Political, Economic, Legal, and Technological Factors
Delta is ahead of American Airlines in both economic and technical terms, as evidenced by a report comparing pre-flight delay rates and technical coverage (Improving airline operations, 2021). The legal and political aspects of Delta are complicated by the Russian-Ukrainian war and the resulting breakdown of ties with international partners, which did not threaten American Airlines to such an extent.
Social Responsibility, Ethics, and Sustainability
Both companies equally emphasize ethics and cultural diversity, and their messages are equally progressive and humane. Delta’s work and organizational culture are ahead of American Airlines, as the first company gave employees pay raises precisely to motivate workers to give superior performance.
Quantitative Analysis
Delta Airlines’ prevailing real price is ahead of forecasts at $43 per share (Duan, 2022). This is several times higher than the actual and stock prices of American Airlines, which are $16 and $13.50, respectively (Duan, 2022). Delta Air Lines has a market capitalization of $21.28 billion, ranking it among the top 1,000 most valuable companies by total market value (Market capitalization, n.d.). American Airlines falls short in this metric, ranking in the top 2,000 with a cost of $8.27 billion.
The profit margin, calculated as network wealth divided by revenue, measures the company’s financial performance. As of March 2023, Delta Airlines has a negative statistic of -3%, while American Airlines has a more positive statistic with a growth of 6.09% (Domestic market share, n.d.).Delta’s domestic market share is 3% lower than American Airlines’, but one must take into account that Delta Airlines has a larger global market share.
Organizational Aspects and Competitive Advantage
Delta Airlines holds a competitive advantage due to the size of the market it covers. However, American Airlines had a brief advantage in 2021, driven by domestic tourism growth in the United States. American Airlines quickly responded to the pandemic by setting up a mobile headquarters, establishing remote communication, and preparing for a new format of “blended tourism” (Reed, 2021).
As for Delta, it can be said that they aggressively ignored the need for social distancing and sold a large number of assets, which speaks negatively of their response to the new pandemic conditions. American Airlines’ strategic advantage over Delta was its initial focus on domestic travel, which enabled it to meet the growing demand for domestic tourism (Reed, 2021). However, Delta’s respect for its human resources puts it ahead of American Airlines in this measure.
Table 1 – Comparative Assessment of Delta and American Airlines
References
Domestic market share of leading U.S. airlines from January to December 2021 (n.d.). Statista.
Duan, X. (2022, September). Valuation analysis of Delta Airlines based on ROPI model. In Proceedings of the 2022 International Conference on Business and Policy Studies (pp. 124-137). Springer Nature Singapore.
Improving airline operations: KPIs and competitive benchmarking to maintain a comparative edge. (2021). Cirium Aviation Analytics.
Market capitalization of Delta Air Lines. (n.d.). Market Cap.
Reed, T. (2021). How the pandemic changed American Airlines. Forbes.