passengers annually. Strategic Management Before Delta Airlines came into the commercial airline industry, they were well known for being active in the agriculture industry. The company introduced the use of flight crews and stewardess to ensure their services were efficient. They also contributed to the war efforts in the early 1940s. In 1945, Delta airlines began to operate as Delta Airlines Inc., continued to expand their route operations, and formed several partnerships to maintain their run in the industry. They worked hard to establish their name as the best airline services in the United States. The human resource of Delta Airlines strategy helped to strengthen the motivation, skills and opportunities for the airline employees that ensured superb customer care (Delta Air Lines, 2001). Delta was also able to attract many business travelers as a result of the HR strategy that they were implementing. Consequently, challenges such as fuel prices, environmental and economic crisis, Delta airlines have faced challenges in the past decade. They made history in 1998 by carrying more than one hundred million passengers in one year. Delta strategies enabled them to intervene for the problems they were facing between 2005 and 2006. They returned their profits to where they were and made a point of purchasing an extra carrier that increased the fleet and expansion of the destinations. Delta has grown to be named as the largest commercial airline globally. The organizational structure has changed repeatedly since its establishment in order to maintain a competitive advantage despite the blow of bankruptcy that they experienced in 2005. Delta airlines are making more efforts to ensure that they remain a major player in the industry and hold their current market position into the future. There are so many threats in the airline industry that cause the management sleepless nights trying to come up with better services and strategies that will ensure their existence in the industry (Partsch & Wellens, 2009). Delta airlines have taken over the domestic market and were working on taking over the global market within time. There are challenges that may pose threats to the company in the international market, but Delta is putting up all measures to ensure they will be able to intervene for the challenges once they present themselves. IT is complex to handle international business since it is not as easy as carrying it out in the domestic market. There are so may socially, politically and motivated issues that apply and Delta Airlines need to take into consideration all of them and put up the necessary measures. Delta airline’s management has put up different strategies concerning products and pricing. In addition, there are more strategies to partner with other international airline companies to expand their reach into the global market. Delta is ready to conform to the demands of the diverse laws and regulations that differ from coast to coast (Delta Air Lines, 2001). Marketing Strategies Delta airlines face a state of upheaval due to the significance of price trumping other consumer considerations. Since it was founded with the objective of differentiating itself from the other companies in the airline industry, they have struggled to come up with a concise avenue to narrate their story. The management has been keen in investing on the internet to market their services and give information regarding the company. Delta made efforts in 2007 and established a website by the name Keep Delta My Delta that had features of email petitions and engaged the customers against the market battle that had been put up by the U.S airways. More advancement was made when they created a YouTube hit that featured some of their flight attendants. This increased their exposure and demand for their services. Recently, Delta created a website named NewGlobalAirline.com and social network pages in Facebook and twitter that have details of how merging will have significance impact on their consumers, employees and communities of the airlines that come on board. More advertisement is being done on the television channels and billboards with important information for all the consumers (Katel, 2008). The management of Delta Airlines has invested on the digital technology to ensure that they become an innovative marketer. Delta has an overall marketing plan in integrating across networks that enable them to take down volume in one and still ensure consistency in the other. There is much focus in engaging the customers in their services. The customers are catered for in all aspects of flight, airport, phone and online activities. Through digital technology, Delta Airlines offers Wi-Fi to all their consumers that enable them to access and process some requirements on their own. The consumers are kept connected, and passengers are able to compare prices with an excellent customer care service that is available online. Delta airlines have in addition created marketing metrics to make people aware of the things they can provide and those they do not. It has both digital and marketing commerce responsibilities all within a single role. Innovation and exploration are yet another significant marketing strategy that Delta airlines have put into place. They have concentrated on standardizing their operations by use of infrastructure and technology. The future of Delta airlines is definitely bright and promising. They have been innovators with so much customer friendly features that keep their services on demand year in and year out. The most important thing that Delta Airlines’ management focuses on is the preferences of the customer. They make sure that they are on the trends and information is spread through the online services with much emphasis on products and pricing (Katel, 2008). Multi-Generational Organization In overall, Delta Airlines have a profound reputation in the airline industry. Its outstanding reputation comes from the fact that the company places its greatest value on its employees. These employees are charged with the daunting task of providing the clients with excellent services that boost the reputation of the airline company. The long and established reputation of the company has put Delta airline with the task of selecting and recruiting the best employees who have the needed skills and whose attitudes fits best with the culture of the company that is family oriented. The company understands that to maintain its culture is to recruit employees who are from a different generation. The company can sustain itself only using this means of approach. The older generation is believed to be equipped with the value and the skills to be passed to the younger generation. To minimize any generational gap and problems that arise due differences in generational interest, the company engages its employees in frequent training. Through these trainings, the multi-generational employees are taught how to interact. The Airlines have not online invested on training to accommodate the multi- generational employees, but also it has incorporated other human resources strategies to help in boosting its global success. Global Business Delta Airlines are aiming at keeping its customers as part of its top priority. This has been evident since the year 2010. To invest more in the global market, the company announced a huge upgrade on its product so that global customer services can be improved to the modern standards. In expanding its global business, Delta Airlines have focused on maintaining its reputation as one of the largest global Airlines. The company currently boasts as the only airline company to be operating in all continents hence its global business is great as compared to other airline companies. To maintain and improving its global competitive edge, Delta Airlines management and structure has constantly been evolving (Delta Air Lines, 2014) Despite going through tough economic times in the year 2005, Delta has been able to pick up and return to its profitable times and leading global position. Currently, Delta airline is holding its position into the future to be the top most airline service provider. Strategies are underway to improve the company’s margin of profit. Though the company predicts global success in the future, there are current problems that act as a threat to the company including the cut-price competitors and the overheads that are increasing. All these threats must be overcomed by Delta Airlines for it to maintain its global dominance (Delta Air Lines, 2014). Corporate Social Responsibility Delta Airlines management team feels that they owe a lot to the community they do serve. With a response to this, they have adopted several measures to enhance sustainability and cooperate responsibility aspects. It remains a part and parcel of every employee to ensure that they work towards achievement of the objectives of the company while having a desire to give back to the community. The company is committed to ensuring that the environmental patterns remain sustainable and not a subject to pollution. Their operations that they do conduct are friendly to the environment. All the products they utilize minimally pollute the environment. They are responsible in their actions, and they do work with the notion in heart that any action taken has its ultimate consequence. Most significantly, Delta has adopted diverse measures to decrease the emissions that may culminate into the greenhouse effect. They are transparent in their actions (Yamanouchi, 2012). They do ensure that their emissions levels are at the range stipulated by the Environmental boards, and they do follow the protocol to the latter. In essence, Delta Airlines has taken a swift action in pollution reduction through its measures to track their pollution levels, and coming up with a strategic plan to reduce the pollution levels drastically. In line with this strategy, they have come up with various programs. They have also been a participant of key environmental sustainability initiatives, such as an introduction of e-tickets, recycling the aircraft carpets, creation of other commute options and establishment of recycling centers (Assaf, 2009). The commute options aim at ensuring that its employees have a drastic reduction in the distance travelled per session. This prevents any chance of inhalation of poisonous gases that may emanate from environmental pollution. Such gases my pose a risk to their health. Some of the ways they have adopted to enhance commutes include use of teleworking, where their workers do perform their professional duties at home for the duration of time in a month. Additionally, the introduction of a compressed workweek serves to provide a workday off, after working for a few days. Moreover, there is a flexible scheduling for the sale of avoidance of peak traffic hours. The ushering in of the commuter Benefits Program does allow their staffs ensure that the staffs are compensated for the transportation costs incurred monthly. Delta Airlines also host an excellent gymnasium, cafeteria, health unit and well-established restaurants and shopping malls for ease of accessibility to its staff members. Deltas efforts in community empowerment are worth noting. It does possess a drive labelled Force for Global Good. The drive aims at constructing a community that can rely on its own. Some of the key activities incorporated in the program includes advancement of diversity globally, improvement of the community wellness and promotion of culture and art. In the recent times, many parts of the world have shown an escalating rate of lifestyle-related conditions such as diabetes and hypertension. These conditions have claimed the life of many people. Delta Airlines have chipped in to ensure that the trend does not persist. The wellness drive seeks to create awareness of what people need to do to evade from lifestyle conditions. The firm has recorded an impressive result on this campaign. Additionally, the firm has also adopted measures to market the various local organizations and tourist attraction sites, a practical component that has created opportunities to the citizens (Sobie, 2006). The firm has also engaged the community in their work towards creating as a sustainable environment. They have collaborated with Natural conservancy Board in ensuring that deforestation is a past thing. They are active in afforestation and conservation of wildlife. One of the most successful programs is the Delta in-flight Recycling program. The program seeks to collect anything that can be recycled from all the passengers on board. Its launch was in 2007 and the flight attendants have volunteered to be the part of the program. In addition, Delta flight attendants do sensitize their client on the importance of environmental sustainability. Some of the materials collected include aluminum cans, plastic bottles, magazines, newspapers, and cans. The efforts have borne fruits. In between 2007and 2013, the proceeds emanating from the collection did total to 500,000$. They implement the educative program via the use of their monthly Sky magazine; large billboards and screens mounted in strategic places in the airport. Delta has shown impressive application of the federal laws and environmental laws meant for all the companies to put in place with reference to spills, air pollution and other biodegradable and degradable waste. They are also active and timely in publishing of corporate social responsibility reports. The cost of fuel and remuneration of the staffs remain high. In a bid to save on fuel expenses, the firm has introduced a well-orchestrated mechanism of flight planning. There is a smooth flow of arriving and departing aircrafts. It has significantly reduced the waiting time, hence saving on fuel largely. Human Resource Delta airline is committed fully to ensuring that its employees work in an environment free from any occupational health hazard. They have come up with health policies, and programs to combat this. They do use anti-slip footwear during the winter session to prevent falls and slips. All the employees have received training on advanced life support and maintenance of a safe working environment for all the staff members. Each department does hold monthly safety meeting to deliberate on several issues related to staff and client safety. The employees who are extremely vigilant on safety issues are rewarded. This is just the motivation (Delta Air Lines, 2014). Delta Airlines ensure that their staffs do undergo consistent staff training and development at least for a number of hours per year. Performance appraisal process is mandatory for each employee, to ensure that every staff is working towards the achievement of the strategic goals. In addition, even as they work to achieve the strategic goals, they are well compensated. They also enjoy comprehensive medical cover, accounting for dental, medical, surgical, vision and preventive services to chronic conditions. Overview of the employees based on location as at 2013 Geographical location No of staff members United States 74033 (95.4%) Europe, Middle East and Africa 421 (5%) Canada 287 (4%) Asia-pacific 2112 (2.7%) Latin America 792 (1%) Overview of operational divisions Division No of Staff members Customer service 24733 (31.9%) In flight service 18097 (23.3%) Flight operations 11236 (14.5%) Corporate 9117 (11.7%) Technical operations 7727 (10%) Reservations 4979 (6.4%) Cargo 1756 (2.3%) Challenges Facing Delta Airlines Delta Airlines faces challenges similar to those most airlines in the USA. The stiff competition in the market has forced them to lower their prices in order to attract more customers. The Delta airlines spend a lot on labor costs. Their labor spending amounts to 38.4% of all their spending, which is very high as compared to other airlines (Zainaldin, 2014). The prices of fuel have skyrocketed, and they lead to the company having minimal profits. In 2005, the company was declared bankrupt due to the high fuel prices that made the company have debts of over $20 billion(Gritta,2014).In 2013, their spending on fuel amounted to 11.6% which was the highest spending since the company began (Zainaldin, 2014). The prices of oil have continually risen in 2014, and hence the company is expected to experience even lower profits. Technological changes have hampered the growth rate of the delta airlines. Customers are changing from company to company, depending on which company has the latest technologies. The company is, therefore, facing the challenge of investing in new technologies that keep changing within short spans (Zainaldin, 2014). Redesigning workspaces to align new organizational cultures have financially strained the delta airlines. Following their recent mergers, the company has had to train their employees and develop new organizational structures which have taken much time (Gritta, 2014).The company over relies on its two main suppliers which are the Boeing and airbus. Depending on the two suppliers reduces the company’s ability to intensify and increase the number of customers they have. The company also faces the threat of substitutes since all its competitors offer similar services and even some at better prices. USA has minimized the limitation, which was limiting new market entrants (Zainaldin, 2014). The current situation exposes delta airlines to more competition and hence low probability of future growth. The general reputation of the company has been ruined due to its constant battles with the airlines union. However, despite their numerous challenges, they have managed to contain most of their challenges and remain competent. References Assaf, A. (2009). Are U.S. Airlines really in crisis? Tourism Management, 30, 916–921. doi:10.1016/j.tourman.2008.11.006 Delta Air Lines, Inc. SWOT Analysis. (2014). Delta Air Lines, Inc. SWOT Analysis, 1-10. Delta Air Lines. (2001). Delta: Delta.com. Atlanta: Delta Air Lines. Fojt, M. (2006). The airline industry. Bradford, England: Emerald Group Pub. Gritta, R. D. (2014). Bankruptcy Risks Facing the Major US airlines. J. Air L. & Com., 48, 89. Katel, P. (2008). Future of the airlines. Washington, D.C: CQ Press. Partsch, P.-E., & Wellens, V. (January 01, 2009). The Delta Airlines And Northwest Airlines Merger: Potentially Anti-Competitive Co-Operation As A Counterfactual To Assess A Significant Impediment To Effective Competition Under The EC Merger Regulation?. European Competition Law Review, 30, 10, 491-493. Sobie, B. (2006). Delta scoops New York-London rights. Airline Business, 22, 22. Yamanouchi, K. (2012). AIRLINE INDUSTRY: Major carriers close to merger: American, US Airlines could offer Delta benefits, competition. The Atlanta Journal - Constitution. Zainaldin, J. (2014, May). Delta Air Lines | New Georgia Encyclopedia. Retrieved from http://www.georgiaencyclopedia.org/articles/business-economy/delta-air-lines Read More