If you can add something from this article that would be great
and put it in the References
Delta airlines have faced deeper problems since 1990s which have carried on over the decades. The problems include alliances, labor problems as well as terrorism. Other issues include world’s sagging economies, devalued US dollar and the high cost of fuel. All these problems have finally led to a decreased profit of the airline. The alliance issue was at first very successful. To start with, the airline in the year 1999 acquired the Atlantic Southeast Airlines fully after the purchase of the remaining 80% of stock. The following did tag along the purchase of the Comair that bought at a price of $2.3 million (Delta Air Lines Reports, 2009). The companies happened to have earlier been partners of Delta in Delta Connection program. In mid-2000, Delta together with its partners Air France, Korean Air and AeroMexico did launch a SkyTeam. It was an alliance meant to provide easier connections and more flights for their customers. In 2007, despite the hardship of integration, the alliance (SkyTeam) was the largest alliance of airline constituting 14 partners who ranged from four continents (Anthony, 2010).
The labor problems came about due to the pilots’ expiration of contract in the year 2000. The airline management struggled for months trying to settle the issue. The issue did cost Delta business operations. For instance, it canceled 3500 flights owing to the pilots’ failure to work for voluntary overtime that translates to losses. Terrorism succeeded the delta problem when US was hit by the September 2001 attacks. All the flights were suspended that means that some costs were being incurred due failure/lack of business continuity. When the flights resumed, most people stayed away from flights hence the profit margin was not as usual. The insecurity issue also caused delays due to security checks that had to be done. Delta survived the ordeal by borrowing though it made losses worth $1.6 billion in 2001. The sagging economy and devalued US dollar interpreted as fewer passengers willing to make travels hence the company made less profit over time. The huge costs of fuel cumulated the cost of running the operations. All the above problems have overtime haunted the efficiency in delta operation. The issue of profit margin has thereby been caused by the aforementioned factors (Anderson, 2011).
The first solution is expanding its operations in the international routes as they happen to profitable in comparison to domestic routes. The move can happen by reduction of domestic flight and substitute them with international flights. Some of routes such as transatlantic ones and the Asian have a rapid population which travels in most cases. The routes also happen to have nations that have having an economic growth thus potential high profit zone. China for instance, is one of the fast growing nations in terms of marketing in Asia. The second move that can work effectively for Delta airline is identifying the routes that do not have clients. Most the routes that have empty seats lead to less profits thus they can be come up with an efficient move. Delta can reduce the number of flights in such routes to make sure that fewer seats are empty. The airline can also offer discounts so as to act as attractive measure to wards the route (Boehmer, 2010).
The third move might look obvious but will be effective once implemented effectively. Delta can try and evaluate what clients mostly look for once they are booking for flight. The cabin seating, business elite seats availability on the frequent flown routes and on demand videos among others some areas to look out. Such moves usually are preference when it comes to booking and attract clients towards an airline. Further, it can learn what the other competitors are doing and make an effort to do the same. Competitors might have adjustment some of their operations thus attracting more clients towards them. A competitor might for instance introduce an efficient booking system such as online that is processed in minutes, such a tactic might attract as it can assist in urgent bookings. It is thus effective to have a look on what the fellow competitors are doing. Their moves also can assist on obtaining alternative move to difficulties that may arise in the course of business. Competitors always have a response to issues such as difficult economic times. The competitors further go ahead and implement the moves in their programs. Delta airlines will thus look at the criteria that worked meaning it’s practicable. Such an aspect gives assurance that the move employed to counter an economic crises can work in Delta too (Jacobs, 2011).
Anderson, R. H. (2011). Delta’s Force for Global Good. Retrieved July 8, 2014, from Delta.com: http://www.delta.com/about_delta/global_good/
Anthony,W., Kacmar, K., & Perrewe, P. (2010). Human Resource Management: A Strategic Corporate Information. Retrieved July 8, 2014, from Delta Air Lines, Inc.: http://www.delta.com/about_delta/corporate_information/index.jsp
Boehmer, J. a. (2010, January 28). Business Travel News. Retrieved July 8, 2014, from BusinessTravelNews.com: http://www.businesstravelnews.com/More-News/Articles/Airlines-See-Signs-Of-Slow-Growth,-Delta-Invests-In-Amenities/
Delta Air Lines Reports. (2009, July 22). Retrieved July 8, 2014, from Delta Air Lines: http://news.delta.com/index.php?s=43&item=744
Jacobs, K. (2011, February 17). Reuters. Retrieved July 8, 2014, from Reuters.com: http://www.reuters.com/article/2011/02/17/us-delta-asia-idUSTRE71G6S920110217?feedType=RSS&feedName=innovationNews&rpc=43