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Delta Air Lines |
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Author: Wikipedia Business Structure
Delta Air Lines, Inc. is incorporated under the laws of the State of Delaware.
As of 2005, the directors of Delta Air Lines are:
John F. Smith, Jr., Chairman
Gerald Grinstein, CEO
Edward H. Budd
Domenico De Sole
David R. Goode
Patricia L. Higgins
Arthur E. Johnson
Karl J. Krapek
Paula Rosput Reynolds
Kenneth B. Woodrow
Of all major U.S. airlines, Delta is the least unionized. As of September 1, 2005, Delta had a total of 52,000 full-time equivalent employees, of which only 18% were represented by unions.
Services
Delta operates three airline brands:
Delta, the "mainline" brand, serves primarily long-haul, high-volume flights and most international services.
Delta Shuttle operates short-haul, high frequency service in a single-class configuration between Boston, New York, and Washington, D.C.
Song began single-class service on April 15, 2003 to compete directly against JetBlue Airways. Song's branding has proven successful in the Northeast-Florida market where it is seen as a "chic" alternative to Delta's mainline brand, placing live satellite TVs at each seat, buy-on-board gourmet meals, and martinis prepared at the passenger's seat. Delta announced in November 2005 that it would fold Song into its mainline operation during 2006. Song was not the financial success that Delta hoped it would be, but the Song brand proved to be a successful laboratory for testing service concepts to be incorporated into the larger Delta operation. It will remain as a brand of service on Delta aircraft, initially for transcontinental and other flights over 1,750 miles.
Separate regional airlines operate feeder flights, under brand-marketing and code share agreements, primarily to Delta hub cities under the Delta Connection banner. These airlines include wholly-owned subsidiary Comair, as well as independent carriers Chautauqua Airlines, Shuttle America (both subsidiaries of Republic Airways Holdings), SkyWest (a subsidiary of SkyWest, Inc.), Atlantic Southeast Airlines (a former Delta wholly-owned subsidiary acquired by SkyWest, Inc. in 2005), and Freedom Airways (a subsidiary of Mesa Airlines). American Eagle, the regional subsidiary of American Airlines, operates some flights in southern California codeshared as Delta Connection flights.
Delta awards the annual Delta Prize for Global Understanding in conjunction with the University of Georgia.
History
Early history
Delta timetable from 1934
Delta Boeing 747, operated by Pan Am, at London Heathrow Airport in May 1974.The company has its roots in Huff Daland Dusters, which was founded in 1924 in Macon, Georgia by several partners including Collett E. Woolman becoming the world's first aerial crop dusting company. Huff Daland moved to Monroe, Louisiana the following year. In 1928, Huff Daland Dusters was purchased by C.E. Woolman and renamed Delta Air Services after the Mississippi Delta, where its route connected Dallas, Texas to Jackson, Mississippi, via Shreveport, Louisiana and Monroe. By 1934, Delta Air began mail service from Charleston to Fort Worth, including Atlanta, Augusta and other stops in Georgia.
In 1941, Delta moved its headquarters from Monroe to Atlanta, Georgia, to center itself along its new route network that connected Chicago and New Orleans to Florida and Ohio which would later become a Delta hub. In the 1950s, Delta began flights from New Orleans to the Caribbean and Venezuela, becoming the number 2 U.S. carrier in the region after Pan Am and Braniff. On May 1, 1953, Delta merged with Chicago and Southern to expand routes in Midwest. In 1955 Delta introduced the "hub and spoke system" where flights are routed to a central point then sent out to other cities. By the early 1960s, Delta's route network stretched to the West Coast, and Dallas was emerging as its second hub city.
Delta was the launch operator of the DC-8, which began service in 1959, and the Convair CV-880 in 1960. The DC-8's graceful swept-wing design inspired Delta to come up with a new logo which incorporated a new red, white, and blue triangle logo (the "widget"). Just a few years later, Delta became the launch operator of the DC-9. By 1970, Delta was an all jet aircraft airline.
1970s and 1980s
In 1970, Delta entered the "wide-body" jet era with the purchase of five Boeing 747s to service its new long-haul high density routes. However, Delta found no need for them and sold them a few years later. Shortly thereafter, Delta leased a small number of DC-10s as a stopgap until its larger order of the new Lockheed L-1011 TriStars could be delivered.
Delta purchased Northeast Airlines in 1972 to strengthen its market share in the northeastern United States. Through the purchase, Delta began its long Boeing 727 operation.
In 1973 the Lockheed TriStar entered service for Delta. Delta placed these aircraft in international service from Atlanta to London in 1978; Frankfurt was added the following year. Delta's fast growth showed in August 1979 when it became the first airline in the world to board one million passengers in one city in one month (Atlanta).
Delta launched its first frequent flyer program in 1981 which became the SkyMiles program in 1995. In 1982, Delta took delivery of their first 767-200, named the Spirit of Delta, which was paid for "by voluntary contributions from employees, retirees and Delta's community partners. The effort, called Project 767, was spearheaded by three Delta flight attendants to show the employees' appreciation to Delta for solid management and strong leadership during the first years following airline deregulation." [1] The airplane remains the flagship of the Delta fleet, and was repainted in a commemorative paint scheme and toured the country to celebrate the airline's 75th anniversary in 2004. [2]
In 1984 the company established its Delta Connection partnership linking local "feeder" airlines that served mid-size population areas to Delta nodes. The same year, Delta began its first flight to Hawaii (Honolulu International Airport) with L-1011 aircraft. That same year, Delta offered the nation's first public air-to-ground telephone system with Airfone, on the L-1011.
Delta was named 'Official Airline of Walt Disney World' in 1985, and their official ride in the Magic Kingdom was Delta Dreamflight. In 1987, Delta merged with Western Airlines and absorbed its large hubs at Salt Lake City and Los Angeles. That year, Delta began flights from Portland, Oregon to Tokyo, Seoul, and Bangkok, the airline's first transpacific routes, using L-1011 aircraft. Through these acquisitions and expansions Delta became the fourth largest U.S. carrier and fifth largest world carrier.
1990s
In 1990, Delta became the first U.S. airline to operate the MD-11 aircraft. Delta's most dramatic expansion came with its purchase of Pan Am's European routes in 1991 which included all north Atlantic routes and the Frankfurt, Germany hub, shortly before Pan Am declared bankruptcy. The purchase gave Delta the largest transatlantic route network which stands to today, and a small group of A310 aircraft that were retired after a few years. Thanks to these acquisitions, Delta became and remains today the leading U.S. carrier across the Atlantic, in terms of passengers carried and number of flights operated. Delta also acquired Pan Am's northeastern shuttle, taking delivery of a number of Boeing 727s, later replaced by 737-800s and 737-300s. This became today's Delta Shuttle.
In 1993 Delta established a codesharing arrangement among other airlines, giving the company access to more destinations. By 1997 Delta began large expansions into Latin America and in 1999 introduced the Boeing 777 into its fleet, greatly increasing possibilities to longer non-stop services.
2000 saw the creation of SkyTeam, a global alliance, initially partnering Delta with AeroMéxico, Air France and Korean Air. Three years later, Delta implemented the largest domestic codeshare alliance with Continental Airlines and Northwest Airlines, and SkyTeam is now the second largest airline alliance in the world. Currently, membership is made up of AeroMéxico, Air France-KLM, Alitalia, Continental Airlines, CSA Czech Airlines, Delta Air Lines, Korean Air, and Northwest Airlines. Delta also has codesharing agreements with Air Jamaica, Avianca, China Airlines, China Southern, El Al Israel Airlines, Royal Air Maroc, South African Airways, and domestic partners Alaska Airlines, American Eagle, Continental Airlines, ExpressJet Airlines, Horizon Air, Mesaba Airlines, Northwest Airlines, and Pinnacle Airlines.
Delta was one of the airlines targeted in the failed Operation Bojinka plot: the conspirators planned to bomb a Delta MD-11 flying from Seoul to Bangkok via Taipei on January 21, 1995.
Delta was a founding partner of the online travel agency Orbitz, which was purchased by Cendant in 2004.
2000 and beyond
Fleet transformation
In an effort to simplify its fleet and capitalize on cross-platform compatibility not only in pilot training but also maintenance, the airline began to retire its trijets in favor of twinjets:
The Lockheed L-1011, for many years the workhorse of the Delta fleet, was replaced in 2001 with the Boeing 767-400 (which was, in fact, designed by Boeing as a specific replacement for Delta's and Continental's L-1011 and DC-10 fleets).
The airline's many Boeing 727's, having begun being retired previously, were completely replaced with Boeing 737-800's in 2003.
Delta operated its last MD-11 flight on January 1, 2004, operating as Flight 56 from New Tokyo International Airport (now Narita International Airport) at 4:45pm. The aircraft arrived in Atlanta at 3:20pm. This concluded the MD-11's relatively short service in the fleet. MD-11 aircraft have been replaced with Boeing 777-200ERs. On September 23, 2004, a Delta spokesperson confirmed plans to sell eight MD-11s to FedEx.
Delta's entire active fleet is now comprised of twinjets, and the airline is the world's largest operator of 767 aircraft.
Continuing Delta's fleet transformation efforts, the airline plans to retire four more aircraft types. According to a report by Aviation Daily[3], Delta is planning to retire its Boeing 737-200, -300, 767-200, and MD-90 fleet. A more recent report by Dow Jones Newswires (article at [4]) states that Delta's previous CFO Michael Palumbo aimed to drop the Boeing 737-200, -300, and 767-200, with the fourth type undecided, being either the MD-88 or MD-90.
Replacement aircraft are currently unknown, although it is expected that the MD-88 or MD-90 will be replaced by a Boeing 737 family aircraft, probably the 737-800. However, in August 2005, Delta announced the 737-300s operating their Shuttle services would be replaced by nine MD-88s from their discontinued Dallas hub and from Salt Lake City, with a consequent rise in capacity (14 seats per aircraft) and provision of premium services on those routes.
On September 7, 2005, Delta announced that it had struck a deal whereby Ohio-based ABX Air Inc. will purchase 11 Boeing 767-200 aircraft from Delta, adding to the one previously purchased through a similar arrangement made in July 2005. The new agreement calls for ABX Air to take delivery of six of the eleven aircraft in calendar year 2006, two in 2007 and three in 2008, with payment due upon the delivery of each aircraft. The total deal is worth $190 million. Delta also announced plans to keep the Spirit of Delta, the company's first 767-200, notably bought by the airline's employees. They plan to donate the plane to the Delta Heritage Museum, and it is currently on a farewell tour around the U.S.A. It retired on March 3, 2006 on flight DL 102 from DFW- ATL. After 2008, when through these arrangements all other 767-200 aircraft will have been sold, the two remaining 767-200s will be sent to the same desert storage location where the majority of the company's L-1011's are located.
Dire straits
As early as 2004, in an effort to avoid bankruptcy, Delta had announced a restructuring of the company that included job cuts, as well as plans for expansion of Atlanta operations by some 100 new flights, making it a 'super-hub' and requiring the airline to spread its flight schedule more evenly across the day. Further, by mid-2004 the airline has announced it would be closing its third busiest hub (Dallas-Fort Worth International Airport), which it did on January 31, 2005. However, 2005 was a year of struggle for the airline, as evidenced by major overhauls in pricing and route systems, as well as financial deals considered by many in the industry and press as desparate.
On January 5, 2005, Delta introduced SimpliFares, a radical transformation of its fare structure, which cut its most expensive fares by as much as 50 percent nationwide and capped one-way domestic fares at $499 in coach class and $599 first class. However, due to continued high fuel costs, the company was forced to raise these fare caps by $100 in July, 2005, to $599 in coach class and $699 in first class. It also launched a system of "same-day confirmed" whereby for $25, a passenger is able to confirm a seat on a different flight instead of standing-by.
Also in 2005, Delta applied to serve a daily non-stop flight from Atlanta to Beijing, China starting in March, 2006, but rights were instead awarded to American Airlines operating from Chicago, and Continental Airlines out of Newark.
On August 15, 2005, in an SEC filing, Delta announced that it had finalized a deal to sell Delta Connection carrier Atlantic Southeast Airlines for $425 million in cash to SkyWest Airlines in an effort to obtain money to avoid bankruptcy. Analysts called the move a desperate one, estimating ASA's worth at around $700-$800 million — a price which SkyWest would not have been willing to pay.
On September 7, 2005, Delta announced that it would cut 26% of its flights at its Cincinnati hub and redeploy aircraft to its hubs in Atlanta and Salt Lake City. The move will ultimately eliminate up to 1,000 jobs in Cincinnati. In addition and in hopes of increasing profit yields, the airline announced further international expansion into Europe and Latin America.
Bankruptcy
Unfortunately for the airline, none of these actions could prevent a bankruptcy filing, and on September 14, 2005, Delta filed for Chapter 11 bankruptcy protection for the first time in its 76-year history. The company cited high labor costs and record-breaking jet fuel prices as factors in its filing. At the time of the filing, Delta had $20.5 billion in debt, $10 billion of which was accumilated since January, 2001. Northwest Airlines' bankruptcy filing on the same day added grist to months of speculation that the two airlines might merge. A major challenge in such a scenario however, would be that unlike Delta, Northwest has failed to simplify its fleet in any meaningful way and as a result, the two airlines' fleets are almost completely dissimilar.
The future
On September 22, 2005, Delta announced the acceleration of restructuring activities, targeting an additional $3 billion per year in cost reductions by 2007. $970 million of this amount will come from debt relief, lease and facility savings, and previously commenced fleet modifications. Non-union workers' salaries will be reduced by a minimum of 9% across the board, with a 15% reduction for executive officers and a 25% pay cut for CEO Gerald Grinstein. Additionally, the company plans to lay off between 7,000 and 9,000 of its 52,000 employees.
As for its route network, Delta plans to alter its structure by reinforcing hub presence in Atlanta, Cincinnati, New York, and Salt Lake City, while at the same time increasing point-to-point routes, reducing domestic capacity by up to 20% while growing more profitable international route capacity up to 25%.
However, on February 24, 2006 Delta, along with Continental Airlines and FedEx, saw future operations to Venezuela severely affected by Venezuelan President Hugo Chavez's decision to restrict flights coming into that South American country from the United States [5]. As of March 23, 2006, U.S. and Venezuelan aviation authorities were able to negotiate a solution to their dispute, likely ensuring that Delta's operations to Venezuela will not be curtailed in the future.
On March 7, 2006, Delta announced expanded service from its prominent hub at New York-JFK. In addition to the expansion of mainline service at the airport, Delta will partner with Mesa Air Group to provide regional flights throughout the northeast under the Delta Connection banner. At the same time the airline announced an expansion to a number of new cities from its Salt Lake City hub like Bellingham, WA and Victoria, British Columbia among others.
Based on all of these new initiatives, Delta projects a return to profitability by late 2007, based on a crude oil price model of $66 per barrel, in contrast to other bankrupt carriers' restructuring modeled on $55 per barrel.
Advertising
Delta has had several different slogans throughout its history:
In 1940, Delta adopted the slogan: "Airline of the South".
In 1968, Delta adopted the slogan: "Delta is ready when you are".
In 1987, Delta adopted the slogan: "We love to fly, and it shows".
In 1995, Delta adopted the slogan: "You'll love the way we fly".
In 1999, Delta adopted the slogan: "On top of the world".
In 2005, Delta adopted the slogan: "Good Goes Around".
Destinations
Further information: Delta Air Lines destinations
Through pending and confirmed routes to Mexico, Central America, Africa and South America, Delta expects a 124% growth in the Latin American market bringing them solidly to the #3 US carrier into Latin America.
In one of its more ambitious initiatives, on February 9, 2006, Delta announced its intention to expand to Africa, with non-stop flights from Atlanta to Dakar, Senegal and from Dakar to Johannesburg, South Africa [6]. The service was approved by the United States government, making Delta the only United States airline to have non-stop service to Africa.
Fleet
Delta operates an all-Boeing (including McDonnell Douglas aircaft) fleet. Delta's Boeing customer number is 32,i.e. 757-232, 737-832, 767-432.
Delta has abolished three-class seating for international flights, replacing first and business class with a single premium class called "BusinessElite" on all 777-232ER and 767-332ER aircraft. By the end of 2006, some of Delta's 767-400ER aircraft will also have BusinessElite seating instead of First Class. First and economy class still exist on all other aircraft types.
Delta Air Lines was one of three carriers (American Airlines and Continental Airlines being the other two) to sign an exclusivity agreement with Boeing in the late 1990s. When Boeing acquired McDonnell Douglas, the European Union forced Boeing to void the contracts. However, both parties have been adhering to and intend to adhere to the terms under a gentlemen's agreement.
Delta Air Lines Fleet (excluding Delta Connection) Aircraft Number Orders Options Rolling Seats Cargo capacity Engine A/V
737-200 32 100 850 ft³ (24 m³) JT8D-15A No
737-300 21 128 850 ft³ (24 m³) CFM56-3B1 No
MD-88 120 142 1,253 ft³ (35.5 m³) JT8D-219 No
MD-90 16 150 1,300 ft³ (36.8 m³) V2525-D5 Yes
737-800 71 51 60 168 150 1,555 ft³ (44.0 m³) CFM56-7B26 Yes
757-200 121 183 1,670 ft³ (47.3 m³) PW2037 Yes
767-300 28 252 3,770 ft³ (107 m³) CF6-80A2 Yes
767-300ER 59 10 5 204 3,770 ft³ (107 m³) CF6-80C2B6F, PW4060 Yes
767-400ER 21 21 285 4,580 ft³ (130 m³) CF6-80C2B7F Yes
777-200ER 8 5 20 5 268 5,656 ft³ (160 m³) Trent 892 Yes
The average Delta Airlines fleet age is 13.1 years old in march 2006.
This list is incomplete; you can help by expanding it.
Retired Jet Fleet Type Year Retired Replacement Engine A/V
DC-8 1988 757-232 JT3D-3B No
CV-880 1973 727-232 CJ-805-23 No
DC-9-10 1972 DC-9-30 JT8D-5 No
DC-9-30 1992 MD-80 JT8D series No
727-95 1977 727-232 JT8D series No
747-100 1976 L-1011 Pratt & Whitney JT9D7A turbofans Yes
McDonnell Douglas DC-10-10 1977/1989* L-1011 / MD-11 CF6-6D Yes
A310-200/300 1994-96** 767-332ER JT9D series / PW4152 Yes
L-1011 2001 Boeing 767-432ER Rolls-Royce RB211 series Yes
727-232 2003 737-832 and, partially, 757-200 JT8D series No
MD-11 2004 777-232ER PW4460 Yes
767-200 2006 indirectly by 757-200 and
767-300 CF6-80A Yes
Information on the Convair CV-880, Douglas DC-9-10, and McDonnell Douglas DC-10-10 were found in archives at the Delta Heritage Museum in Atlanta, Georgia.
*Delta operated the DC-10 twice, once on lease from United before the L-1011s could be delivered, and again when Delta acquired Western Airlines in 1987.
**Delta experimented with Airbus aircraft for two years after aquiring the planes from Pan Am. In the end, they removed the A310 from their fleet because of a plague of technical issues with the model.
Delta Air Lines Fleet prior to the jet era
Up until the late 1960s, Delta Air Lines operated a fleet of propeller operated aircraft, including among others, the Convair 340, Convair 440, Curtiss C-46 Commando, Douglas DC-3, Douglas DC-4, Douglas DC-6, Douglas DC-7, Fairchild Hiller FH-227, Lockheed Constellation, and Lockheed L-100 Hercules. The Curtiss C-46 Commando and Lockheed L-100 Hercules aircraft were operated as cargo aircraft.
Affinity Programs
SkyMiles is Delta's frequent flyer program. Created in 1981 as Frequent Flyer Program, its name was changed to SkyMiles in 1995. Delta also operates the Crown Room Club, a membership lounge with locations at various domestic and foreign airports. Its members have reciprocal lounge access with other SkyTeam members and Delta's other partners.
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