Delta Airlines

A combination of economic recession and the attacks of September 11, 2001 have caused substantial problems for the aviation industry resulting in an industry decline over the past six years. Ð' All but one of the US major carriers were forced to resort to Chapter 11 Bankruptcy (Pulling). Ð' Delta Airlines has been involved in Chapter 11 proceedings for more than a year now and the end appears to be in the imminent future. A critical stage of the restructuring process is rapidly approaching, which will require impeccable planning, goal-orientation, projection, presentation and execution. To date, Delta’s fight out of Chapter 11 has been marked by ambitious international travel expansion, a goal that is achievable given the right plan of attack (Pulling).

Southwest Airlines has managed to remain profitable throughout the industry recession. Ð' They have seen 27 straight years of profitability and an average annual return on stock of 17.5% (McCaffery). Ð' Their success is evidence of the fact that there is a great deal to be learned from their business operations. Ð' Although Southwest and Delta differ greatly (i.e. Southwest is a low fare airline that focuses on domestic travel while Delta is a major carrier focused on international travel), a number of profound principles that guide their airline are applicable to the Delta model. Ð' It would be considerably beneficial for Delta to re-examine their marketing, expansion, and employee/customer relations’ policies while using the Southwest model as a supplement. Ð' The fact that Delta finds itself in a state of restructuring inherently implies that change is necessary for future success. Ð' The effectiveness of new strategies is contingent upon the fact that they are the correct strategies and Southwest’s success can help to better calculate the projected success of mutually advantageous tactics.

Marketing

Marketing is the distinguishing function of business, which means its main objective is to set a product apart from similar products. Ð' Through marketing, companies strive to achieve name recognition, persona, consumer sentiment and in the end a sale and continued customer loyalty. Ð' Southwest has been hugely successful in appealing to a market segment that is attracted by low airfares, efficient airline service and the “Southwest experience.” Ð' They have utilized slogans, which playfully encompass the aspects they are trying to market (i.e. “Just Plane Smart, “The Low Fare Airline” and “The Somebody Else Up There Who Loves You”) (DELTA SLOGAN). Ð' Ð' More importantly, they have been successful in making their claims tangible to customers. Ð' Southwest promises low airfare and efficient airline service and that is exactly what their customers get. Ð' The most consequential aspect of Southwest’s marketing is the seamlessness with which their “love-based” corporate culture carries over into their marketed persona and vice-versa. Ð' They promise an experience, the Southwest experience, and their customers get one unlike any other offered by the competition. Ð' Southwest’s name has become synonymous with their unique traveling experience characterized by fun and lightheartedness. Ð' The name recognition created by Southwest’s unique persona works to create consumer sentiment about the Southwest product. Ð' This in turn leads to attention and sales, which leads to customer loyalty once the person traveling gets exactly what they paid for. Ð' Ð'

Delta has a great deal of potential in the area of marketing that they have not yet realized. Ð' Little has been done to present Delta’s uniqueness to the public. Ð' Slogans such as, “Delta Gets You There,” “You’ll Love the Way We Fly,” and “Delta Is Ready When You Are,” fail to address any specific marketing goals or unique angles Delta has to offer (DELTA SLOGAN). Ð' Furthermore, they are boring and ambiguous. Ð'

The key to Delta’s marketing potential is the international aspect of the Delta experience, which is beneficial considering Delta is emerging from bankruptcy heavily focused on international travel expansion. Ð' Delta is the largest airline in the world in terms of destinations served and most people are not aware of it. Ð' Currently Delta offers service to 308 destinations in 52 countries across 5 continents (Delta). Ð' Delta flights travel to North America, South America, Europe, Asia, The Middle East, The Caribbean and the only US carrier flights to Africa (Delta). Ð' Also, the fact that they are presently in the process of acquiring routes to China only furthers their international reach (Field).

REACH. Ð' Delta needs to take advantage of their international scope and reach. Ð' Marketing should be heavily aimed in this direction in order to set Delta apart in this regard. Ð' When the consumer thinks of traveling internationally, the first thing that pops into their mind should be Delta’s international scope and reach. Ð' They should not search for an airline that offers service to a particular international destination; they should know that Delta does offer flights to that destination at a good price. Ð' The international emphasis will not take away from Delta’s domestic recognition, but rather, it will make the name, Delta, stand for something specific and recognizable. Ð' The notoriety achieved will only benefit Delta’s domestic business through greater distinction for all of Delta Airlines.

EXPANSION

One of the major problems in the airline industry throughout the past six years has been the debt to equity ratio. Ð' Most airlines have been borrowing money to cover previously existing debt, which does not allow them to borrow for the purpose of expansion, Delta included. Ð' This has forced most airlines to declare bankruptcy. Ð' However, Southwest has been operating using a substantially lower debt to equity ratio in comparison to the industry average. Ð' Southwest currently has a debt to equity ratio of .26 while the industry average is .89. Ð' This allows them to take advantage of the financial limitations of other airlines by moving in on routes that competitors can no longer afford to service (Zacks). Ð' Ð' Ð'

“…we will, as we have stated, continue to progress toward filing our standalone plan by the end of the year, which