TOWS DELTA AIRLINES PDF

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Summary

TOWS DELTA AIRLINES Strategic management International Business and Trade...

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SWOT MATRIX STRENGTHS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

WEAKNESSES

Longevity in the market Strong brand reputation Excellent in-flight service Advanced Technology Large customer base Top-rank Loyalty program Massive fleet size DELTA TechOps (DTO)- maintenance team Strong airline partnership Extensive routes Good Financial performance Market Leadership

High Operating Costs Competition with low-cost airlines Equity Investment Losses Cancelled Flights – Operational Issues Discreditable Employee Behaviors Below Industry Current Ratio 7. Lawsuits – non-refund for flight cancellations 8. Inadequate Security Measures 1. 2. 3. 4. 5. 6.

OPPORTUNITIES 1. Growing Air Travel Demand 2. International Expansion 3. Passenger aircraft to CARGO, 4. 5. 6. 7. 8. 9. 10.

repatriation, and charter flights Fleet Simplification Enhanced Travel Experience Technology and Site Development Flight Promos* Pricing Strategies – Ticket Hedging Human Resource Planning Strategy Corporate Social Responsibility

THREATS Highly Competitive Industry Staggering Debt levels Aircraft Engine Failures Massive Drop in Business Travel Workforce Shortage Terrorist Attacks and Geopolitical Conflicts 7. Environmental Laws 8. Bankruptcy 1. 2. 3. 4. 5. 6.

STRENGTHS

SO

1. 2. 3. 4. 5. 6.

Longevity in the market Strong brand reputation Excellent in-flight service Advanced Technology Large customer base Top-rank Loyalty program

7. Massive fleet size 8. DELTA TechOps (DTO) maintenance team 9. Strong airline partnership 10. Extensive route 11. Good Financial performance 12. Market Leadership

(O2, O1, S1, S2, S3, S4, S5, S10, S11, S12)

OPPORTUNITIES 1. Growing Air Travel Demand 2. International Expansion 3. Passenger aircraft to CARGO, repatriation, and charter flights 4. Fleet Simplification 5. Enhanced Travel Experience 6. Technology and Site Development 7. Flight Promos* 8. Pricing Strategies – Ticket Hedging 9. Human Resource Planning Strategy 10. Corporate Social Responsibility

Airlines go global to stay competitive. Delta can attract more international customers by leveraging its strong name and excellent services. As people are starting to travel again, it is a good time for Delta to expand and cater to a larger market resulting in increased profitability and global dominance. (O5, S4, S3, O10) In addressing the interest of young generations, Delta can enhance their customers’ travel experience by using their innovative competency and advanced technology. Also, by providing a comfortable and cleaner atmosphere, which is crucial during the pandemic era, Delta can retain its excellent reputation and gain more customers. (S8, O3, S7) Delta’s strategy has long been to keep older planes and just maintain them well. By having the oldest average fleet age, Delta is in the best position to shrink. Instead of letting aircraft go idle, they could customize the same for cargo, repatriations, and charter operations. Accordingly, this will reduce Delta’s opportunity costs and the risk of impairment. (S5, O8, S2, S1, S9, S11) With Delta’s strong brand reputation, longevity in the market, and strong airline partnership, it would be easy for them to engage in hedging agreements. Recently, in order to address the fiasco confronting the airline industry, the Airbus-owned technology company has developed the Skytra Price Index, which are benchmarks that track the average price of air travel. Ticket hedging will offer Delta a form of protection from the volatility of a designated risk to earnings stability - allowing them to be profitable amidst crisis. (O7, O1, S5, S3, S6, S12) As people are starting to fly again, air travel demand is starting to climb in numbers. With Delta’s large customer base, offering flight promos will be a big hit for leisure travelers. This is in response to the

STRENGTHS

ST THREATS 1. Highly Competitive Industry 2. Staggering Debt levels 3. Aircraft Engine Failures 4. Massive Drop in Business Travel 5. Workforce Shortage 6. Terrorist Attacks and Geopolitical Conflicts 7. Environmental Laws 8. Bankruptcy

1. 2. 3. 4. 5. 6.

Longevity in the market Strong brand reputation Excellent in-flight service Advanced Technology Large customer base Top-rank Loyalty program

7. Massive fleet size 8. DELTA TechOps (DTO) maintenance team 9. Strong airline partnership 10. Extensive route 11. Good Financial performance 12. Market Leadership

(S1, S2, S3, S5 S6, S9, S10, S11, S12, T1, T2, T4, T8) With 92 years of operation and a strong reputable image, Delta airlines really knows how to play the game in the fierce competition it is in. Thru its strategic alliance, which further strengthen its competitive position by allowing wider global reach, new market penetration & gain timely access to scarce resources to enter international markets, it can reach and gain new customers, coupled with its top-rank loyalty program and excellent in-flight services will magnify steadfast customers ergo combating the drop in the business travel rate, consequently, will lead to a greater profit, generating cash to pay off debts, avoid the possible bankruptcy and continuously lead the market and still be among the US big three, in the aviation industry. (S7, S9, S11, T2, T8) Delta airline continues to exhibit good financial performance, and been engaging in operational expense management. With this, extra cash generated from sales and profit and the cash savings can be used to increase its liquidity and to pay off existing debt. Apart from that, the idle and old fleets can be liquidated to generate additional cash flow and use that to pay the debt. Moreover, through strategic alliance, Delta can improve its risk profile that will enable them to lower the debt financing cost. Ultimately, will save the company from the peril of bankruptcy. (S2, S4, S8, S9, T3, T7) To address environmental laws, specifically in terms of carbon footprints, Delta is investing in advanced technology such as the SAF which serves as an alternative to fossil fuel that can reduce emissions by up to 80 percent during its full lifecycle. Moreover, 25% of new aircraft of Delta are more fuel-efficient than before, which consequently reduced carbon emissions. On top of that, Delta’s builds a coalition by partnering with suppliers and other industry participants to drive down the cost and increase the consumption and production of transformative technologies such as carbon-capture technology and an alternative to fuel. (S2, S4, S9, T5) Workforce shortage + advanced technology + strong brand reputation + alliance

To help in addressing workforce shortage, Delta Airlines can use its strong brand reputation in the area of human resource value-led culture, and (S4, T6) Delta airlines security measures using its advanced technology can help in the prevention of terrorist attacks.

WEAKNESSES

WO OPPORTUNITIES 1. Growing Air Travel Demand 2. International Expansion 3. Passenger aircraft to CARGO, repatriation, and charter flights 4. Fleet Simplification 5. Enhanced Travel Experience 6. Technology and Site Development 7. Flight Promos* 8. Pricing Strategies – Ticket Hedging 9. Human Resource Planning Strategy 10. Corporate Social Responsibility

1. High Operating Costs 6. Below Industry Current 2. Competition with low-cost Ratio airlines 7. Lawsuits – non-refund for 3. Equity Investment Losses flight cancellations 4. Cancelled Flights – 8. Inadequate Security Operational Issues Measures 5. Discreditable Employee Behaviors (W1, W3, O1, O2, O3, O4, O8) Financial related weaknesses of Delta cannot be fixed by the opportunities that its market brings. However, the opportunities present could indirectly lessen these said weaknesses. Increasing the revenue of the company by maximizing its market in the growing travel demand by expanding its operations internationally is one step. Also, focusing as well with cargo services, repatriation, and charter flights could improve revenues for it’s in demand and could gain customer trust. Moreover, hedging profit by hedging the ticket prices could offset the high operating cost. Lastly, simplifying its fleet could all the more lessen other costs such as maintenance costs. (W2, O3, O5, O6, O7, O10) In an industry competition, customers are the ones that should be pleased. Heeding to their demands would be the best way to earn their loyalty. Enhancing passengers’ travel experience and providing flight promotions addresses customer needs which then could widen Delta’s market share against its low-cost competitors. Also, appealing to the public such as helping in repatriation and more activities that boost corporate social responsibilities builds a strong connection to customers. (W4, O6, O9) Having operational issues truly holds back a company. From having technical issues to staff shortages, Delta has been reported to be canceling flights. This is indeed detrimental not just only to the company’s profitability but also to its public image. Fixing the problems regarding its site by focusing on accessibility and bugs could help greatly. Additionally, aircraft technicalities should also be developed for a better travel experience. Similarly, there should also be developments regarding human resource hiring and recruitment strategies. Hiring highly effective and efficient workers certainly is an asset. For five efficient people are always better than a fleet of...