Delta Air Lines is the biggest commercial airline in the world, considering its capacity and the number of airplanes it operates. The company is the oldest commercial flight airline that is still in service in the world, with the first flight taking off a few years after invention of the airplane. This airline started as a pest controller. It owned one airplane used to spray pesticide on farmlands.
The pest control operations began in 1924, and lasted for a short while before the company turned into a commercial passenger flight airline in 1929. The airplane used for pest controls was turned into a single passenger plane, and was operated in the southern region of the United States (Jones 9). Delta airlines metamorphosed into a modern airline after the Second World War. Comprehensive assessment determines that the airline is the biggest company in its line of business.
Delta Air Lines has undergone rebranding several times throughout its life. The company was founded as Huff-Dalland Dusters, a company specializing in pest control using airplanes. In 1928, an American entrepreneur purchased and rebranded the company. She named the new company Delta Air Service. The company’s name has remained much the same, with little variation even after merging with other companies (Jones 52).
The chief executive officer of the airline is Richard Anderson, while Edward Bastian is the president. In addition, the company is governed through conventional board of directors consisting of thirteen members. The company has a corporate management and particularly avoids combative approach in dealing with its employees (Szurovy 140).
Since the airline owns a number of other smaller companies, it is essentially a conglomerate (Mouawad 14). Hartsfield Jackson international airport serves as the head office for the Delta Air Lines. However, the airline operates other hubs in the United States and most of Europe.
The company gets most of its supplies from the American aircraft manufacturer, Boeing, which supplies most of the aircrafts used by the airline. European plane maker, Airbus, comes second as a supplier. MacDonnell Douglas, which merged with Boeing in the late nineteen nineties, was also one of the major suppliers for the airline. The airline has several other companies supplying foodstuffs and other in-flight requirements.
Delta Air Lines specializes in the aviation business, and has not ventured into any other business line on a major scale. However, the airline has recently ventured into petroleum business after buying a refinery in Pennsylvania. The company cited rising fuel costs as the major incentive that motivated the airline to venture into fuel business.
The fuel business is a processing plant business rather than a manufacturing business. Frequent fuel crises and fluctuating prices have affected the airline’s management and planning. The company is slowly switching to its own fuel supply.
Problems Faced by Delta Air Lines
Delta Air Lines serves all continents and has major operations in Europe, separate from its operations in North America. In the last decade, after the September 2001 terrorist attacks using hijacked aircraft, a combination of factors led to difficulties in the airline marketing (Jones 33). In addition, pilots in have been involved in confrontations over salaries with the airline management.
This problem was compounded by the company’s history of commitment to paying high wages to its staff. However, the airline is a good performer in service provision and employee relations (Szurovy 144). Due to its commitment to its employees and customers, the company does not make as much profit as its size suggests.
For several times, some of the airline’s employees have tried to form unions. To avoid frequent confrontation between the management and the employees’ unions, the company leadership decided to continue to enhance its commitment to the relationship between the employees and the company. The airline exposes itself to a risk of insolvency in case of a major crisis.
Recommendations
Decentralization Of Company Operations
In 2001, most companies affiliated to Delta Air Lines had the word, “Delta”, in their brand name. It is important for the airline to divide its large enterprise into smaller semi-autonomous companies with different brand names.
Justification
In case one of the companies is experiencing financial difficulties arising from the effect of an unpopular brand name, it will not affect the whole enterprise. This will also help to avoid mass defection of loyal customers such as that experienced in 2001. In this case, profit will be generated separately.
Harmonization of Labor Policies
Employees acquired from mergers have their own labor policies. If Delta Air Lines harmonizes the policies that it uses to deal with all employees, it can avoid frequent confrontations between the management and the pilots.
Justification
If one policy is negotiated for all employees, disparities in the relations between the management and sections of the employee community can be avoided. This is because most of the disagreements arise from disparities in the way the employees are treated.
Diversification of Services
To establish security for its stability, Delta Air Lines needs to diversify its services such that its different sections offer varying services to different customers.
Justification
Services offered throughout Delta Air Lines are uniform. In case of poor demand for these services, the company risks insolvency. Diversification and differentiation of services can protect the airline from extreme fluctuations of the level of demand in the commercial airlines industry (Mouawad 16).
Works Cited
Jones, Geoff. Delta Air Lines: 75 years of airline excellence. Charleston, SC: Arcadia, 2003. Print.
Mouawad, Jad. “.Delta-Northwest Merger’s Long and Complex Path.” New York Times 1.May (2011): 16. Print.
Szurovy, Geza. Classic American airlines. Osceola, WI: MBI Pub. Co., 2000. Print.