Can Delta Airline remain a viable business venture in the future given the decline in the U.S airline industry
- Considering the current problems facing Delta Airlines, Helyar (2005) in his review of the organization makes the following observations.
- Organizational Problems.
- Low Cost Carrier Threat.
- Cash and Labor Problems.
- Sell the Airline.
- Restructuring the Organization.
Since the September 11th terrorist attacks, the airline industry has struggled to make notable financial headway. Many of the top carriers in the United States have fallen into bankruptcy or proposed mergers with regional carriers as a means to reduce losses (Fiorino, 2005). Regardless of the specific path chosen for financial development, most of the top airlines have had to live with notable changes to their culture and development. Such is the case with Delta Airlines. Although research clearly shows that Delta Airlines has been able to make strong financial gains while under bankruptcy protection, the tenuous nature of the airline industry, coupled with increases in fuel costs and notable labor problems in the organization have created a situation in which Delta Airlines is currently on the brink of financial collapse (Shields, 2005).
[...] Although Delta Airlines has been a successful airline in the past, it is evident that the organization has not modernized significantly to make it a viable business venture for the future. In addition, it is also evident that even if the organization were to make significant changes that would modernize the business model utilized, there are currently too many competitors in the market for Delta Airlines to be competitive. As such, it is evident that the best possible choice in this case is for management to consider the dissolution of the organization. [...]
[...] As noted by this research, ?Delta has significant overlap with low-cost competitors were weak in its most important domestic markets; it is estimated that AirTran at Atlanta, Southwest at Salt Lake City, and JetBlue in Delta's nonhub markets, have on average a 35% unit cost advantage? (p. 6). With such notable differences in prices offered from airlines at the same hub, it is not surprising to find that Delta Airlines could not effectively compete for a significant market share. Unless the organization makes notable changes to its current organizational structure, it is clear that Delta Airlines will not remain a viable competitor in the airline industry. [...]