DELTA AIR LINES

Company analysis for Delta Air Lines

Executive Summary

Delta Air Lines (Delta) provides scheduled air transportation for passengers and cargo throughout the US and around the world. Delta and the Delta Connection carriers offer service to more than 356 destinations in nearly 65 countries on six continents. The company is headquartered in Atlanta, Georgia and employs 80,000 people. The company recorded revenues of $31,755 million in the financial year ended December 2010 (FY2010), an increase of 13.2% over FY2009. The operating profit of the company was $1,904 million in FY2010, compared to an operating loss of $324 million in FY2009. The net profit was $593 million in FY2010, compared to a net loss of $1,237 million in FY2009.

Company analysis for Delta Air Lines

Company analysis

Delta Air Lines (Delta) is an air carrier that provides scheduled air transportation for passengers and cargo throughout the US and around the world. In 2008, the company completed its merger with Northwest Airlines. As a result of this merger, Northwest Airlines and its subsidiaries, including Northwest Airlines (NWA), became wholly-owned subsidiaries of Delta. The company offers service to 356 destinations in nearly 65 countries. In FY2010, Delta operated through a fleet of 815 aircraft of which 591 were owned by the company and the remaining aircraft were leased (Derudder, 2007).

The company has bilateral and multilateral marketing alliances with foreign airlines. Delta has international codeshare arrangements with Aeromexico, Air France, Air Nigeria, Alitalia, Avianca, China Airlines, China Southern, CSA Czech Airlines, KLM Royal Dutch Airlines, Korean Air, Olympic Air, Royal Air Maroc, VRG Linhas Aereas (GOL), Vietnam Airlines and Virgin Blue Airlines (and some affiliated carriers operating in conjunction with some of these airlines). In addition to marketing alliance agreements with individual foreign airlines, Delta is a member of the SkyTeam global airline alliance. The other full members of SkyTeam include Aeroflot, Aeromexico, Air Europa, Air France, Alitalia, China Southern, CSA Czech Airlines, Kenya Airways, KLM, Korean Air, Tarom and Vietnam Airlines. Delta generates revenues through a single business division, air transportation for passengers and cargo which operates through three business units, passenger, cargo and other.

Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. It also participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Delta Cargo is one of the largest cargo carriers among the US passenger airlines, based on revenue. The company generates cargo revenues in domestic and international markets primarily through the use of cargo space on regularly scheduled passenger aircraft.

Revenue Analysis

Delta recorded revenues of $31,755 million in FY2010, an increase of 13.2% over FY2009. For FY2010, domestic, the company's largest geographic market, accounted for 65.3% of the total revenues. Delta generates revenues through a single business segment, air transportation which operates through three business units, passenger (85.8% of total revenues in FY2010), cargo (2.7%) and other (11.5%) (Zook, 2006).

Revenue by geography

Domestic, Delta's largest geographical market, accounted ...