Delta Airlines Domestic Environment
Domestic Environment – Delta Airlines
Business Theory
August 15, 2013
Domestic Environment – Delta Airlines
Delta Airlines has 70 years of experience and is part of the airline industry. The domestic environment of Delta Airlines is the United States. The airline has grown into one of the largest global airlines in the world. Each year they help over 160 million travelers in reaching their destinations ("Century of flight," 2013). Delta Airlines started in 1924 in the agricultural industry. They were known as Huff Daland Dusters and were the world’s first aerial crop dusting organization. The dusting company only had income during the summer months, so it was decided that during the non-productive …show more content…
months, it would be the first American airline to operate airline mail south of the equator ("Century of flight," 2013).
By 1927, a 1500 mile route airline service was provided from Peru to Ecuador. By 1959, Delta had become one of the first to offer Boeing 707 services. In June 1993, they had accomplished combining with other airlines around the world, including 350 cities in over 55 countries. Delta broke their record of carrying 103 million passengers in 1997. In 1998 they made history by carrying over 105 million passengers ("Century of flight," 2013). Unfortunately in 2006, Delta Airlines made Fortune 500 's list least admired for their people management. Business theorist Peter Drucker states, "One does not ‘manage ' people. The task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individual" (Drucker, 1999).
Government regulations are very involved with Delta Airlines, as they are with every airline in the industry.
The government has regulations on national security, industry behavior, aircraft integrity, traffic control, etc. (Lutzenberger, 2013). While most of the regulations are regarding safety, some are also regarding protection of competition. National security is first and foremost. They have the right to enforce background checks of ticket buyers, search luggage, use X-ray and chemical detection on passengers and their belongings, and have air marshals on flights for law enforcement. The Federal Aviation Administration (FAA) is also involved with regulations. Planes are tracked with FAA logs. Maintenance service and rebuilds are required after so many hours of use. The FAA carries out regular inspections and reviews to ensure the airline is reliable with the safety and maintenance requirements. All airlines fall under regulation of U.S. Securities and Exchange Commission and the FBI. They are involved with matters on business violations and criminal business activity. Both agencies can start investigations if needed (Lutzenberger, …show more content…
2013).
The government regulations that Delta Airlines has result in considerable costs. For instance, when the FAA subjects maintenance and operation of an aircraft, it takes a lot of money. If the FAA adds more regulations it could result in even more costs that would affect ticket prices and employee pay (Lutzenberger, 2013). Increased ticket prices could negatively affect revenue. There are congestion issues at many airports, mainly in the Northeast United States. The government has thought of proposing regulations to help with this issue. If enforced there would be a sizable cost for the airlines that operate in these airports. There has also been talk regarding climate change and aircraft emissions for the airline industry. The European Commission wants to inflict an emission trading scheme that would apply to all flights operating in the European Union. This could affect Delta Airlines operations and financial results (Lutzenberger, 2013).
It is highly likely that Delta airlines will see more government regulations in the future regarding business and movement of people.
If they want to stay successful they have to follow the regulations. There is a growing level of concern when it comes to United States privacy of passenger data. Various European government agencies want to induct inquiries into airline privacy practices (Lutzenberger, 2013). Compliance with these regulations can result in added operating costs and potentially impact further expansion. When it comes to regulations that are in foreign countries and not consistent with the United States, there could be some compromise. According to Peter Drucker, you have to first know what is right to make an effective decision and to not worry whether it is right or if anyone will like that decision (Yusoontorn, 2011) . The people that ultimately make the final decisions need to "make productive the specific strengths and knowledge." Think of the end result. For example, will providing regulations on the congestion issues in Northeast airports impact cost for the airlines that operate there? Yes it will, but ultimately the focus should be on the customers that travel to and from these airports. Peter Drucker says "the primary function of a business is serve the customer and the primary goal of your business is to create customers” (Yusoontorn, 2011). Regulations on congestion will help to make people want to travel to and from these airports and can
result in more money for the airline.
References
Century of flight. (2013). Retrieved from http://www.century-of-flight.net/Aviation history/coming of age/usairlines/Delta Airlines.htm
Drucker, P. (1999, September). Management challenges for the 21st century. Retrieved from http://tap3x.net/EMBTI/j6drucker.html
Lutzenberger, T. (2013). Government regulations of airlines. Retrieved from http://www.ehow.com/about_6472403_government-regulation-airlines.html
Yusoontorn, S. (2011, March 1). 25 management lessons from peter drucker. Retrieved from http://www.slideshare.net/bright9977/25-management-lessons-from-peter-drucker-7109567
Business Theory
August 15, 2013
Domestic Environment – Delta Airlines
Delta Airlines has 70 years of experience and is part of the airline industry. The domestic environment of Delta Airlines is the United States. The airline has grown into one of the largest global airlines in the world. Each year they help over 160 million travelers in reaching their destinations ("Century of flight," 2013). Delta Airlines started in 1924 in the agricultural industry. They were known as Huff Daland Dusters and were the world’s first aerial crop dusting organization. The dusting company only had income during the summer months, so it was decided that during the non-productive …show more content…
months, it would be the first American airline to operate airline mail south of the equator ("Century of flight," 2013).
By 1927, a 1500 mile route airline service was provided from Peru to Ecuador. By 1959, Delta had become one of the first to offer Boeing 707 services. In June 1993, they had accomplished combining with other airlines around the world, including 350 cities in over 55 countries. Delta broke their record of carrying 103 million passengers in 1997. In 1998 they made history by carrying over 105 million passengers ("Century of flight," 2013). Unfortunately in 2006, Delta Airlines made Fortune 500 's list least admired for their people management. Business theorist Peter Drucker states, "One does not ‘manage ' people. The task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individual" (Drucker, 1999).
Government regulations are very involved with Delta Airlines, as they are with every airline in the industry.
The government has regulations on national security, industry behavior, aircraft integrity, traffic control, etc. (Lutzenberger, 2013). While most of the regulations are regarding safety, some are also regarding protection of competition. National security is first and foremost. They have the right to enforce background checks of ticket buyers, search luggage, use X-ray and chemical detection on passengers and their belongings, and have air marshals on flights for law enforcement. The Federal Aviation Administration (FAA) is also involved with regulations. Planes are tracked with FAA logs. Maintenance service and rebuilds are required after so many hours of use. The FAA carries out regular inspections and reviews to ensure the airline is reliable with the safety and maintenance requirements. All airlines fall under regulation of U.S. Securities and Exchange Commission and the FBI. They are involved with matters on business violations and criminal business activity. Both agencies can start investigations if needed (Lutzenberger, …show more content…
2013).
The government regulations that Delta Airlines has result in considerable costs. For instance, when the FAA subjects maintenance and operation of an aircraft, it takes a lot of money. If the FAA adds more regulations it could result in even more costs that would affect ticket prices and employee pay (Lutzenberger, 2013). Increased ticket prices could negatively affect revenue. There are congestion issues at many airports, mainly in the Northeast United States. The government has thought of proposing regulations to help with this issue. If enforced there would be a sizable cost for the airlines that operate in these airports. There has also been talk regarding climate change and aircraft emissions for the airline industry. The European Commission wants to inflict an emission trading scheme that would apply to all flights operating in the European Union. This could affect Delta Airlines operations and financial results (Lutzenberger, 2013).
It is highly likely that Delta airlines will see more government regulations in the future regarding business and movement of people.
If they want to stay successful they have to follow the regulations. There is a growing level of concern when it comes to United States privacy of passenger data. Various European government agencies want to induct inquiries into airline privacy practices (Lutzenberger, 2013). Compliance with these regulations can result in added operating costs and potentially impact further expansion. When it comes to regulations that are in foreign countries and not consistent with the United States, there could be some compromise. According to Peter Drucker, you have to first know what is right to make an effective decision and to not worry whether it is right or if anyone will like that decision (Yusoontorn, 2011) . The people that ultimately make the final decisions need to "make productive the specific strengths and knowledge." Think of the end result. For example, will providing regulations on the congestion issues in Northeast airports impact cost for the airlines that operate there? Yes it will, but ultimately the focus should be on the customers that travel to and from these airports. Peter Drucker says "the primary function of a business is serve the customer and the primary goal of your business is to create customers” (Yusoontorn, 2011). Regulations on congestion will help to make people want to travel to and from these airports and can
result in more money for the airline.
References
Century of flight. (2013). Retrieved from http://www.century-of-flight.net/Aviation history/coming of age/usairlines/Delta Airlines.htm
Drucker, P. (1999, September). Management challenges for the 21st century. Retrieved from http://tap3x.net/EMBTI/j6drucker.html
Lutzenberger, T. (2013). Government regulations of airlines. Retrieved from http://www.ehow.com/about_6472403_government-regulation-airlines.html
Yusoontorn, S. (2011, March 1). 25 management lessons from peter drucker. Retrieved from http://www.slideshare.net/bright9977/25-management-lessons-from-peter-drucker-7109567