DELTA_REPORT_Added Elley.docx - Current Situation History Delta was founded in 1924 as first agricultural flying company in the United States They grew

DELTA_REPORT_Added Elley.docx - Current Situation History...

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Current Situation History Delta was founded in 1924 as first agricultural flying company in the United States. They grew through series of mergers and key alliances. Economic Performance Their Return on Investment showed rate of return on total assets increased slightly from 2010 to 2011, from 1.37% to 1.96%. Their Net Profit Margin continued increased from -4.4%, 1.87% to 2.43% over last three years. Good indication. Noted hat gross profit margin rose steadily as well. Their ROE declined significantly. This was due to an increased deficit in stockholder equity. Their Rate of return on shareholder’s investment was negative in 2011. Their EPS rose to $1.02, a 43% increase from 2010 to 2011. They earned highest profits in last year following Northwest merger, but created high long term debt. Market share eroded by low-cost carriers, however, still second largest airline. Strategic Posture Mission To profitably operate one of the largest airlines in the world. Objectives To balance its high debt ventures against long term needs of the organization. o To manage debt and crisis in creating future development To maintain excellent relationships with its strong suppliers including fuel suppliers, aircraft manufacturers, skilled employees. To improve brand loyalty with buyers. To differentiate itself through service or brand building. Strategies They expand through mergers and acquisitions which consider targeting bankrupt AA or another low cost carrier that is successful, such as Jet Blue. They move into supplier side of the equation by looking into ConocoPhillips opportunity to determine if refinery option could supply the needed fuel at a reduced or stable cost. They operates its own service decision (airframe maintenance, component and part maintenance, engine maintenance, etc). They will maintain large U.S. domestic hub operations to shut out competition. They try to use smaller planes, retires older planes in order to combat lower demand and higher fuel prices. They will embrace technology such as seat assignment visibility, self-service kiosks, paperless mobile check-in, more options on flight, blog. They differentiate itself with
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marketing by using Business Elite Services Program (higher perceived value) and affiliate marketing to reach out to more customers. Policies Board established pay for performance as key component of executive compensation. Participants and promotes small businesses, minority-and female-owned businesses. Compensation and benefits has been major topic as part of policy developments. Incorporate technology in servicing and marketing to customers. Corporate Governance Board of Directors There are eleven members and three of them are internal. None of Board members own more than 1% of stock. Each non employee director to own at least 35,000 shares of Delta common stock no later than three years after his or election to the Board. The longest serving Board member tenured for 12 years, majority of the Board on average has been on the Board for approximately 4-5 years.
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