Delta Case

I. Gaps

A. Comparison of Delta’s performance over time: Sales growth

Delta Airlines if the third largest domestic passenger carrier as measured by operating revenue. In 2002, Delta was the second largest domestic passenger carrier in the world in terms of passengers flown. This helped lead to an increase in sales growth. With the unexpected terrorist attacks in September 2001, Delta saw a major decrease in sales, as did their main competitors. With a two-day grounding of all U.S. flights following the attacks, Delta saw an immediate loss of $650 million.

B. Comparison of Delta’s performance over time: Costs

Delta’s costs have increased since 1999, although their costs are relatively low compared to Delta’s competitors.

C. Comparison of Delta’s performance over time: Operating Margin

Delta’s operating margin remained steady throughout 1997 to 2000 with just a small variance. While their sales were steady increasing their operating income was also increasing overtime. When 9-11 occurred, the loss of sales made a huge impact on Delta’s overall operating margin. They no longer had enough money coming in to show a profit.

D. Comparison of Delta’s performance over time: Inc./ASM

The available seat mile directly relates to the airline profitability equation (Income/ASM= [Revenue/RPM x RPM/ASM]—Cost/ASM or Income/ASM= [Yield x Load Factor]—CASM). In 2001 the ASM declines die to the slow sales growth due to 9-11. The graph below shows that the ASM has been lowered because of Delta’s rising costs and declining sales growth.

E. Comparison of Delta’s performance over time: Market Share

Delta’s overall market share has dropped since 2000. Florida’s market share has remained relatively the same since 1998. Even after the terror attacks the market share only saw a very insignificant decline.

F. Comparison of Delta’s performance over time: Other Pertinent measures

G. Comparison of Delta’s performance with other airlines:...