Delta Air Lines Case Analysis


Question Description

Read the “Delta Air Lines (A)” case in attach then,

Answer the questions listed below. Submit your answers in a double-spaced Word document, clearly separating out each question and answer.

  1. Why have most airline firms not been able to achieve profitability? (Hint: Do an industry analysis to show how industry structure has impacted profitability in the airline industry, you have to use Porter's five 5 forces Model as a Graph and explain it in Paragraph each force separately).
  2. Why did the major legacy airlines like Delta and Continental not do well but low-cost airlines like Southwest and JetBlue did well in the same industry environment? (Hint – How did differences in the strategies and value chain activities of legacy airlines and low-cost airlines contribute to differences in competitive advantage and performance?).
  3. Why have legacy airlines not been able to imitate the success of their low-cost competitors? Even when legacy airlines like Delta launched low-cost subsidiaries like Delta Express, such strategies have failed. Why?
  4. Mark Balloun’s team at Delta is considering four strategic options (these are listed in the case). Which option would be the most effective strategy for Delta? Justify your answer.

Tutor Answer

School: University of Maryland

Hello, review the attached document and contact me in case you need any changes. Otherwise, good luck in your study and if you need any further help in your assignments, please let me know. Always invite me to answer your questions. ,


Delta Airlines case analysis
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Delta Airlines case analysis

Why have most airline firms not been able to achieve profitability?

One of the reasons that the airlines’ industry has not managed to make good profitability
is the bargaining power of the buyers. The sector comprises of two groups of the buyers, the first
one being the travel agencies and online portals and the second one being individual flyers. The
first group acts as middlemen between the customers and the various agencies. They work with
multiple airline agencies with the intent of giving customers the best possible flights while
making some profits. The second group of buyers includes the people from diverse backgrounds
who buy tickets directly or through the second group of buyers so that they can travel for
business or personal reasons. The bargaining power of each of these groups is high because of
the customers’ sensitivity to the prices. Customers can access information on the onboard
facilities and the costs of flight to their desired destination through the internet. The low flight
costs to attract customers across the airlines because of the customers’ price sensitivity hinders
the airline from achieving full profitability potential.
Secondly, rivaling with the existing players is also a huge hindrance. One of the reasons
that the rivalry in the market has intensified is the stagnation of the industry where the industry
appears as if it is in the mature stage of the business cycle. The number of competitors remains
the same, making it seem like the sector is neither under capacitated or over capacitated. The
sector also experiences high fixed costs, which forces an airline to stay in business for long even
when things are looking tough ahead. The competition also increases because of the complex
nature of the involved products. The price competition due to the industry competition makes it
hard for the businesses to achieve their full potential.



Thirdly, the power of suppliers is high, hindering the industry from achieving its full
profitability. The labor is the most crucial supplier in the industry. The existence of powerful
labor unions which are very organized makes it easy for them to have their way during bargains
on the employment terms and compensation. Besides, such forms of labor like pilots are very
crucial but in low supply.
Threat from the new entrants into the industry also hinders the achievement of the full
business profitability. The power ran...

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Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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