The airline industry is highly competitive and significantly volatile. It requires high capital investment and depends on the movement of people from one part of the world to another. Competition, low profitability margins, customer care requirement and global business dynamics are among the key issues affecting the industry. The industry is affected by any extraneous events such as government regulations, political stability, natural and man-made calamities among others. In the wake of COVID-19 which has affected the global supply chain adversely, the airline industry is one of those worst hit.
Delta airlines is a major player in the aviation industry with significant influence. By 2013, the company had more than 120 million scheduled passengers making it the first runners-up in carrying capacity. The airline is a major player in the tourism industry and as the effects of the COVID-19 becomes apparent, it has also suffered significantly. By April 2020, the number of people who passed through security checkpoint was merely 100000 which is a 95% decline from a similar period in 2019. This is an indication of how the industry has been affected and by extension Delta Airlines. The company has about 700 aircraft prying different routes in all the six continents.
External Environmental Analysis
The airline industry and aviation control is a function of national and international regulations. Delta’s operates across the world in various destinations and thus has to follow regulations set forth in the various destinations. Since these regulations have a political domain, the airline depends most on political stability for ease of doing business. Collaboration between the airline and the host nations aviation authority has helped the airline to remain profitable and be able to operate in different parts of the world.
The aviation industry is depend on the hospitality and tourism industry almost 100% of the times. With the current COVID-19 grounding all operations related to this industry across in the world, Delta is experiencing a hard economic time. Business has dried up completely in some areas in which case the airline flies only eight passengers per day to various destination within the US. The current restrictions do not allow people to move freely or even interact, which have had devastating economic impacts on the airline.
Social and cultural factors are important when looking at the aviation industry. Demographic characteristics of the travellers are important like the need to travel. Middle-class consumers are best known for travelling to various destinations as they look for fun and leisure. The increase in millennial generation is playing a significant role in the aviation industry. Delta airline has over 80, 000 employees who operate in the various sections within the sector. Creating employment has helped the company to be in frontline promoting the symbiotic relationship between the society and the aviation industry.
The development of technology in the world of business is more rapid than in any other time in human history. Aircraft manufacturers including Boeing are looking for technologies that enhance efficiency and convenience in operation. The demand for fuel-efficient aircraft is on the rise as well as those with security systems and automated artificial intelligence. IT is playing a critical role in marketing and relaying of real time information about the airline to the customers as the industry becomes competitive.
The aviations operates under specific legislations which have both local and international implications if violated. Labour laws, environmental and persons’ protection and security laws, as well those that encompass financial disclosure affect the airline industry. Delta Airlines, like other players in the industry must make effort to comply with the set regulations to remain in operation. Compliance or failure to has legal ramification which companies must take care of as they go on with their routine.
The aviation industry affects the environment directly or indirectly. Emissions from the planes as well as waste production during the manufacturing are among the key ways that the aviation industry impacts on the environment. Delta has made significant strides in controlling its CO2 emissions by investing on efficient aircraft.
Internal Environmental Analysis
The company’s financial serves is powerful. Te company enjoys strong position within the airline industry has ensured steady incomes, and revenues. Even as COVID-19 affects earnings, the company’s financial reserves remain healthy.
The company enjoys a bureaucratic model of organization in which managers at various departments control daily operations while strategic decisions are made by board of directors at the headquarters. The vertical model of leadership exists with information from the top most organs to the lowest placed employees at the ground. Delta’s executive arm of management has remained proactive providing employees with morale and motivation to remain competitive in the industry.
The company has aircraft, supplies, and related accessories, buildings at the various destinations and the headquarters where planes land and undergo maintenance. Delta has made significant strides in controlling its CO2 emissions by investing on efficient aircraft.
The pilots at Delta have agitated for better pay since the overall policy is stay un-unionized but gives comparatively higher remunerations for its staff. The company is always open to negotiation with its staff across the economic divide.
Core competencies and competitive advantage
The company has loyal employees who make tough decisions when the company is under threat from external forces such as losses. In 1982 employees went for a pay cut to salvage the company as it was not making profits. Secondly the airline has loyal customers due to its span of operations in different parts of the world. Moreover, the company relies on modern technology to communicate with consumers on various issues. The e-ticketing among other pioneer technologies are something the company is proud of. The company has a strong financial base which it can use at any time to effect mergers and acquisitions, as it did in 2008 during the merger with Northwest airlines. The company utilizes such high resources to increase customer experiences and satisfaction helping it to remain at the helm of business.
The airline is a major player in the tourism industry and as the effects of the COVID-19 becomes apparent, it has also suffered significantly. By April 2020, the number of people who passed through security checkpoint was merely 100000 which is a 95% decline from a similar period in 2019. This is an indication of how the industry has been affected and by extension Delta Airlines. The company has about 700 aircraft prying different routes in all the six continents.