Delta Air Lines
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Delta Air Lines, Inc. (NYSE: DAL) is a United States airline[1]. Delta operates an expansive domestic and international network, spanning North America, South America, Europe, Asia, Africa, the Middle East and the Caribbean. Delta flies to over 332 destinations in 57 countries (excluding codeshare), across 5 continents.[2] Delta is the only major U.S. carrier that flies to Africa.[3] Delta operates hubs at Hartsfield-Jackson Atlanta International Airport, Salt Lake City International Airport, Cincinnati/Northern Kentucky International Airport, and New York's John F. Kennedy International Airport; Delta's Atlanta hub is the largest/busiest airline hub in the world. Delta also has large operations in many other cities, including Boston, Cancun, Fort Lauderdale, Los Angeles, New York-LaGuardia, Orlando, Tampa, and Columbus. Delta is the leading carrier in Florida, and carries more passengers across the Atlantic than any other carrier worldwide. Its major transatlantic gateways are Atlanta, Cincinnati, and New York-JFK. Transatlantic service is scheduled to start in 2008 from Salt Lake City to Paris. Its major Latin American gateways are Atlanta and its rapidly developing hub in Los Angeles.[4] In terms of passengers carried (approximately 119 million in 2005),[5] Delta is the second-largest airline in the world (behind American Airlines). In terms of revenue passenger miles, Delta Air Lines is the third largest airline, after American Airlines and United Airlines. Delta Air Lines serves more destinations than any other airline in the world.[6] In terms of total operating revenues, Delta is the sixth-largest airline in the world.[7]
The companyAirline operations
Aviation business related operations, divisions, and subsidiaries
Former subsidiariesDefunct airlines operated by Delta
As a historical footnote, Western Airlines was acquired on December 16, 1986, and was operated as a separate airline by Delta for over three months.[8] In a case by a union to stop the workforce integration, the U.S. Supreme Court wrote "On December 16, 1986, shareholder approval of the merger was confirmed and Western Airlines became a wholly owned subsidiary of Delta."[9] The changeover date for discontinuation of the Western Airlines brand and the date for merger of the two airlines' workforce was April 1, 1987, but for several months before that Delta had acquired Western and was operating it as a separate airline.[10] HistoryEarly historyImage:Delta DC-7.jpg
A Douglas DC-7 in Delta livery
The company has its roots in Huff Daland Dusters, which was founded in 1924 in Macon, Georgia, by several partners including Collett E. Woolman becoming the world's first aerial crop dusting company. Huff Daland moved to Monroe, Louisiana the following year. In 1928, Huff Daland Dusters was purchased by C.E. Woolman and renamed Delta Air Service after the Mississippi Delta, where its route connected Dallas, Texas to Jackson, Mississippi, via Shreveport and Monroe. The original directors of Delta Air Service were C.H. McHenry, Travis Oliver, and M.S. Biedenharn. By 1934, Delta began mail service from Charleston, SC to Fort Worth, with stops in Columbia, SC, Augusta, Atlanta, Birmingham, and Meridian along the way.[11] In 1941, Delta moved its headquarters from Monroe to Atlanta, to center itself along its new route network that now stretched to Chicago, Miami, and New Orleans. The logo for Monroe Regional Airport is based on the Delta logo, in honor of it being the airline's birthplace and the original headquarters for Delta. Delta was the launch operator of the Douglas DC-8, which began service in 1959, and the Convair CV-880 in 1960. The DC-8's graceful swept-wing design inspired Delta to come up with a new red, white, and blue delta-shaped logo (the "widget"). Just a few years later, Delta became the launch operator of the Douglas DC-9. By 1970, Delta was an all jet airline. 1970s and 1980sIn 1970, Delta entered the "wide-body" jet era with the purchase of five Boeing 747s to service its new long-haul high density routes. The initial route was a Los Angeles-Dallas Love Field-Atlanta routing. Delta also had an interchange with Pan Am using Delta 747 to fly to Heathrow Airport in London. However, with the economic slowdown of the early 1970s, Delta found the aircraft too large for its routes and it sold them a few years later. Shortly thereafter, Delta leased five DC-10s from United Airlines as a stopgap until its larger order of the new Lockheed L-1011 TriStars could be delivered. Image:DeltaL-1011.jpg
A Delta L-1011
Delta purchased Northeast Airlines in 1972 to strengthen its market share in the northeastern United States. Through the purchase, Delta began its long Boeing 727 operation. In 1973, the Lockheed TriStar entered service for Delta. Delta placed these aircraft in international service from Atlanta to London in 1978; Frankfurt was added the following year. Delta's fast growth showed in August 1979 when it became the first airline in the world to board one million passengers in one city in one month (Atlanta). Delta launched its first frequent flyer program in 1981 which became the SkyMiles program in 1995. In 1983, Delta took delivery of their first Boeing 767-200, named the Spirit of Delta, which was paid for "by voluntary contributions from employees, retirees and Delta's community partners." The effort, called Project 767, was spearheaded by three Delta flight attendants to show the employees' appreciation to Delta for solid management and strong leadership during the first years following airline deregulation."[12] The airplane remained the flagship of the Delta fleet until 2006, and was repainted in a commemorative paint scheme and toured the country to celebrate the airline's 75th anniversary in 2004.[13] In 1984, the company established the Delta Connection partnership linking local "feeder" airlines that served mid-size population areas to Delta nodes. The same year, Delta began its first flight to Hawaii (Honolulu International Airport) with L-1011 aircraft. Also in 1984, Delta began to offer the nation's first public air-to-ground telephone system with Airfone, on the L-1011. Delta was named 'Official Airline of Walt Disney World' in 1986, and their official ride in the Magic Kingdom was Delta Dreamflight, and was discontinued in the late 1990s when Delta's partnership with Walt Disney World ended. In 1987, Delta merged with Western Airlines of Los Angeles and absorbed its large hubs at Salt Lake City and Los Angeles. Through these acquisitions and expansions Delta became the fourth largest U.S. carrier and fifth largest world carrier. Also in 1987, Ronald W. Allen became chairman and CEO. 1990sIn 1990, Delta became the first U.S. airline to operate the McDonnell Douglas MD-11 aircraft [14], leasing two from Mitsui. Delta operated 15 MD-11s. Delta's most dramatic expansion (at that time) came with its purchase of Pan Am's European routes in 1991 which included all north Atlantic routes except Miami to London and Paris, and the Frankfurt, Germany hub, after Pan Am declared bankruptcy. The purchase gave Delta the largest transatlantic route network, a fleet of 21 Airbus A310 aircraft, and the Worldport (Terminal 3) at JFK. Due to these acquisitions, Delta became and remains today the largest U.S. transatlantic carrier, in terms of passengers carried and number of flights operated. Delta also acquired Pan Am's northeastern shuttle, inheriting of a number of Boeing 727s, and forming what is today Delta Shuttle. In 1991, as one of the conditions for Delta's financial support of Pan Am, Delta had the rights to use the Pan Am name on flights across the Atlantic. Delta obtained all of Pan Am's remaining transatlantic rights, except Miami to Paris and London, in November, 1991, including the route from Detroit to London, despite Northwest Airlines' objections. It was an unusual route for Delta given its small presence in Detroit, and Northwest's correspondingly larger operations.[15] Northwest later attempted to buy US Air's (now US Airways) Baltimore-London route for $5 million and transfer the route to Detroit[16] but ended up buying the route from Delta in 1995[17] for a rumored $32 million. The naming right was never exercised even though the Pan Am name was a much more widely recognized name in Europe than Delta. Within weeks after the route and asset transfers were complete, Delta ended its financial support, leading to Pan Am ceasing operations on December 4, 1991.[18] After withdrawing its agreed upon financial support, which would have allowed Pan Am to continue with a hub in MIA, Delta was sued for more than $2.5 billion on December 9, 1991 by the Pan Am Creditors Committee. [5]Shortly thereafter, a large group of former Pan Am employees also sued Delta. Delta was able to combine and move the cases from New York to Atlanta. Delta was also able to prevent a jury trial, which, according to Business Week magazine, its attorneys had stated it would likely lose. The Atlanta judge then dismissed the lawsuits. In 1993, responding to Qantas and American Airlines innovation of codeshare agreements, Delta established its own code sharing arrangements, most notably with Air France, forming what would eventually become SkyTeam. By 1997, during which Leo Mullin was named CEO, Delta began large expansions into Latin America and in 1999 introduced the Boeing 777 into its fleet, for longer non-stop flights. During Mullin's tenure, Delta saw large expansions into Latin America and the Caribbean. This was also known as Delta's "technological growth period".[citation needed] Airport kiosks were introduced, Delta Technology was developed into an industry leading technology division,[citation needed] gate information display screens (GIDS) were rolled out, and internal software was thoroughly revamped. However, Mullin's legacy was ruined by labor woes, huge losses in the post-9/11 period, a major executive compensation scandal, and a bankruptcy filing less than 18 months after he abruptly retired. Throughout the 1990s, Delta maintained a secondary hub at Portland for its Asia operations. In addition to regularly scheduled flights to Delta's primary hubs during this time (Atlanta, Cincinnati, Dallas, and Salt Lake City), several of Delta's flights to Asia were routed from Portland and Los Angeles, using L-1011 and MD-11 aircraft. Destinations included Bangkok, Fukuoka, Hong Kong, Manila, Nagoya, Seoul, Taipei, and Tokyo. Delta was one of the airlines targeted in the failed Operation Bojinka plot: the conspirators planned to bomb a Delta MD-11 flying from Seoul to Bangkok via Taipei on January 21, 1995. Today, all Asia operations from Portland and Los Angeles have ceased. Asian service is offered from Delta’s Atlanta and New York – JFK hubs to Mumbai, India, Toyko, Japan, Seoul, South Korea, and Shanghai, China (effective March 30, 2008).[19][20] In 1996, Delta carried the Olympic Torch from Athens, Greece where it was lit, to Los Angeles, California for its traditional circuit to the Olympic Stadium in Atlanta, GA for the 1996 Summer Olympic Games, of which Delta was the official airline. In 1998, Delta and United Airlines introduced a marketing partnership that included a reciprocal redemption agreement between SkyMiles and Mileage Plus programs and shared lounges.[21] This scheme allowed members of either frequent flier program to earn miles on both carriers and utilize both carriers' lounges. Delta and United attempted to introduce an even cozier codeshare relationship, but this was deal was effectively killed by ALPA.[22] The marketing partnership ended in divorce in 2003 and paved the way for an expansion of the SkyTeam alliance. In 1999, Delta was a founding partner of the online travel agency Orbitz originally began by a group of several major U.S. airlines, which was purchased by Cendant in 2004. SkyTeam, a global alliance, was created in 2000 and Delta partnered with AeroMéxico, Air France, and Korean Air. Three years later, Delta implemented the largest domestic codeshare alliance with Continental Airlines and Northwest Airlines. Today SkyTeam now the second largest airline alliance in the world and continues to add members to its ranks.[citation needed] Fleet transformation in the early 2000sIn an effort to simplify its fleet and capitalize on cross-platform compatibility not only in pilot training but also maintenance, the airline began to retire its trijets (three-engine planes) in favor of twinjets (two-engine planes). Delta's entire active fleet is now composed of twinjets, and the airline is the world's largest operator of 767 aircraft:
BankruptcyImage:Deltaairline-logo-1.png
Logo of Delta Air Lines from March 2000 to July 2007 - Based on Soft Widget
As early as 2004, in an effort to avoid bankruptcy, Delta announced a restructuring of the company that included job cuts, and an aggressive expansion of Atlanta operations by some 100 new flights, making it a 'super-hub' and requiring the airline to spread its flight schedule more evenly across the day.[citation needed] This was known to all Delta employees as "Operation Clockwork". Atlanta is the largest hub for any airline in the world, with more daily flights (almost 1,000) to more destinations (246) than any other airline's hub. Further, by mid-2004 the airline had announced it would be closing its fourth busiest hub (Dallas-Fort Worth International Airport), which it did on January 31, 2005. In a hugely concessionary move, the pilots at Delta agreed to across-the-board 32.5% reductions in hourly pay rates in order to help the company stave off a bankruptcy filing. The agreement also included numerous changes in work rules, granting the company efficiencies in staffing and scheduling. On January 5, 2005, Delta introduced SimpliFares, a radical transformation of its fare structure, which cut its most expensive fares by as much as 50 percent nationwide and capped one-way domestic fares at $499 in coach class and $599 first class. However, due to continued high fuel costs, the company was forced to raise these fare caps by $100 in July, 2005, to $599 in coach class and $699 in first class. Airline fares are constantly in a state of flux, in addition to the constant change in fares due to the selling of seats allocated for lower fares. However, some claim that the SimpliFare is simply a marketing technique to alert the public that there is a maximum ceiling price for Delta's fares.[citation needed] Delta also launched a system of "same-day confirmed" whereby for $25, a passenger is able to confirm a seat on a different flight instead of standing-by. in August 2007, the "same-day confirmed" fee increased to $50. Also in 2005, in an attempt to increase profitability, Delta applied to serve a daily non-stop flight from Atlanta to Beijing, China starting in March, 2006, but rights were instead awarded to American Airlines operating from Chicago to Shanghai and Continental Airlines operating from Newark to Beijing. On August 15, 2005, in an SEC filing, Delta announced that it had finalized a deal to sell Delta Connection carrier Atlantic Southeast Airlines for $425 million in cash to SkyWest Airlines in an effort to obtain money to avoid bankruptcy. Analysts called the move a desperate one, estimating ASA's worth at around $700-$800 million — a price which SkyWest would not have been willing to pay.[23] On September 7, 2005, Delta announced that it would cut 26% of its flights at its Cincinnati hub and redeploy aircraft to its hubs in Atlanta and Salt Lake City.[24] The move will ultimately eliminate up to 1,000 jobs in Cincinnati. In addition and in hopes of increasing profit yields, the airline announced further international expansion into Europe and Latin America. On September 14, 2005, Delta filed for Chapter 11 bankruptcy protection for the first time in its 76-year history. The company cited high labor costs and record-breaking jet fuel prices as factors in its filing. At the time of the filing, Delta had $20.5 billion in debt, $10 billion of which accumulated since January 2001. Reorganization during bankruptcyImage:Delta b767-300er n1611b arp.jpg
Boeing 767-300ER in the livery used from 2000 to 2007
On September 22, 2005, Delta announced the acceleration of restructuring activities, targeting an additional $3 billion per year in cost reductions by 2007. $970 million of this amount was to come from debt relief, lease and facility savings, and previously commenced fleet modifications. Non-union workers' salaries were to be reduced by a minimum of 9% across the board, with a 15% reduction for executive officers and a 25% pay cut for CEO Gerald Grinstein. In December 2005, the Delta pilots agreed to an additional temporary 14% cut in pay, piggybacking onto the 32.5% taken at the beginning of 2005. This cut was made permanent with the ratification of an agreement in June 2006. Additionally, the company planned to lay off between 7,000 and 9,000 of its 52,000 employees.[25] As for its route network, Delta planned to alter its structure by reinforcing hub presence in Atlanta, Cincinnati, New York, and Salt Lake City, while at the same time increasing point-to-point routes, reducing domestic capacity by up to 20% while growing more profitable international route (especially Asia, Caribbean and Europe) capacity up to 25%. In 2006, Delta purchased rights to fly between New York and London from United Airlines.[26] On February 24, 2006, Delta, along with Continental Airlines and FedEx, saw future operations to Venezuela severely affected by President Hugo Chávez's decision to restrict flights coming into that South American country from the United States.[27] As of March 23, 2006, U.S. and Venezuelan aviation authorities were able to negotiate a solution to their dispute, likely ensuring that Delta's operations to Venezuela would not be curtailed in the future. On March 7, 2006, Delta announced expanded service from its prominent hub at New York-JFK. In addition to the expansion of mainline service at the airport, Delta would partner with Mesa Air Group to provide regional flights throughout the northeast under the Delta Connection banner. At the same time the airline announced an expansion to a number of new cities from its Salt Lake City hub. Based on all of these new initiatives, Delta projected a return to profitability by late 2007, based on a crude oil price model of $66 per barrel, in contrast to other bankrupt carriers' restructuring modeled on $55 per barrel. Delta would eventually reach this goal of full year profitability in 2007[28]. Delta announced that coach travelers in the United States who have a flight longer than four hours will have on-demand programming on all those flights starting in 2007 at their main hubs in New York, Salt Lake City, and Atlanta. This was to counter entertainment offerings of other airlines like JetBlue Airways, and take place of Song Airlines' service. Delta claims to offer the leading in-flight entertainment system in the United States. Live programming and music are free, and movies will be available on demand for a nominal fee in coach and for free in first class.[29] Delta also intends to install an improved in-flight entertainment system on internationally-configured aircraft, featuring a personal selection of movies. The system will be installed in all classes on Boeing 767-400ER and 777-200ER aircraft, and in the BusinessElite section on Boeing 767-300ER aircraft.[30] On November 9, 2006, the airline announced that it would recall 1,000 flight attendants that were previously laid off. In addition to the flight attendant recall, Delta announced in late December 2006 that it had exhausted its pilot recall list and was now accepting pilot applications for the first time in 5 years. They expected to take on close to 200 first officers through 2007.[31] On January 4, 2007, the airline announced an order for 30 Bombardier CRJ-900 regional jets with an option for 30 additional aircraft, pending approval of the bankruptcy court judge.[32] On February 9, 2007, the airline received bankruptcy court approval to buy these aircraft as planned. These aircraft will be operated by Delta Connection. Failed takeover attempt by US AirwaysDuring the later part of 2006 and early 2007, US Airways Group, holding company for US Airways, proposed an acquisition of Delta Air Lines. The combined entity would have been operated under the Delta name. This attempt was withdrawn after failing to gain support from Delta's major creditors and opposition by Delta management. On November 15, 2006, Bloomberg reported that US Airways Group, the parent of US Airways, proposed a takeover of Delta for $8 billion in cash and stock.[33] However, Delta's CEO reiterated that the best interests of Delta and its creditors were served by the company emerging from bankruptcy as an independent, stand alone carrier. In the ensuing days, Delta mounted an aggressive defense against the takeover attempt. In addition to Delta management, Delta employees appeared to be extremely skeptical of US Airways management's claims that a merger would result in no job reductions and provide a more secure future for a combined entity. Employees had started wearing "Keep Delta My Delta" buttons and campaigning to raise public awareness of their opposition to the proposed takeover.[34] On December 19, 2006, Delta announced (as expected) it rejected US Airways Group's proposed merger. Along with the announcement, it launched a media campaign against the merger to raise public support. The campaign, "Keep Delta My Delta", was picked up from the employee grassroots effort of the same name. The effort's website harbored an e-petition, quotes from prominent dissidents, and the effects the merger could have on selected localities. In its report, Delta cited many reasons for rejecting the bid, including it would lead to worse customer service, possible layoffs, an inefficient carrier, the carrier with the largest debt-load in the industry, and near-monopoly powers.[35] On December 20, 2006, Delta and its financial advisor, the Blackstone Group, declared that Delta would be valued at between $9.4 billion and $12 billion after emerging from bankruptcy, which would (at the time of this writing) give it a market capitalization comparable to that of Southwest Airlines Co. or greater than that of American Airlines' AMR Corp. and Continental Airlines, Inc. combined. US Airways Group CEO Doug Parker stated that Delta's self-valuation lacked credibility and was unrealistic.[36] Delta CEO Gerald Grinstein retorted by stating that the Tempe-based airline was "the worst of all potential merger partners".[37] On January 10, 2007, US Airways raised its bid by 20%, to $10.2 billion. The revised offer was set to expire by February 1 unless Delta's creditors opened the airline's books to US Airways and delayed a scheduled February 7 court hearing pertaining to Delta's reorganization plan.[38] Delta responded with a statement, claiming that "...the revised proposal does not address significant concerns that have been raised about the initial US Airways proposal and, in fact, would increase the debt burden of the combined company by yet another $1 billion."[39] That same day Delta Air Lines was speculated to be in talks with Northwest Airlines and United Airlines to fend off the US Airways bid.[40] CEO Gerald Grinstein, however, denied that any serious negotiatons were ongoing with Northwest or any other airline.[41] On January 28, 2007, US Airways holding company raised its bid by another $1 billion in cash according to the Wall Street Journal,[42] but company spokesmen denied any change.[43] On January 31, 2007, Delta's creditors rejected US Airways' hostile takeover attempt, and US Airways withdrew its offer to buy Delta. On the same day, executives and employees of the company gathered to celebrate the re-lighting of the historic "FLY DELTA JETS" sign at the company's main hub, Hartsfield-Jackson Atlanta International Airport.[44][45] Emergence from bankruptcyOn April 25, 2007, the airline's bankruptcy plan was approved by the Bankruptcy Court. On April 30, 2007, Delta Air Lines emerged from bankruptcy protection as an independent carrier. Delta also unveiled a new logo and new paint scheme. Delta's bankruptcy exit strategy was vastly different from that of United in that it expanded its way out of bankruptcy, rather than retrenching[citation needed]. Delta's previous stock was canceled as of Monday, April 30, 2007, and new shares are trading on a "when issued" basis on the New York Stock Exchange. These shares began trading normally on Thursday, May 3, 2007. The starting price was around $20.00 a share, and went up to as high as $23.35. But investors showed little confidence in the stock as the price fell to $19.00 later in the week. [46] Upon exiting bankruptcy, Delta also announced a 50% increase in operations at Los Angeles International Airport [6], thus establishing Los Angeles as Delta's second Latin America hub and new potential Asian gateway with a total of 99 daily departures. Post-bankruptcyImage:N706TW 1.jpg
Delta Air Lines' newest livery, seen here on an ETOPS Boeing 757-200.
On May 10, 2007, Delta announced a partnership with US Helicopter, who provides service from John F. Kennedy International Airport to several helipads in downtown Manhattan.[47] On July 12, 2007, Delta and its SkyTeam partners announced that they would forfeit slots in the European Union to relieve antitrust concerns.[48] On August 21, 2007, Delta named Richard Anderson, former CEO of Northwest Airlines and executive at UnitedHealth Group, as a replacement for outgoing CEO Gerald Grinstein. Anderson assumed the post on September 1.[49] On November 14, 2007, Pardus Capital Management LP, a hedge fund that owns 7 million shares of Delta and 5.6 million shares of United, called for the two carriers to merge. This action sent shares of both airlines up. However, the two airlines quickly denied official talks of any merger.[50] [51] [52] On January 15, 2008, Delta Air Lines was reported to be in merger talks with Northwest Airlines and United Airlines.[53] Although each airline has declined to comment officially, many notable newspapers, as well as industry analysts, expected an announcement as early as mid-February 2008 as to which airline the Delta Board of Directors would like to pursue a merger with. Delta has asserted that it will retain its name and its Atlanta hub in any merger, possibly as the surviving airline.[54] By late February 2008 the merger discussions with Northwest Airlines appeared to have broken down over pilot seniority issues[55]. Hub historyFormer hubs:
Former secondary hubs:[56]
AdvertisingDelta has had several different slogans throughout its history:
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