Transcript: 1970s • Northeast Airlines (merger) Southwest - - - - - - Low differentiation Future of the Industry Air Line Industry History SKY DECK High efficiency and cost cutting James Bayard Brennan Briggs Kendall Finn Lisa Lynch Laura Smith Threat of Substitutes Still not winning over the customers! On-time performance Rate of mishandled bags Customer complaints Reservations Ticketing and Boarding Customer Service Baggage Involuntary Boarding Moderate Bargaining Power Jet fuel price increases 2001-2011 Jet fuel price rose 268% Fair Prices increased only 10% Jet fuel currently accounts for 35% of all costs $.01 increase per gallon of jet fuel costs industry $175M Jet fuel refining is highly regulated Recommendations Jet Blue 1930s Recent Events in the Air Line Industry Intra-Industry Analysis • WORLDSPAN • Purchased Pan Am’s trans-atlantic routes Threats 1960s Delta Opportunities Huff Daland Dusters C.E. Woolman (principal founder) Crop Dusting Delta Air Service - Historical Overview of Industry - Industry Analysis - Intra-Industry Analysis - Future of the Industry - Delta History - Competitive Strategy and Position -Future of the Company -Recommendations Early days of industry (1925-1978) Power of Customer was Low Gov’t regulation meant set ticket fares Assigned routes to airlines Modern Times (1978-Present) Power of Customer is High Deregulation allowed flooding of market 20 entrants by 1980, 40 currently (11 major) More airlines offering more routes Internet increases choices Customers can now shop between airlines for cheapest fares Low customer loyalty Rates have eclipsed safety as the number one factor for choosing airlines A Look Back at 2012 for Delta Airlines SkyTeam 87,000 flights per day Best: Virgin America Worst: United Top Airlines in 2012 Competitive Industry Routes Fares Schedules Services provided Frequent flier programs New Technologies and Innovations In-flight WiFi and power for electronic devices Multiple seating options Entertainment Dining Options On-Board Shopping Smartphone Applications Employees World’s Largest Airline Major Aircraft Companies: Boeing & Airbus Intense competition for market share Consolidation of Major Airlines -soaring fuel costs -lower passenger demand -economic slowdown More Personalized Experience Air Line Industry Recent Performance 1920s Opportunities Strategy: Focus on courteous customer service, Integrate new aircraft, Maintain industry leading safety performance, and control spending. Marketing: Sky Miles, Sky Miles Medallion Currently the Threat of new entrants into the commercial airline industry is low High Barriers to entry Enormous capital requirement Low profit margins 21 bankruptcies since 2001 Deregulation - 1978 Hub-and-spoke system September 11, 2001 Insurance and Security costs Fuel cost increases Transatlantic Flights Airline Advantages Loyal to either Boeing or Airbus Loyal to neither company Aircraft leasing Air Traffic @ 3:05 pm Template by Missing Link Images from Shutterstock.com 1990s Create own low cost subsidaries Industry Analysis Strategy: AirTran Integration, Fleet Modernization, New Interiors, Fuel Hedging Program Marketing: Rapid Rewards Technology: Reservation System Replacement, Inflight Internet Connectivity, Operational Efficiency Delta Strategy Threat of New Entrants •SkyTeam •75th anniversary •Reorganization under Chapter 11 of the U.S. Bankruptcy Code •U.S. Airways takeover overturned (emergence from bankruptcy) •Northwest Airlines (acquisition) •U.S. Airways (merger) Technology Backward Integration Mergers and Acquistions Threats 1980s Strategy: Focus on luring the business traveler, Increase daily departures, Increase markets including Intra-Caribbean flights. Marketing: More Legroom, First Bag Free, TrueBlue Rewards Technology: In-Flight WIFI, Live TV, Mobile App Industry Rivalry • SABRE system • Deltamatic Key Resources and Competencies Power of Customers Alliances and Partnerships Porter's 5 Forces Bargaining Power: Low Moderate threat Main threats: Cars, Buses, Railways Threat exists mainly to shorter distances (<600 mi) Legacy carriers who offer cross country and international flights are less exposed to threat of substitutes. Low Cost Carriers are most adversely affected Main driver: Gasoline prices Differentiation Major Player #3: Arircraft Manufacturers • Delta Airlines Passenger Service High speed railway 1950s Low cost carriers Other major airline acquistions Unions: High bargaining power With regulated cost plus pricing airlines regularly bent to labor union demands Currently FAA regulations allow for Unions to thrive Illegal to hire replacements in a strike scenarios, airlines must bend to union demands United’s low cost carrier Shuttle Issues 2000-Present Delta History Delta Opportunities Founding Member – June 2000 First global airline alliance created around the customer Alliance offers passengers 6,402 flights to 451 destinations in 98 countries The Future of the Industry Domestic and International Flights
Transcript: Extensive background checks on potential employees Installation of cameras in handling areas Security/efficiency monitoring team Teams Super 7 The Problems Technology Security Offer bag insurance through RFID tags Offer ability to track luggage Teams Security Technology Number of handlers Employees stealing Damaged luggage Lack of successful technological implementations Delta Airlines The Journey Cut out middle-men handlers Implement smaller handling teams Offer incentives The Solution
Transcript: Local Red Coat in airports Online at WWW.Delta.com Call Reservations at 800-221-1212 Tweet us @DeltaAssist De Over 15,000 daily flights Amsterdam Atlanta Boston Los Angeles London - Heathrow Minneapolis/St. Paul New York-JFK & LaGuardia Paris - Charles de Gaulle Salt Lake City Seattle Tokoyo-Narita More than 170 million customers each year FORTUNE magizine top 50 World's Most Admired Companies Offers 326 Destinations in 59 Countries on 6 Continents Customer Service - JD Power Certified Vacation Emergency Visit family Work Major Partners Reasons we fly? Where Should We Go? Come fly with us! Why Choose Delta? Missed your flight Emergency cancelation Delayed Flight Lost Bags Air France - KLM Alitalia Virgin Atlantic Skyteam Contact us! DELTA Bumps on your trip?
Transcript: Job Duties and Starting Salaries Engineering Aerospace, Civil, Electrical, Industrial, and Mechanical Finance Supply Chain Flight Operations Corporate Structure Resources Jesscia Bonacci, Brianna Zuccarelli, Karim Recruiting needs at Smeal In 2014, Delta had a revenue of $40.2 billion and a profit of $.659 billion Their products include: Baggage In-flight comforts Delta Sky Club Pet Services Delta Sky Miles Company Size and Locations Delta Airlines Flight attendant- Takes care of on-flight breifings and services. Starting Salary= $41,000 Sales account executive- Looks after clients and their accounts, may also try to obtain new clients. Starting Salary=$59,000-507,000 Senior Business Analyst- Reviews company to find strengths and weaknesses. Uses these to furter develop the company. Starting Salary=$59,000-136,000 Senior Financial Analyst- Speaks with company management and also works with the investments and investors Starting Salary=$58,000-98,000 Culture is a core value that is held by all members of Delta Airlines. "Our Core Values: always tell the truth always keep your deals don't hurt anyone try harder than our competitors-- never give up care for our customers, our community, and each other" (Rules of the Road 1). "Run a financially sound business: have internal, organic growth in revenue of at least 7% and get at lest 5% more revenue Per Available Seat Mile than our competitors across the system. exercise vigilant cost controls to maintain industry leading Cost Per Available Seat Mile below all major carriers. maintain a 40/60 debt to equity ratio which produces, consistently 8-10% pretax returns" (Rules of the Road 2). Delta serves 71 different countries It has 79655 employees It owns 1280 fleets Delta is one of the largest global airlines in the world, and annualy transports 160 million people. Delta Air Lines Inc (DAL.N) Company Profile | Reuters.com. (n.d.). Retrieved October 5, 2015. PRODUCTS & SERVICES. (n.d.). Retrieved October 4, 2015. Search All Jobs. (n.d.). Retrieved October 4, 2015. Senior Financial Analyst Salary (United States) United States Home Change Country Don't see what you are looking for?Get A Free Custom Salary Report ». (n.d.). Retrieved October 4, 2015. People want to work for Delta because it is dedicated to providing the best compensation possible for its customers and employees. Majors that Delta Hires Revenue and Products In addition, it is known as a company that is committed to its employees. Delta is the newest member of the corporate associates program in the Smeal Business College Offers internships to student that are enrolled in 4 year undergraduate or graduate program Opportunities of interning with Delta include hands on experiences in many different possible occupations Why would people want to work for Delta?
Transcript: Need more placeholders for your content? 7 There are risks to this, and it's important to go over them. Let's break down the most obvious ones. 1 Northwest Merger // It's time to meet that goal Get this Prezi Template from: Becoming Debt-Free 4 The Root The Steps Northwest Merger had Delta take on $904 million in debt 2011 Report from managers: "Our susbstantial indebtedness may limit our financial and operating activities" Where are we now? 6 Higher compensation for employees Delta becomes more volatile to the market Fuel Costs, Competitors, Changes in industry We give up more ownership of the firm (as there are now more owners) Share Dilution Right of First Offer Delta wants to reduce net debt to 4 billion by 2020 Start off with offering 100 million dollars in shares Within a year, if it responds well, increase it accordingly 5 It's our stated goal Zoom around and insert your ideas // Increasing Equity Share Offerings "We—Delta's employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work." // What's The Situation? Reducing Debt 2 3 Delta Airlines Better customer service http://prezibase.com Delta has seen an increase in cash flows since 2009, even with higher fuel costs and higher operating expenses We are lowering our leverage ratio each year, and minimizing risk Increase flexibility for manager's
Transcript: Transatlantic Flights Recommendations Delta History C.E. Woolman Sky Team Competitors 1. United Continental Holdings 2. Southwest Airlines 3. American Airlines Delta Core Values Threat of Substitutes High Efficiency and cost cutting 1. Major Player - Labor Unions 2.Major Player - Fuel Supplier 3. Major Player - Aircraft Manufactures Early days of the Industry (1925-1978) Modern Times 1978 Present Porter 5 Forces Industrial Rivalry Company Profile and Swot Analysis Threat of New Entrants Investments in overseas airlines, partnerships Merger with Northwest airlines Low fixed costs History SWOT Analysis Domestic and international flights Delta's employees, costumer, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment of our customers Customer Service Delta Airlines: Service Industry Capital Intensive Labor Intensive High cash flow & thin profit margin Seasonal in business Global Strategy 1. Sales growth rate 2. Operating Margin 3. Price-to-earnings ration Intra- Industry Rivarly: Very High Low loyalty programs Airline acquisitions and alliance Low profit margins Deanna Blackwell & Maria Vargas Destinations Moderated Threat Main Threats: Cars, Buses, Railways Legacy carries who offer cross country and international flights are less exposed to threat of substitutes Low cost carries are most adversely affected Main driver: Gasoline prices 3 Key Financial Ratios Economic Characteristics Delta Airlines Business Model & Operating Model Bargaining Power of Suppliers Alliances and Partnerships Power of customers Delta is a founding member of the Sky team global alliance and participates in the industry's leading trans- Atlantic joint venture with Air France and Alitalia as well as a newly formed joint venture with virgin Atlantic. Founding Member - June 2000 First Global airline alliance created around the costumer. Alliance offers passenger 6,402 flights to 451 destination in 98 countries External Environment Currently the threat of new entrants into the commercial airline industry is low High Barries to entry to entry Enormous capital requirement low profit margins International trade, competition War, terrorism Disease outbreaks Economic cycles Social & demographic factors Technology Corporate Responsibility 1920s -Crop dusting and flying 1930s- Delta began passenger service 1990s Delta becomes a global carrier after purchasing PanAm 2000s- Delta acquires Northwest and launches and sky Team Opportunities 1. Leverage on SkyMiles, Delta is the only airlines to have no expiration date of the extra miles offered 2. Capitalize on growing market for aircraft maintenance, repair, and overhaul (MRO) 3. Delta is well positioned to capitalize on growing US regional airline industry Threats 1. Intense Competition 2. Reputation damage as Delta was rated worst airline by USNews.com 2010 3. Hike in fuel prices Strengths 1. Strategic merger of Northwest Airlines 2. Strong Brand Equity and brand presence 3. Strong hub in Atlanta 4. It has near about 5000 flights every day 5. Has a strong employee force of over 75,000 people 6. A fleetsize of over 700 caters to 250+ destinations Weaknesses 1. Overdependence on the North American market 2. High debt obligations causing financial issues
Transcript: WHERE WAS IT FOUND THE Huff Daland crop-dusting operation,which formed the roots for Delta,founded in Macon,Ga.This was the first commercial agricultural flying company in existence IN 1924. WHO FOUND DELTA AILINES C.E.WOOLMAN ,THE PRICIPAL FOUNDER OF THE DELTA AIRLINES,LEADS MOVEMENT TO BUY HUFF DALAND DUSTERS,RENAMED DELTA AIR SERVICE FOR THE MISSISSIPPI DELTA REGION IT SERVED.D.Y.SMITH,PRESIDENT;C.E.WOOLMAN FIRST VICE PRESIDENT. DELTA AIRLINES
Transcript: Where is the delta headquarters? The headquarters are in Atlanta, GA. An Airbus, Boeing,Candar Regional jet, Embraer, McDonell Douglas are the airplanes that the delta airlines use. What is the average cost of airplane ticket? Who is the current president of the Delta airline? They service over 91 MILLION people a year! What kind of airplanes does Delta use? How many passengers does Delta service yearly? The chief executive officer is Richard H. Anderson, the president is Edward H. Bostian, and the executive vice president Micheal H. Cambell Delta Airlines When did the airline start? How many cities does the delta airlines travel to? The delta airlines started May 30, 1924. 5,000 flights run a day but there is 80,000 workers on duty at the Atlanta, GA airport. The airline ticket is usually the lowest maybe $334 to $11,000 for first class ticket.
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