Mitchell Sorensen

Econ. 1010-401-Wilson
2014.8.4
Term Paper: Black is the New Red
The unveiling of a new logo, a simle !esign which ever so
slightl" change! from the rior, was one of man" !ecisions that woul!
change the coman"#s future. $elta %irlines unveile! a new logo on
%ril &0, 200', a re! scheme!, &$ (wi!get) that woul! start them on a
series of events to ull them even further awa" from a recent
*an+rutc" emergence. %fter "ears of struggle to ma+e ro,ts, in 200-
the coman" ,le! for .hater 11 *an+rutc", a *an+rutc" in which a
coman" continues to run *usiness, as arove! *" the court, on the
terms of a restructuring lan ut forth *" sai! coman". This was not
the ,rst time an airline fell un!er such circumstances, an! it certainl"
wasn#t the last. Man" other ma/or 0.S. carriers, such as 0nite! %irlines
an! 1an %m, the latter not as fortunate to survive, have ,le! for a
chance to still live. While most airlines eventuall" ,le *an+rutc",
$elta has manage! to come *ac+ on to through man" changes, such
as changes in their structure, mar+eting an! ro!uct !eveloment to
increase !eman!, an! a merger with another airline to create one of
the worl!#s largest airlines that others feare! woul! *ecome a
monool".
%n airline is one of the more comle2 in!ustries to run. With
alwa"s changing factors of ro!uction, anal"sts an! e2ecutives wor+
aroun! the cloc+, constantl" ma+ing changes to hel *oost ro,ts.
$elta ha! to !o /ust that in or!er to hel them sta" a3oat. 4ne wa" in
which an airline increases ro,ts is to con!ense multile 3ights to one
!estination an! utili5e those airlanes to *etter serve other areas, or
get lease out the lane. %s marginal costs for one more assenger in
an airlane are ver" low, !ue to the ma/orit" of oerational costs *eing
,2e!,
1
$elta nee!e! to ,n! routes that ha! emt" airlane seats, an!
swa airlanes with another route that ha! oversol! tic+ets in which
assengers coul!n#t ,t, or cut out the 3ights altogether, resulting in /o*
losses on *oth the groun! an! in the air. $elta re!uce! 3ights in
.incinnati, 6entuc+", their secon! largest hu* at that time, *" 278,
while other hu*s oerations, such as %tlanta an! Salt 9a+e .it",
continue! to increase as $elta reevaluate! to the !eman! or such
routes. While this ma" have slightl" hele! the unemlo"ment rate in
areas that increase! oerations, the severe num*er in which the" ha!
to !ownsi5e resulte! in more /o* losses than gains. The" nee!e! to
,n! more wa"s to ma+e a ro,t to regain control.
$eman!, or the a*ilit" an! nee! or !esire to *u" goo!s an!
services,
2
is the !riving factor for an" *usinesses !ecisions. While
travelers ma" *e willing to a" to 3" an! visit gran!ma in ustate new
1
$r. :ean-1aul ;o!rigue, $et. of <lo*al Stu!ies = <eograh" , >ofstra
0niversit", ?ew @or+, 0S% (4erating E2enses of the %irline An!ustr")
httsBCCeole.hofstra.e!uCgeotransCengCch&enCconc&enCairlinecosts.ht
ml
2
Merriam-We*ster $ictionar", $e,nition ($eman!)
"or+ for the wee+en!, or to atten! a *usiness meeting across the
worl!, what are the" willing to a" an! for what services woul! the"
li+e to get out of such a riceD 4ne of the reasons $elta was so
successful in their emergence from *an+rutc" an! a lea! on the
airline in!ustr" in ro,ts was their new in!ustr" lea!ing services *eing
rovi!e!. %ll aircraft in the $elta %irlines 3eet are ro/ecte! to inclu!e
entertainment on !eman! for ever" in!ivi!ual assenger, lea!ing to a
more imrove! 3"ing e2erience. %nother wa" !elta has imrove!
their oerations that will *ene,t assengers, 3"ing wherever in the 7
continents that $elta serves, is an imrove! customer-emlo"ee
interaction. The time an! mone" sent on training 1,&00 of their
airort customer service staE in new wa"s to assist assengers when
travel !isrutions arise
&
will eventuall" *e returne! when it !raws more
assengers in. Thin+, when one airline oEers something li+e ersonal
T.F.#s on more 3ights an! a *etter e2erience with emlo"ees, $eman!
for such will go u in this mar+et. %n! if other cometitors !on#t oEer
such a ro!uct, there will onl" *e one lace to choose such tic+ets,
eseciall" when the" can *oast the" are the largest airline in the worl!.
4n %ril 14, 2008, a merger *etween 0.S. carriers $elta an!
?orthwest %irlines was announce! an! was oGciall" comlete! in
2010, forming the largest commercial airline in the worl! at that time.
Hecause of %ntitrust laws in lace to rotect consumers from
&
($elta .ustomers to Hene,t from ?ew Emlo"ee Training,
Technolog", Seasonal >iring.) $elta %ir 9ines ?ewsroom, :un. 21, 2012
monoolies *eing forme! *" mergers, congress ha! to review an!
arove the !ecision, which eventuall" asse! as the ,n!ing foun! it
woul! not harm cometition, regar!less of negative testimonies to
congress.
4
Hut now, "ears later, we see a *oost in ro,ts that far
surass those of $elta cometitors I Worl!wi!e. The %irline that
struggle! throughout the coule of !eca!es, has achieve! status as
the most ro,ta*le airline in the worl! with a net ro,t in 201& of J2.'
Hillion
-
- setting a recor! for the in!ustr".
$elta %irlines *eing on to an! re,ning themselves through the
har! times of *an+rutc" have roven to gain much *usiness an!
customer lo"alt". Their man" !iEerent *usiness !ecisions to cut costs
in one area or several have certainl" ai! oE. The" have set the *ar
an! increase! !eman! for certain ro!ucts an! still loo+ for wa"s to
continue ro!uct !eveloment, whether it#s through *etter airlane
a!vancements or customer service interactions. The" also create! this
status Kuo of an airline in!ustr" where mergers are a *ene,cial wa" to
ull "ou from *an+rutc". %fter their merge, all other ma/or 0.S.
carriers have merge! with one another to comete with one another.
The" !e,nitel" have esta*lishe! a goo! ro!uct for the !eman! of the
4
(.ongress E2amines <iant %irline Merger) Heth Hraverman,
.??Mone".com contri*uting writer
httBCCmone".cnn.comC2008C0-C14CnewsCcomaniesCairlineLmergeC
-
($elta Tos 9ist of Most 1ro,ta*le %irlines in 201&) :ason 9ee, $eseret
?ews, %ril 17, 2014
airline mar+et. $elta is surel" to continue rising an! !o as their slogan
sa"s I (6ee .lim*ing.)