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Delta's aggressive path to airline profitability

Posting in Healthcare

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.

Carey writes:

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.

Photo: Delta

— By on November 16, 2012, 3:42 AM PST

Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure