Delta Air Lines, Inc. (NYSE: DAL) is a major airline based in the United States[9] headquartered in Atlanta. Delta is the world's largest airline operating under a single certificate, operating flights on six continents across the globe. Delta operates an extensive domestic and international network, spanning North America, South America, Europe, Asia, Africa, the Middle East, the Caribbean and Australia. Delta and its subsidiary Delta Connection operate over 4,000 flights every day.[10] Delta and the Delta Connection carriers fly to 348 destinations in 64 countries. (excluding codeshare)[8] Delta operates the world's largest and busiest hub at Hartsfield-Jackson Atlanta International Airport. It has been the world's busiest airport by passenger traffic and number of landings and take-offs since 1999, serving 88 million passengers per year. Delta is a founding member of the SkyTeam alliance.
On October 29, 2008, Delta completed its merger with Northwest Airlines to form the world's largest commercial carrier. In February 2009, the airline began consolidating gates and ticket counters at airports where both Delta and Northwest operate. The consolidation was completed February 2010.[11] On December 31, 2009, the Federal Aviation Administration granted Delta's request to allow Delta and Northwest to operate under a single operating certificate.
Delta Air Lines, Inc. (Delta) provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company’s route network gives it a presence in every domestic and international market. Delta’s route network is centered around the hub system it operate at airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Each of these hub operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The Company’s network is supported by a fleet of aircraft that is varied in terms of size and capabilities.
Delta has bilateral and multilateral marketing alliances with foreign airlines to improve its access to international markets. These arrangements can include code-sharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office co-location, and other marketing agreements. Its international code-sharing agreements enable it to market and sell seats to an expanded number of international destinations. The Company has international codeshare arrangements with Aeromexico, Air France, Air Nigeria, Alitalia, Avianca, China Airlines, China Southern, CSA Czech Airlines, KLM Royal Dutch Airlines, Korean Air, Olympic Air, Royal Air Maroc, VRG Linhas Aereas, Vietnam Airlines and Virgin Blue Airlines.
In addition to the Company’s marketing alliance agreements with individual foreign airlines, it is a member of the SkyTeam airline alliance. Delta also has frequent flyer and reciprocal lounge agreements with Hawaiian Airlines, and codesharing agreements with American Eagle Airlines (American Eagle) and Hawaiian Airlines. It has air service agreements with multiple domestic regional air carriers that feed traffic to its route system by serving passengers primarily in small-and medium-sized cities.
Through the Company’s regional carrier program, it has contractual arrangements with nine regional carriers to operate regional jet and, in certain cases, turbo-prop aircraft using its DL designator code. In addition to Delta’s wholly owned subsidiary, Comair, it has contractual arrangements with Atlantic Southeast Airlines, Inc. and SkyWest Airlines, Inc., both subsidiaries of SkyWest, Inc.; Chautauqua Airlines, Inc. and Shuttle America Corporation, both subsidiaries of Republic Airways Holdings, Inc.; Compass Airlines, Inc.; Pinnacle Airlines, Inc. and Mesaba Aviation, Inc., both subsidiaries of Pinnacle Airlines Corp., and American Eagle.
The Company’s SkyMiles program allows program members to earn mileage for travel awards by flying on Delta, Delta’s regional carriers and other participating airlines. Mileage credit may also be earned by using certain services offered by program participants, such as credit card companies, hotels and car rental agencies. In addition, individuals and companies may purchase mileage credits. The Company reserves the right to terminate the program with six months advance notice, and to change the program’s terms and conditions at any time without notice.
SkyMiles program mileage credits can be redeemed for air travel on Delta and participating airlines, for membership in the Company’s Delta Sky Clubs and for other program participant awards. Mileage credits are subject to certain transfer restrictions and travel awards are subject to capacity controlled seating. During the year ended December 31, 2010, program members redeemed more than 264 billion miles in the SkyMiles program for more than 12 million award redemptions. During 2010, 8.3% of revenue miles flown on Delta were from award travel.
The Company generates cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft. Delta is a member of SkyTeam Cargo, an airline cargo alliance. SkyTeam Cargo offers a network spanning six continents and provides customers an international product line.
The Company has several other businesses arising from its airline operations, including aircraft maintenance, repair and overhaul (MRO); staffing services for third parties; vacation wholesale operations, and its private jet operations. Delta’s MRO operation, known as Delta TechOps, is an airline MRO in North America. In addition to providing maintenance and engineering support for its fleet of approximately 750 aircraft, Delta TechOps serves more than 150 aviation and airline customers. Its staffing services business, Delta Global Services, provides staffing services, professional security, training services and aviation solutions to approximately 150 customers. The Company’s vacation wholesale business, MLT Vacations, is the provider of vacation packages in the United States. Its private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour.
The Company competes with United Air Lines, Continental Airlines, Lufthansa German Airlines, Air Canada, American Airlines, British Airways and Qantas.
Delta appeared to have adapted well to the expansion-oriented market. Whereas Delta fliers used to joke that, though you might not know whether you would go to heaven or hell when you died, you would definitely have to change planes in Atlanta, the airline's customers could now fly to Europe via its Frankfurt hub, or to Latin America via Miami. As it adapted to the aggressive and expanding modern market, Delta strove to maintain its policies of good labor relations and attention to service. Delta's employees were still among the highest paid in the industry and, like founder C.E. Woolman, Allen sometimes rode on Delta flights to interact with passengers. Indeed, Forbes magazine queried in a 1988 headline: "Is Delta too nice for its own good?" At the time, however, its emphasis on people seemed not to have crippled Delta.
Record Profits, New Problems: Heading into the Twenty-First Century
By 1992 it became clear that the financing agreement with Pan Am had come at a bad time for Delta. The general economic recession and continued high fuel prices, combined with the weight of Pan Am's heavy debt, resulted in net losses of $506 million for fiscal year 1991. In an effort to lower costs, Delta was forced to reduce its work force by five percent, in addition to implementing wage freezes and salary cuts. At the same time, the company was eager to integrate Pan Am's extensive European routes into its system, hoping to restore itself to profitability by improving its position as an international carrier. However, the lingering effects of the recession, as well as the recent Gulf War, had precipitated an overall decline in commercial air travel. To counteract this trend, Delta announced reductions of 45 percent on transatlantic fares at the onset of the summer 1992 season, resulting in record traffic of 8,511,966 passengers in August. In April 1993, in an effort to increase its share of transpacific air traffic, Delta launched new non-stop flights between Los Angeles and Hong Kong.
Initially, the stronger emphasis on overseas routes paid off for the company, leading to profits of $60.4 million in the first quarter of fiscal 1993, compared to a net loss of $125.2 million for the first quarter of the previous year. Inspired by this success, Delta strove to further expand its international presence by entering into code-sharing agreements with a number of foreign carriers in 1994, including Virgin Atlantic, Vietnam Airlines, and Aeromexico. Code sharing allowed an airline to purchase tickets from its rivals and resell them to its own customers, providing greater scheduling flexibility and control over prices. While some considered the practice deceptive, by the mid-1990s it had become prevalent throughout the airline industry, with the number of code-sharing partnerships reaching 389 by 1996. For its part, Delta established 14 such contracts with other airlines between 1992 and 1996.
Another wave of heavy losses in the first three months of 1994 forced the company to undertake a more drastic cost cutting scheme, and in April Delta launched its Leadership 7.5 program, a restructuring initiative designed to streamline operations. The goal was implied in the program's name; Delta hoped to reduce the cost of flying to 7.5 cents per mile, per seat, with an overall aim to cut operating expenses by $2 billion over a three year span. The reorganization called for a reduction of 20 percent of the company's work force, a realignment of its domestic route system, and a discontinuation of some of its less profitable European routes. These drastic measures brought quick results, and the company was able to claim a net profit of $251 million for the fourth quarter of fiscal 1995.
Delta's impressive financial comeback was not without costs to its reputation as a "family" corporation. The reduction of the company's customer service team resulted in a significant increase in passenger complaints, and by 1997 Delta dropped to last place in on-time rankings among the ten leading U.S. airlines. The decline in customer service was hardly unique to Delta. Overall, the annual number of airline passengers in the U.S. jumped to 640 million in 1999, compared to 453 million in 1991, with the ratio of seats filled reaching an all-time high of 71.3 percent. Overcrowding, frequent delays, and poor service resulted in a substantial increase in the numbers of complaints lodged with the Department of Transportation in 1999, prompting Congress to consider legislation that would impose stricter regulations on the airlines' business practices.
The airline industry also faced a number of labor disputes at the beginning of the new century. The expiration of the Delta pilots' contract in May 2000 was followed by several months of unproductive negotiations. When the impasse dragged into December, the pilots retaliated by refusing voluntary overtime during one of the airline's busiest seasons, forcing Delta to cancel 3,500 flights over the course of the month. The new year brought little relief, and another 1,700 cancellations followed in the first ten days of January 2001. While the company enjoyed net profits of $897 million in 2000, and saw its total number of passengers reach an all-time high of 120 million, it was clear Delta still faced several unresolved issues, both with customer service and labor, as it continued on its quest to become the nation's leading airline.
Principal Subsidiaries: ASA Holdings, Inc.; Atlantic Southeast Airlines; Delta Technology, Inc.; Comair Holdings, Inc.; WORLDSPAN, L.P. (40%)
Principal Competitors: AMR Corporation; Southwest Airlines Co.; UAL Corporation.
OVERALL
Beta: 0.64
Market Cap (Mil.): $8,898.22
Shares Outstanding (Mil.): 845.84
Annual Dividend: --
Yield (%): --
FINANCIALS
DAL Industry Sector
P/E (TTM): 16.74 19.80 16.70
EPS (TTM): 174.53 -- --
ROI: -- 2.37 3.22
ROE: -- 6.46 5.81
Statistics:
Public Company
Incorporated: 1934 as Delta Air Corporation
Employees: 81,000
Sales: $15.89 billion (2000)
Stock Exchanges: New York
Ticker Symbol: DAL
NAIC: 481111 Scheduled Passenger Air Transportation; 481112 Scheduled Freight Air Transportation; 481219 Other Nonscheduled Air Transportation
Key Dates:
1924: Huff Daland Dusters, a crop dusting operation, is founded.
1929: Delta inaugurates passenger flights between Dallas and Jackson, Mississippi.
1953: Delta merges with Chicago and Southern Airlines.
1967: Delta merges with Delaware Airlines, becomes Delta Air Lines.
1972: Delta acquires Northeast Airlines.
1986: Delta acquires Western Air Lines.
1994: Delta's Leadership 7.5 program is launched, seeking to dramatically restructure and streamline operations.
2000: Total number of passengers carried during the year reaches an all-time high of 120 million.
Name Age Since Current Position
Carp, Daniel 62 2007 Non-Executive Independent Chairman of the Board
Anderson, Richard 56 2007 Chief Executive Officer, Director
Bastian, Edward 53 2010 President, Director
Bostock, Roy 70 2008 Non-Executive Independent Vice Chairman of the Board
Halter, Hank 45 2008 Chief Financial Officer, Senior Vice President
Gorman, Stephen 55 2008 Chief Operating Officer, Executive Vice President
Campbell, Michael 62 2008 Executive Vice President - Human Resources & Labor Relations
Hauenstein, Glen 50 2006 Executive Vice President - Network Planning and Revenue Management
Hirst, Richard 66 2008 Senior Vice President, General Counsel
Collette, Chris 48 2010 Senior Vice President - Supply Chain Management
Ferri, Nicolas 2011 Vice President - Latin America
Goode, David 70 1999 Director
Shah, Neel 41 2010 Vice President, Chief Cargo Officer
Woodrow, Kenneth 66 2004 Director
Reynolds, Paula 54 2004 Director
Brinzo, John 69 2007 Director
Rogers, Kenneth 50 2008 Director
Steenland, Douglas 59 2008 Director
Engler, John 62 2008 Director
Foret, Mickey 65 2008 Director
Slater, Rodney 56 2008 Director
Address:
Hartsfield International Airport
Atlanta, Georgia 30320
U.S.A.
On October 29, 2008, Delta completed its merger with Northwest Airlines to form the world's largest commercial carrier. In February 2009, the airline began consolidating gates and ticket counters at airports where both Delta and Northwest operate. The consolidation was completed February 2010.[11] On December 31, 2009, the Federal Aviation Administration granted Delta's request to allow Delta and Northwest to operate under a single operating certificate.
Delta Air Lines, Inc. (Delta) provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company’s route network gives it a presence in every domestic and international market. Delta’s route network is centered around the hub system it operate at airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Each of these hub operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The Company’s network is supported by a fleet of aircraft that is varied in terms of size and capabilities.
Delta has bilateral and multilateral marketing alliances with foreign airlines to improve its access to international markets. These arrangements can include code-sharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office co-location, and other marketing agreements. Its international code-sharing agreements enable it to market and sell seats to an expanded number of international destinations. The Company has international codeshare arrangements with Aeromexico, Air France, Air Nigeria, Alitalia, Avianca, China Airlines, China Southern, CSA Czech Airlines, KLM Royal Dutch Airlines, Korean Air, Olympic Air, Royal Air Maroc, VRG Linhas Aereas, Vietnam Airlines and Virgin Blue Airlines.
In addition to the Company’s marketing alliance agreements with individual foreign airlines, it is a member of the SkyTeam airline alliance. Delta also has frequent flyer and reciprocal lounge agreements with Hawaiian Airlines, and codesharing agreements with American Eagle Airlines (American Eagle) and Hawaiian Airlines. It has air service agreements with multiple domestic regional air carriers that feed traffic to its route system by serving passengers primarily in small-and medium-sized cities.
Through the Company’s regional carrier program, it has contractual arrangements with nine regional carriers to operate regional jet and, in certain cases, turbo-prop aircraft using its DL designator code. In addition to Delta’s wholly owned subsidiary, Comair, it has contractual arrangements with Atlantic Southeast Airlines, Inc. and SkyWest Airlines, Inc., both subsidiaries of SkyWest, Inc.; Chautauqua Airlines, Inc. and Shuttle America Corporation, both subsidiaries of Republic Airways Holdings, Inc.; Compass Airlines, Inc.; Pinnacle Airlines, Inc. and Mesaba Aviation, Inc., both subsidiaries of Pinnacle Airlines Corp., and American Eagle.
The Company’s SkyMiles program allows program members to earn mileage for travel awards by flying on Delta, Delta’s regional carriers and other participating airlines. Mileage credit may also be earned by using certain services offered by program participants, such as credit card companies, hotels and car rental agencies. In addition, individuals and companies may purchase mileage credits. The Company reserves the right to terminate the program with six months advance notice, and to change the program’s terms and conditions at any time without notice.
SkyMiles program mileage credits can be redeemed for air travel on Delta and participating airlines, for membership in the Company’s Delta Sky Clubs and for other program participant awards. Mileage credits are subject to certain transfer restrictions and travel awards are subject to capacity controlled seating. During the year ended December 31, 2010, program members redeemed more than 264 billion miles in the SkyMiles program for more than 12 million award redemptions. During 2010, 8.3% of revenue miles flown on Delta were from award travel.
The Company generates cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft. Delta is a member of SkyTeam Cargo, an airline cargo alliance. SkyTeam Cargo offers a network spanning six continents and provides customers an international product line.
The Company has several other businesses arising from its airline operations, including aircraft maintenance, repair and overhaul (MRO); staffing services for third parties; vacation wholesale operations, and its private jet operations. Delta’s MRO operation, known as Delta TechOps, is an airline MRO in North America. In addition to providing maintenance and engineering support for its fleet of approximately 750 aircraft, Delta TechOps serves more than 150 aviation and airline customers. Its staffing services business, Delta Global Services, provides staffing services, professional security, training services and aviation solutions to approximately 150 customers. The Company’s vacation wholesale business, MLT Vacations, is the provider of vacation packages in the United States. Its private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour.
The Company competes with United Air Lines, Continental Airlines, Lufthansa German Airlines, Air Canada, American Airlines, British Airways and Qantas.
Delta appeared to have adapted well to the expansion-oriented market. Whereas Delta fliers used to joke that, though you might not know whether you would go to heaven or hell when you died, you would definitely have to change planes in Atlanta, the airline's customers could now fly to Europe via its Frankfurt hub, or to Latin America via Miami. As it adapted to the aggressive and expanding modern market, Delta strove to maintain its policies of good labor relations and attention to service. Delta's employees were still among the highest paid in the industry and, like founder C.E. Woolman, Allen sometimes rode on Delta flights to interact with passengers. Indeed, Forbes magazine queried in a 1988 headline: "Is Delta too nice for its own good?" At the time, however, its emphasis on people seemed not to have crippled Delta.
Record Profits, New Problems: Heading into the Twenty-First Century
By 1992 it became clear that the financing agreement with Pan Am had come at a bad time for Delta. The general economic recession and continued high fuel prices, combined with the weight of Pan Am's heavy debt, resulted in net losses of $506 million for fiscal year 1991. In an effort to lower costs, Delta was forced to reduce its work force by five percent, in addition to implementing wage freezes and salary cuts. At the same time, the company was eager to integrate Pan Am's extensive European routes into its system, hoping to restore itself to profitability by improving its position as an international carrier. However, the lingering effects of the recession, as well as the recent Gulf War, had precipitated an overall decline in commercial air travel. To counteract this trend, Delta announced reductions of 45 percent on transatlantic fares at the onset of the summer 1992 season, resulting in record traffic of 8,511,966 passengers in August. In April 1993, in an effort to increase its share of transpacific air traffic, Delta launched new non-stop flights between Los Angeles and Hong Kong.
Initially, the stronger emphasis on overseas routes paid off for the company, leading to profits of $60.4 million in the first quarter of fiscal 1993, compared to a net loss of $125.2 million for the first quarter of the previous year. Inspired by this success, Delta strove to further expand its international presence by entering into code-sharing agreements with a number of foreign carriers in 1994, including Virgin Atlantic, Vietnam Airlines, and Aeromexico. Code sharing allowed an airline to purchase tickets from its rivals and resell them to its own customers, providing greater scheduling flexibility and control over prices. While some considered the practice deceptive, by the mid-1990s it had become prevalent throughout the airline industry, with the number of code-sharing partnerships reaching 389 by 1996. For its part, Delta established 14 such contracts with other airlines between 1992 and 1996.
Another wave of heavy losses in the first three months of 1994 forced the company to undertake a more drastic cost cutting scheme, and in April Delta launched its Leadership 7.5 program, a restructuring initiative designed to streamline operations. The goal was implied in the program's name; Delta hoped to reduce the cost of flying to 7.5 cents per mile, per seat, with an overall aim to cut operating expenses by $2 billion over a three year span. The reorganization called for a reduction of 20 percent of the company's work force, a realignment of its domestic route system, and a discontinuation of some of its less profitable European routes. These drastic measures brought quick results, and the company was able to claim a net profit of $251 million for the fourth quarter of fiscal 1995.
Delta's impressive financial comeback was not without costs to its reputation as a "family" corporation. The reduction of the company's customer service team resulted in a significant increase in passenger complaints, and by 1997 Delta dropped to last place in on-time rankings among the ten leading U.S. airlines. The decline in customer service was hardly unique to Delta. Overall, the annual number of airline passengers in the U.S. jumped to 640 million in 1999, compared to 453 million in 1991, with the ratio of seats filled reaching an all-time high of 71.3 percent. Overcrowding, frequent delays, and poor service resulted in a substantial increase in the numbers of complaints lodged with the Department of Transportation in 1999, prompting Congress to consider legislation that would impose stricter regulations on the airlines' business practices.
The airline industry also faced a number of labor disputes at the beginning of the new century. The expiration of the Delta pilots' contract in May 2000 was followed by several months of unproductive negotiations. When the impasse dragged into December, the pilots retaliated by refusing voluntary overtime during one of the airline's busiest seasons, forcing Delta to cancel 3,500 flights over the course of the month. The new year brought little relief, and another 1,700 cancellations followed in the first ten days of January 2001. While the company enjoyed net profits of $897 million in 2000, and saw its total number of passengers reach an all-time high of 120 million, it was clear Delta still faced several unresolved issues, both with customer service and labor, as it continued on its quest to become the nation's leading airline.
Principal Subsidiaries: ASA Holdings, Inc.; Atlantic Southeast Airlines; Delta Technology, Inc.; Comair Holdings, Inc.; WORLDSPAN, L.P. (40%)
Principal Competitors: AMR Corporation; Southwest Airlines Co.; UAL Corporation.
OVERALL
Beta: 0.64
Market Cap (Mil.): $8,898.22
Shares Outstanding (Mil.): 845.84
Annual Dividend: --
Yield (%): --
FINANCIALS
DAL Industry Sector
P/E (TTM): 16.74 19.80 16.70
EPS (TTM): 174.53 -- --
ROI: -- 2.37 3.22
ROE: -- 6.46 5.81
Statistics:
Public Company
Incorporated: 1934 as Delta Air Corporation
Employees: 81,000
Sales: $15.89 billion (2000)
Stock Exchanges: New York
Ticker Symbol: DAL
NAIC: 481111 Scheduled Passenger Air Transportation; 481112 Scheduled Freight Air Transportation; 481219 Other Nonscheduled Air Transportation
Key Dates:
1924: Huff Daland Dusters, a crop dusting operation, is founded.
1929: Delta inaugurates passenger flights between Dallas and Jackson, Mississippi.
1953: Delta merges with Chicago and Southern Airlines.
1967: Delta merges with Delaware Airlines, becomes Delta Air Lines.
1972: Delta acquires Northeast Airlines.
1986: Delta acquires Western Air Lines.
1994: Delta's Leadership 7.5 program is launched, seeking to dramatically restructure and streamline operations.
2000: Total number of passengers carried during the year reaches an all-time high of 120 million.
Name Age Since Current Position
Carp, Daniel 62 2007 Non-Executive Independent Chairman of the Board
Anderson, Richard 56 2007 Chief Executive Officer, Director
Bastian, Edward 53 2010 President, Director
Bostock, Roy 70 2008 Non-Executive Independent Vice Chairman of the Board
Halter, Hank 45 2008 Chief Financial Officer, Senior Vice President
Gorman, Stephen 55 2008 Chief Operating Officer, Executive Vice President
Campbell, Michael 62 2008 Executive Vice President - Human Resources & Labor Relations
Hauenstein, Glen 50 2006 Executive Vice President - Network Planning and Revenue Management
Hirst, Richard 66 2008 Senior Vice President, General Counsel
Collette, Chris 48 2010 Senior Vice President - Supply Chain Management
Ferri, Nicolas 2011 Vice President - Latin America
Goode, David 70 1999 Director
Shah, Neel 41 2010 Vice President, Chief Cargo Officer
Woodrow, Kenneth 66 2004 Director
Reynolds, Paula 54 2004 Director
Brinzo, John 69 2007 Director
Rogers, Kenneth 50 2008 Director
Steenland, Douglas 59 2008 Director
Engler, John 62 2008 Director
Foret, Mickey 65 2008 Director
Slater, Rodney 56 2008 Director
Address:
Hartsfield International Airport
Atlanta, Georgia 30320
U.S.A.