Detailed Look at Delta Air Lines Essay

3915 Words 16 Pages
By the middle of the 1990's, Delta had service in 44 countries and more than 323 cities.  Profits had finally returned to Delta after several years of heavy losses.  Losses had piled up during the early 1990's leaving Delta swooning with debt.  Expansions into Europe, world recession, competition, and managerial inefficiencies all played a large role in these losses.  Still, the third largest U.S. carrier was looking for further growth outside of the domestic market .  Market share in the global market was very important.  Competition during the early 1990's was extremely fierce and even late in the decade remained very strong.  Delta's recovery into the middle and late 1990's is still scarred by the …show more content…
 Delta made further expansions by acquiring Northeast Airlines in 1972 in order to expand into Canada and New England.  Flights from Atlanta to London were added in 1978 marking the beginning of Delta's true global expansion.  The Air Deregulation Act also went into effect in 1978.  This permitted many airline companies to grow very rapidly.  Delta, however, maintained strong consistent growth during this period.  By 1987, Delta merged with Western Airlines adding routes to Mexico, Canada, Hawaii, and others.<p>
Europe and Pan Am:  Buying used baggage<p>
When Delta purchased Pan Am in 1991, Delta was trying to accomplish an expansion into Europe which, on paper, looked like a no-brainer.  Sales had been increasing consistently each year and Delta's net income had reached $461 million by 1989 (Exhibit 1) .  The advantages were very simple.  Delta had already had hubs at Atlanta, Cincinnati, and Orlando.  But, 29% of the U.S. population and 33% of the U.S. European market lay northeast of these hubs.  The acquisition gave Delta the New York gateway at JFK airport.  This was the major hub between the U.S. and Europe.  This not only filled in a major gap for Delta in the U.S., but allowed Delta to expand to Europe using the most populated airport region in the east.  Furthermore, it doubled Delta's European facilities virtually

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