Delta Air Lines Competition
Now Viewing Delta Air Lines's competition in: Airlines (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
For cargo or specialty airlines: -
How does the company get business? - Cargo companies typically have arrangements with freight forwarders or contracts with airports. Specialty airlines may have contracts with hospitals, companies, or government agencies.
For passenger airlines: -
What was the airline's average passenger fare last year? - Although major airlines compete very heavily on fare prices, smaller regional airlines can often undercut their prices.
Does the fare different passengers pay for the same flight vary? - Some airlines have complicated pricing schedules to maximize revenue from a flight.
Does the company promote itself to a particular type of passenger? - Some airlines target business travelers, tourists, or price-conscious passengers.
Does the airline have a frequent flyer reward program? What are its main features? - Programs can be based on miles flown or number of flights taken. Rewards can be free tickets, service upgrades, or merchandise.
Does the airline sell tickets through its own website? - The majority of Southwest tickets are sold through its own website.
What percentage of tickets is sold through phone reservations, by independent agents, and by Internet agencies like Expedia? -
What commissions does the airline pay travel agencies for ticket sales? -
Does the company have code-sharing or marketing alliances with other airlines? - Through code-sharing, airlines can offer a larger number of destinations to customers by booking connecting flights on a partner's airplanes.
Does the airline sell blocks of tickets to wholesalers at a discount? - Wholesalers may resell them to tour operators or to the public on discount ticket websites.
How many other airlines serve the major routes the company flies? - Many airports provide service from only a few airlines.
Is the company the major airline at any airports? -
Competitive Landscape
Airlines depend highly on the health of the US economy, which affects air travel by business and consumer passengers. Because many costs are fixed, the profitability of individual companies is determined by efficient operations and on favorable fuel and labor costs. Small airlines can compete by servicing local or regional routes.
Business Challenges
CRITICAL ISSUES
Profitability Depends on Business, Consumer Travel - Both business and tourist travel are reduced when the economy slows. Global aviation traffic rises and falls at twice the pace of economic output, so a change in the economy doubles the impact for airlines. Because of relatively high fixed-costs of airplanes, airport facilities, and labor, airlines can't easily adjust to reduced passenger traffic.
Fuel Costs can Vary Highly - Aviation fuel accounts for 15 to 20 percent of industry operating costs, relatively more for airlines with low labor costs. Fuel costs can change rapidly, making it difficult for airlines to adjust ticket prices. Some airlines use futures contracts to protect against cost increases. Newer planes have better fuel consumption.
Industries Where Delta Air Lines Competes
- Transportation Services
- Airlines(primary)
- Air Cargo Services
