Delta Airlines is an American airline that serves both domestic and international markets. Its headquarters are based in Atlanta, Georgia, and the current CEO/Chairman is Richard Anderson. The Mission for Delta Airlines is –A force for positive change and global good. This mission statement describes how Delta airline strives to provide better services for its consumers both at the domestic and global stage. Delta’s vision or aspiration image is to better the standards of living and environment where their customers reside and work. The slogan for the company is “Delta Airlines, We love to fly, and it shows.” In order to acquire a competitive strategy in the market, Delta airline has three main objectives, i.e. to satisfy the customers, to retain the employees and to increase its market share.
The current airfare ticket for Delta Airlines is high, but it is performing better compared to other major airlines such as Continental and U.S. Air. The Airlines ranks highly when it comes to customer service compared to its competitors. Delta Airlines has been able to grow its revenue gradually from 2012 to 2015, the total revenue for the organization in 2012 was $36.67 billion while that of 2015 was $40.7 billion (NASDAQ.com, 2016). Despite this consistency in terms of revenue, the company has not been consistent when it comes to its profits as they have been rising and falling with 2014 experiencing an all time low profit of $659 million, due to high expenses (NASDAQ.com, 2016). Delta Airlines is currently facing steep competition from other major airlines such as American Airlines and Southwest Airlines. According to information provided by Delta News Hub (2016), Delta Airlines has nearly 80,000 employees, serves 328 destinations as of January 2016, it serves 57 countries, and it has a fleet of more than 800 aircrafts, and carries more than 180 million passengers annually.
The annual after tax earnings for Delta Airline at the end of 2015 was $4.53 billion, while the stock prices closed at $50.69 in December 2015 (Finance.yahoo.com, 2016). The Board of Directors for Delta Airlines is comprised of seventeen members comprising of the CEO, Richard Anderson, as the chairman of the Board, Daniel Carp as the non-executive chairman and the President, Edward Bastian is also a Director in the Board. The Board meets four times in a year but may meet when the need arises. The Board can meet without the management and sometimes they meet informally from time to time (Ir.delta.com, 2016). The organizational structure for Delta Airlines is matrix because it combines the aspects of divisional and functional structures due to its multinational operations. Delta Airlines has the world’s largest Airline hub, which is located in Atlanta, and it has daily departures to 220 destinations.
There are two types of leadership approaches that are currently displayed at Delta Airlines. The first approach to leadership is innovation. The CEO, Richard Anderson, has embraced and fostered innovation in all sectors of the airlines to steer growth. One of the prominent creative decisions made by the CEO was taking a risk of purchasing Philips 66 oil refinery that brought down the cost of jet fuel and also cutting the costs of middlemen (Caulderwood, 2013). Delta Airlines is now able to refine its own jet fuel, which gives it a competitive advantage. The second form of leadership displayed in Delta Airlines is visionary leadership. For instance, the CEO noticed the long lines and waits that are experienced in American airports compared to other international airports and introduced the Terminal 4 at JFK airport to ease up the traffic. The leadership is oriented towards growth as it purchased 49% of Virgin Atlantic to increase its international flights market share.
A SWOT analysis is used to identify the environment of an organization in a micro and macro level. The first strength of Delta Airlines is its posterity or brand. The organization has been operational for almost a century now, and therefore it has a worldwide presence. Its brands presence has been supported by its years of existence and also as the second-largest airline in the United States. The second strength is its strategic merger with Northwest Airlines and also the purchase of 49% of Virgin Atlantic, which has increased both its local and global presence. Delta Airlines has one of the largest hubs located in Atlanta, which has one of the leading airport design and improvement in service technology; this has helped in increasing service delivery, especially in terms of timely delivery of service. Delta’s large size in terms of employees and fleet is a strength because it is able to serve a large number of customers. Delta airline also has various hubs spread across the country and serves various destinations.
Delta airline also has its weaknesses. The company is over dependent in the North American market thus losing potential present in other markets. The overdependence on North America poses a financial risk to the company, especially when the market in the north is not performing well. The overdependence on the North American market has reduced the prominence of the company in the international market therefore reducing its reputation in the international routes. Delta airline faces large obligations in terms of debts and also expenses. The major expense that affects its profitability is its labor expense because of its large workforce. The airline has a large number of pilots whose salary average $100 million in a single quarter.
The first opportunity for Delta airlines is that there is a growing market for aircraft maintenance, repair and overhaul (MRO); this means that the aircrafts will be of better condition and there will be less mechanical problems. The United States regional airline market is growing, and Delta airlines can capitalize on this opportunity. Delta airline has an 18% stake in Orbitz. Orbitz deals with providing online travelling services to businesses and consumers. The consumers who travel with the airline are well aware of the company’s quality services; this increases the airline’s consumer’s loyalty. Delta airline has leverage on SkyMiles. SkyMiles is a program that allows frequent fliers with the airline to earn miles according to the price of their tickets and SkyMiles status. The existing miles accrued by a customer do not expire compared to other airlines (Delta.com, 2016).
One of the threats that the airlines is facing is the shrinking business fliers segment in the previous past which is one of the main sources of income for the airline. Companies have been moving to cheaper alternatives of business travels. The airline industry is highly competitive from both big players and small players. Small airlines provide cheaper fares compared to the big airlines. British airline has provided arrival lounges for business class fliers. Other airlines such as United Airlines provide frequent flights and convenience gates in select cities.
The CEO of Delta Airlines is Richard Anderson. Anderson has a Bachelor degree from the University of Huston and Law Degree South Texas College of Law. Anderson was born in 1955, Galveston, Texas and is married to Sue Anderson and they have two children. His first job was at the Harris County District Attorney’s office as a prosecutor, this was between 1978 and 1987. It was after this that he was employed as an attorney in Continental Airlines and this is where his career in the airlines industry started. In 1990 he moved to Northwest Airlines in the legal department. He later became the CEO of Northwest airlines between 2002 and 2004 before he moved to UnitedHealth as an executive. It is from this position where he was named as the CEO of Delta airlines in 2007 where he is up to date. In 2016, Anderson is making his 9th year at the helm of Delta Airlines. Some of his hobbies include; reading, cooking, vacation with his family and love for history.
One of the major achievements in his career as CEO is the merger of Delta and Northwest airlines, which brought about consolidation in the United States airline industry. He is one of the people with the greatest impact in the airline industry. The second major achievement of Anderson is the purchase of an oil refinery that brought down the fuel prices in the airline. Some of the Awards that Anderson has received include; Best CEO by Barron’s magazine in 2014, ranked in the top 25 list of the most influential industry Executives in 2014 by Business Travel News, Travel weekly’s Lifetime Achievement Award in 2013, Officier De La Légion D’ Honneur in 2011(Delta.com, 2016). Apart from being a visionary and also innovative leader as earlier mentioned, Anderson practices participative leadership as he is known for his high employee engagement. Anderson is also a transformational and charismatic leader as he has been able to transform the company through continuous growth and innovation, which has seen the stock price of the company rising over the years. Anderson has employed a strategy of building a durable business by reducing on the company debts and costs so that the organization can be more stable and flexible.