Delta Airlines Swot Analysis Essay

1025 Words5 Pages

Q3 - OE_Strengths What do you see as Delta’s particular strengths? "Their focus on returns on invested capital. Their management team. The variable expense structure that they 've created over the last seven years. Its relatively smaller penetration of unionized labor. Its leading presence at some of the strongest airport hubs in the country, namely Atlanta, JFK and LaGuardia. Its partnerships with international carriers as a way to decrease the capital intensity of running international, directly operating a greater number of international flight frequencies. For example their JV with Air France, KLM, Virgin and then as well as with China Eastern and other Asian carriers, mostly Korean and also Aeroméxico. And their ability to manage CASM-Ex …show more content…

But their ability to be nimble, because they are a legacy carrier, it 's not as easy let 's say, as some of the smaller carriers that are out there. I do have deep insecurity about trans-Atlantic pressures because of significant capacity growth happening in flights across the Atlantic, and I believe trans-Atlantic to be their most profitable region. And then the capacity creep and the capacity expansion by Middle Eastern carriers, is something that deeply bothers me. Their pilot union agreement and what happens on a renewal in a few years also concerns me, because the last round of negotiations showed that the pilots do have the power relative to the management team and interest to the carrier. And their pension. The pension is not a material weakness, but they do have a pension that 's pretty sizable." Q6 - OE_StrategyElements Based on communications from Delta, what are the main elements of management’s business strategy? "They want to operate the world 's most reliable airline. They want to exercise disciplined capacity growth without compromising operating margins and returns on invested capital. They want to generate a yield that is at least 10 to 20 points above their competitive set because they are operating the world 's most reliable airline. They have an astute focus on returning capital to shareholders. They believe that over the long term they can grow earnings per share at a 10 to 15% growth rate while operating at a 17 to 19% operating