Delta's aggressive path to airline profitability
The airline business? Tough, by any measure.
The airline business in the United States? Even tougher.
Yet somehow, Delta Air Lines has out-maneuvered its competitors, approaching its third consecutive year of profitability with almost half of its substantial corporate debt eliminated.
How did the carrier manage such success in such a difficult market? By taking a different path than its rivals.
The Wall Street Journal's Susan Carey reports that Delta's use of fully-owned and rehabilitated older aircraft (taking planes others wanted to rid of, and avoiding monthly payments), purchase of an oil refinery (to stabilize fuel costs) and use of largely non-union labor (giving it flexibility other carriers don't enjoy) has kept it nimbler than usual in a cutthroat industry.
So far, Delta is thriving in its penny-pinching, and using the money it is saving to pay down debt, upgrade aircraft interiors, invest in new terminals and add passenger perks such as Wi-Fi in its cabins.
Its secret? Chief executive Richard Anderson, who has taken lessons learned in aviation (Northwest) and healthcare (UnitedHealth) alike to keep a laser-like focus on how the company uses its cash. There are many ways to innovate in a company, but sometimes the best way is simply executing better than everyone else.