Atlanta-based Delta Air Lines provides scheduled air transportation for passengers and cargo throughout the United States and around the world. Delta serves over 350 cities in more than 60 countries. Founded as the world’s first crop dusting service in 1924, Delta has grown to become the third largest airline in the world behind United and American.

The firm launched no-frills Delta Express in 1996 to compete with low-cost producers like Southwest and JetBlue. Although a success at first, costs began to rise rapidly in subsequent years. In 2003, Delta’s revised its concept of a budget carrier and launched Song, a brand that subsumed Delta Express shortly thereafter. Most Song routes connect major Northeast cities with Florida leisure travel destinations.

Like other global airlines, Delta was affected substantially by the 9/11 terrorist attacks. As a result, Delta quickly eliminated a number of flights and reduced its workforce.

In 2002, Delta entered into a marketing alliance with Continental and Northwest Airlines that included code-sharing whereby two or more airlines list the same flight as their own to streamline passenger bookings. The alliance also allows for reciprocal frequent flier and airport lounge access arrangements.

Delta currently operates a fleet of over 700 aircraft with U.S. hubs located in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis, New York, and Salt Lake City. Passenger revenues account for over 90% of Delta’s total revenues with cargo and other revenues accounting for the rest.

Delta fell on hard times and sought bankruptcy protection in 2005. The airline emerged from bankruptcy in 2007, acquired Northwest Airlines in 2008, and completed the integration in 2010. Delta has been profitable in recent years, but continues to struggle with increased operating costs, particularly those tied to increases in the price of fuel.

Case Challenges
1. Is Delta positioned well if another terrorist attack involving aircraft occurs in the United States? Explain.
2. As a full-service carrier, should Delta really be concerned with low-fare carriers?
3. Is Delta’s future success inextricably tied to that of its rivals? If so, how can Delta differentiate itself from other full-service carriers?