Transportation Engineering - Delta Airlines

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TRANSPORTATION ENGINEERING-II

DELTA AIRLINES

ABSTRACT

Delta Airlines being one of the most innovative and pioneering airlines, has captured a sizeable market share in today’s aviation industry. The name sounds a ring in almost anyone, once flown with the carrier, since they provide services which are better imagined only in the far flung future when it comes to other carriers. For example, they were the first to introduce stewardesses way back in the ‘60s and ‘70s; the first to operate fully Wi-Fi inflight entertainment modules; the first to venture into computer booking of tickets and boarding pass printing and also the perpetuator of the hub and spoke model, now being aped everywhere. Thus in this term paper, its history, organization, revenue models and fleet and destination numbers shall be discussed, just to present a picture of the magnitude of enviable network & reputation it holds today.

INTRODUCTION

Delta Air Lines, Inc., one of the major US based airline companies, is the sixth-oldest operational airline, headquartered in Atlanta, Georgia. The airline along with its subsidiaries operate over 5,000 flights daily, spanning 400+ destinations in 83 countries on six continents. It employs nearly 80,000 employees worldwide and operates with a fleet of more than 700 aircrafts. The airline's hub at Hartsfield-Jackson Atlanta Airport is the world's busiest airport by passenger traffic (over 91 million passengers per year) and number of landings and takeoffs. Delta Air Lines was the world's largest airline in terms of fleet size in 2011 and scheduled passenger traffic in 2012, and the second-largest in terms of revenue passenger-kilometers flown in 2012. This year, Delta has been named the 2014 Airline of the Year by Air Transport World magazine, marking the first time in a decade that a North American-based carrier has earned the distinction.

HISTORY

Delta airlines boasts a rich history that goes back to 1924. It was founded on May 30, 1924, inMacon, Georgia, and was the world's firstaerial crop dustingcompany. In 1928 C. E. Woolman, lead movement to buy Huff Daland Dusters and on September 13, 1928 purchased it and renamed it to Delta Air Service. The name Delta, referring to theMississippi Delta, was suggested by Catherine Fitzgerald, a secretary who later would rise to the rank of an executive in the company. Not to forget that its been a pioneer in the field of computer reservations as well, when it joined hands with NorthWest to form WORLDSPAN(its indigenous computer reservation system).Some important year wise advancements of Delta Air Lines are as follows:

  • 1930’s: Delta began passenger service
  • Officially rechristened to Delta Airlines Inc.
  • In the year 1941 that the headquarters of Delta moved from Monroe to Atlanta.
  • Delta expanded internationally and entered the computer and jet world.
  • Pioneered hub and spoke system. (1960s)
  • In 1964 the Deltamatic reservation system starts with IBM-7074 computers.
  • 2000- Delta launched SkyTeam, ,with Aero Mexico, Air France and Korean Air.
  • 2008- Delta acquired Northwest Airlines,

ORGANIZATIONAL STRUCTURE

Delta apparently has a seemingly pyramidal hierarchy with its board of directors on top, under the leadership of its CEO. The entire plan gets divided into departments, units, teams, groups and individual employees. The decisions flow top to bottom and the feedbacks are equally well documented bottom to top for taking future decisions. The employees are given stock options and profit shares according to the shares held. They are barred from making unions, since the very early history of Delta. This posed a serious threat of destabilization when the 3.6billion dollar merger with NorthWest took place, since NW recognized the employee unions officially but Delta did not. It was resolved by a graduated transitory organizational change for the designated NW .` Although Delta claims to have always had a family oriented culture, but some older employees think otherwise and go on to state that it has seen many transitions, appropriating with the change in leadership on the top. It is mandatory for all regional executives to send data via MIS(information system).

REVENUE GENERATION

Starting 2009, they have been able to break even and later even been able to give dividends worth over 500mn to its shareholders. It focuses on creating value by reducing costs, fuel hedges, monitoring and borrowing un-patented ideas from competition and rediscovering non-core business segments like catering at ATL airport. It captures market value by charging extra almost for every service, unless one flies first class and customer retention initiatives.

GEOGRAPHICAL AREA OF SERVICE OF DELTA AIRWAYS

Delta Air Lines flies customers to more destinations than any airline in the world. Delta is:

  • The leader in worldwide alliances,including its successful trans-Atlantic joint venture with Air France-KLM and Alitalia and its trans-Pacific joint venture with Virgin Australia.
  • The leading airline in the United States, with service to nearly 250 domestic destinations.
  • A leading global carrier with flights to six continents.
  • Its Johannesburg-Atlanta route, once held the record for the longest commercial flight (currently placed 2nd).

Hub city statistics

These statistics about each of Delta's hubs are current as of February 2014. (Source-wikipedia and www.delta.com). Represented as is and sole responsibility of the publisher(s).)

Domestic Hubs

Si. No.

AIRPORT

DAILY DEPARTURE

DESTINATION SERVED

1

Hartsfield-Jackson Atlanta International Airport (ATL)

960

216

2

Detroit Metropolitan Wayne County Airport (DTW)

450

132

3

Minneapolis-St. Paul International Airport (MSP)

410

136

4

New York City: LaGuardia Airport (LGA)

268

63

5

Salt Lake City International Airport (SLC)

243

86

6

New York City: John F. Kennedy International Airport (JFK)

143

78

7

Cincinnati/Northern Kentucky International Airport (CVG)

101

42

International Hubs

Si. No.

AIRPORT

DAILY DEPARTURE

DESTINATION SERVED

1

Paris-Charles de Gaulle International Airport (CDG)

24

19

2

Amsterdam Schiphol Airport (AMS)

23

20

3

Tokyo-Narita International Airport (NRT)

22

19

OPERATIONAL FLEET

Delta operates the world’s largest fleets of the Boeing 757, the Boeing 767, and the McDonnell Douglas MD-90 of any operators worldwide. In fact, its relationship with Boeing is so strong that it has signed a contract with them starting 1997, under which they’ll only buy Boeing aircrafts for the next 20 years. As of November 2013, the average age of the Delta fleet is 17.1 years; excluding grounded aircraft and those operated by contract carriers. The oldest aircraft in the fleet is the McDonnell Douglas MD-88s averaging 23.2 years. The livery of the fleet has no seen much variation in the basic design, just the fonts and the orientation of the Delta Dual Triangles changes. It has maintained a navy and red colour scheme since many years, representing truly the colours of USA.

ALLIANCE & CUSTOMER SATISFACTION

Delta Air Lines is one of the four founding members of the SkyTeam airline alliance, the other three being Korean Air, Air France, and Aero México. Since the founding of the alliance, many other airlines have joined in numbers, enabling Delta to offer its customers, the freedom to fly to almost 5000 destinations across the world, while booking their trips on the Delta network itself. It has also ensured, a more hassle-free and rewarding experience in terms of seamless transfers and shared rewards systems. The loyalty program for Delta Air Lines is called Sky Miles. It also has corporate and financial tie ups with all major banks and public institutions. Sometimes also offering, one time bonuses and/or double rewards for the holders of those banks’ credit card(s).

CONCLUSION

Thus the above brief on Delta Airlines’ operations and models, gives us a synopsis of what’s its secret to success on such a grand scale…simply perseverance and guided leadership, with a steady expansion. While the prime focus being on keeping the employees and customers happy and serving a wider spectrum of people from across the globe with their trademark innovative services.

REFERENCES

JOURNAL REFERENCES

  • “Modelling the market strategies-a case study on Delta Airlines”

David, F. (2009). Strategic Management (12 ed.). Upper Saddle River, NJ: Pearson

Accessed on 25 March 2014

BOOKS

  • Ch-15 “Developing and Implementing CRM Programs-Delta Airways” ;

“Cockpit Resource Management” Edited by Earl L. Wiener, Barbara G. Kanki, Robert L. Helmreich (c.s. 2005)

IN PRESS ARTICLES

  • iStockAnalyst. (2010). Delta Air Lines, Inc. (NYSE: DAL) – “Q3 2010 Earnings Preview”.

Retrieved from: <http://www.istockanalyst.com/article/viewarticle/articleid/4575447>

(21 March 2014)

  • CNNMoney. (2010). “Fortune 500 2010 World most admired companies”.

Retrieved from: <http://money.cnn.com/magazines/fortune/fortune500/2010/full_list/index.html>

(29 March 2014)

  • “What’s the key to good customer service?”

The Wall Street Journal.

Retrieved from <http://blogs.wsj.com/middleseat>

(30 March 2014)

WEB PAGES

  • “Company-Statements-Slogans” .

<http://www.company-statements-slogans.info/list-of-companies-d/delta-air-lines.htm>

(30 March 2014)

31 March 2014

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