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Essay / Analysis of the Delta Case - 1945
Identify the important facts surrounding the case Delta operates globally in 503 cities in 94 countries and is the third largest airline in the United States. In 2003, Delta's daily needs included 7.3 million gallons of fuel, 109,000 meals and snacks, 151,000 bottles of water, 87,000 cans of soda and 219,000 pounds of ice. Its daily operations also required large amounts of information related to areas such as flight schedules, gate information, baggage handling, customer service and tower operations. To compete in the airline industry, Delta needed an efficient workflow. However, accurate advanced planning is nearly impossible due to things like changing economic realities and weather conditions, as well as unexpected maintenance issues. Delta Air Lines operates in a competitive industry. Among its competitors, its two largest were American Airlines and United. To survive in the industry, it was necessary to employ and maintain technologically efficient and advanced systems. However, Delta's operational systems were primarily paper-based; they still used pneumatic tubes to move information and used little Internet. As a result, the company lacked a competitive advantage. The technology it had relied on different departments independently purchasing the technology they needed and hiring their own IT staff. In 1996, Delta was still known for its high airfares, poor service, limited legroom on flights, and its use of outdated and inefficient processing systems. The airline industry has become increasingly competitive with the arrival of low-cost carriers, such as JetBlue. , Southwest and Airtran. These competitors were taking customers away from the big airlines. Delta projects that 40% of its customers choose low-cost airlines, which is a higher percentage than any other airline. In 2002, 80 percent of Delta's market between New York and Florida was taken over by JetBlue. Eventually, Delta's monopoly on the Atlanta and Los Angeles route was lost due to the entry of AirTran and JetBlue. On January 29, 2003, Delta attempted to further segment its market by announcing the creation of Song, an independent subsidiary. Song's goal was to provide the same type of no-frills, low-fare service as Southwest and other low-cost carriers. Delta, however, did not carry out its plan and Song was therefore abandoned. After September 11, 2001, the airline industry experienced a significant decline in travel. Reasons for the airline industry's downfall also include a weak U.S. and global economy, a dramatic increase in fuel costs, fears of terrorist attacks, and a decrease in business and vacation travel...