Delta Case

Introduction

The problem that has been becoming more and more visible in the airline industry is that low-cost carriers are slowly taking over the market share. Since the attacks on 911, the high-cost carriers have been affected the most while low-cost carriers continue to chip away at the market share. There are multiple alternatives available to Delta to attempt to handle the intrusion of low-cost carriers into the market. Alternatives available to Delta are to continue with the status quo, reintegrate Delta Express with the primary Delta brand, introduce a completely new low-cost subsidiary, or completely transform the Delta express brand.

Continuing with the status quo

Continuing with the status quo would mean that Delta would just continue operating as they have for many years. If Delta decides to continue with the status quo, Delta airlines will be a thing of the past in the very near future as low-cost carriers are going to take over the market share. Delta would possibly be able to continue with the status quo if the cash was present to handle some major losses in the next 5 to 10 years but with the 911 attacks and the increasing power of low-cost carriers the losses are going to be too big to handle financially. Just last year delta had an operating loss of 2.4 billion dollars, an obvious sign that the current strategy is not working.

Reintegrating Delta express with the primary Delta brand

Reintegrating Delta express with the primary Delta brand would even be a worse strategy as Delta would give up its share of the low-cost market to competing airlines. The increase in power to the low-cost market will only speed up the inevitable dominance of low-cost carriers, as well as the fall of Delta airlines. This strategy would be a possible idea, but the attacks on 911 have caused the high-cost market to fall, and the low-cost market has simply taken the opportunity to take over the industry.

Introducing a new low-cost subsidiary

Introducing a...