The airline business has experienced growth and changes in the pastfew decades. The entry of new airlines in the market,new aircrafts development, technology, airline operations, and resources have been major concerns for these businesses. Delta, a primary airline service provider in the United States, operating of more thanfive thousand flights per day, serves three hundred and twenty-five destinations in fifty-two countries on six continents. It has its central and largest hub in Atlanta, with a high number of total passengers anddepartures. Delta Airlines today has improved its customer experience. It is proud to have more first-class seating, in-flight entertainment options, accessible power sources, and available Wi-Fi onboard compared to its competition in the domestic market (David and Frank, 2017, p. 5).
Nonetheless, Delta still needs to carry out analysis internally and externally in the market. In history, Delta has experienced some tough times before and is threatened by the existence of other airlines new or old. Newmarket entrants that offer cheaper tickets in the markets, better airport facilities, top-notch customer service like the Gulf Airlines who have onboard nannies to calm baby passengers, and have invested in fuel-efficient jets.
The objective of This Study
The aim of carrying out this study is to analyze the strengths, weaknesses, opportunities, and threats (SWOT) of the Delta Air Line Inc. and give possible recommendations that can help in improving its operations.
Delta airlines have over the years, increased its revenue investments, increased operational costs, and even experienced growing profits, but that is not all it needs to stay relevant in the market. Performing a SWOT analysis will help them gain more competitive ground in the airline business.
Strengths: Delta Airlines can boast of the best operational performance in the local market. Ranking second, Delta has the best performance regarding flight cancellation, passenger bumping, and luggage handling. They have penetrated a large market,established suitable business structures, and made changes in leadership.
Weaknesses: Delta airlines have had poor technological infrastructures, which lead to numerous losses due to the cancellation of over three thousand flights caused by a thunderstorm at their Alaska hub just on one day. Cancellation caused by computer glitches has also caused them losses in the past years.
Opportunities.Delta airlines can take advantage of the international market, which has limited competition and government restrictions on the domestic markets. This is an opportunity they have and can use it as an advantage to gain more profit margin in the international market.Barriers to entry of newcomers in the hub and spoke is also an opportunity for carriers like Delta airlines because it reduces competition. Reconsolidation has given them the advantage to streamline their operations, offering a cost-efficient structure.
Threats: Delta, even as an old carrier, faces the threat of new entrants in the market.This has seen reduced market share for the entire airline business.Another is the risk is giant airline companies that take up a higher percentage of the international markets, posing fierce competition.Cost structures sometimes may also represent an internal threat to the business. American Airlines, before its merger with the US airlines, was faced with financial duress caused by costs related to labor, facilities, fuel, and fleet (David and Frank 2017 p.12). They declared bankruptcy in 2011; these costs seemed to have been a significant contribution to this situation. The labor market and facilities can be a threat to a well-performing entity like Delta airlines. Such cases create a financial crisis and can lead to crippled operations.
|Strengths||1.Good Operational performance
2.Good management and investments
3.Giving back to society
|Weaknesses||1.Poor technological infrastructure
2.Old model aircrafts
|Opportunities||Government restrictions in the local market.|
2. Stiff competition from giant companies
After analyzing the SWOT factors that affect Delta airlines, the formulation of new strategies is a key recommendation. They can formulate strategic business models. They can use these models to stay relevant and top of the chart. Use structures that will ensure financial sanity and cost-saving.
Theycan implement the newly formulated business models that can be used to strategize new routes, penetrate competitive markets, and expanding into new markets. Not all business models are cost-effective though, some are efficient but not cost-conscious. Even though businesses are advised to invest well if they want to maximize their profits, it does not have to be the most expensive investment there is. Just like American Airlines, Delta can implement cost-saving structures to avoid such experience in their business.These implementations should be cost-effectively and promising reasonable returns.
Lesson learned from this case.
For businesses to have a long operational life span, they have to do time to time internalreview their operations and study the external market. Market changes like new entries, changing business models, change in consumer preference with the trends in the market, price fluctuations are factors that should keep relevant if they change with the changes.
David, R. K., and Frank, T. R., 2017. Delta Airlines Inc. McGraw Hill Education.
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