Delta Airline Harvard Case Solution & Analysis

Delta Airline Case Study Help

Stakeholder’s engagement

By means of development of high value-added products, consistent innovation and creation of empowering working environment for its workforce in order to fully realize their potential, the company spares no efforts in creating advantages for its shareholders, employees and a society as a whole. Delta Airlines is comprised of number of stakeholders who are varying in degree. Each and every stakeholder is detrimental to the overall success of the company and directly influenced by the economic activities and decisions of the corporation.

The primary stakeholder of the Delta Airlines is its customers including individuals, businesses, shipping/cargo and travel agencies. The company formed strong and positive relationship customers because successful relationships with customers are necessary for the business growth and success. The US based Travel Company - DeltaAirlinesis tackling the largest hurdle in the aviation industry through working to create the tools using customer data to improve the customer experience. Additionally, the company strengthen the relationship with customer through treating them respectfully and fairly, accommodating customer with disabilities, protect property and privacy of customers. To maintain the strong relationship with customer in the future, Delta should address their concerns and queries through taking their feedback regarding the service offered by Delta. In doing so, the company would be able to gather the valuable data and insights and effectively manage the customer relations.

In addition to this, the company has integrated the face-to-face learning as well as e-learning programs for the diversified growth and development of professional skill and competencies of employees. Another major endeavor of the Delta Airline is the long term strategic employee’s motivational development and the care measures to encourage the talent retention. It has also adopted equal employment principles and prohibited any form of the discrimination at the workplace. Furthermore, Delta has established the Delta Corporate University Program for the purpose of developing the skills and capabilities of employees an help in the development of their potential. It also provides the number of compensation packages to its employees which are more competitive as compared to the industry averages. In order to satisfy the employees, Delta should keepimplementing the occupational safety & health management in practice and assures the safety and health of the workforce and promote mental and physical well-being of employees.

Delta Airlines views its suppliers as long term partners. The company partners with suppliers to effectively manage the services. The suppliers of the company includes airplane part suppliers, petroleum industries, ground equipment and airports. Additionally, Delta Airlines also helps suppliers in operation cost reduction through energy saving, supply chain carbon footprint and carbon reduction management. The commitment to the company’s self-discipline and for the suppliers with the highest standard levels in dealing with the environmental protection, human rights and responsible business conduct tends to strengthen the Delta relationship with its suppliers. Delta could further improve the supplier relations through promoting the consistent and clear communication, regularly review performance and deliverables and cooperates with the suppliers with core consideration of reducing the carbon emissions as it would not only leads to reduction in the operational cost for both Delta and its suppliers but improves the competitiveness of the supply chain as a whole.

The company tends to hosts investors or the shareholders conference each quarter in which the operating condition and financial performance of the airline are discussed with them so that they feel involved in the business related practices and activities. Also, the investors or the shareholders are involved in the long term future development and strategic planning, which makes it more convenient for the shareholders or investors to understand the information of the company.Moreover the company is suggested to appreciate and value the opinions and suggestions of investors related to the corporate governance, financial affairs as well as corporate operations. Along with this, the company should be committed to provide the valuable feedback to the recommendations and suggestion provided by the shareholders or investors to reference for the future and long term strategies and goals.

Discussion Section

Environmental sustainability

It is pertinent to note that the Delta Airlines address the environmentalresponsibilities through making considerable amount ofinvestmentin advancing clean air travel technologies, driving innovation, establishing new projects that tends to mitigate the balance of the carbon aircraft emission and accelerating the reduction of waste and carbon emission. Delta Airlines constructed the sustainable and reliable energy system as one of the global priorities and is dedicated in developing the renewable energy solutions as well as solar power generation system. It also provides affordable renewable energy solutions for the low development zones in order to help maximum number of people to get the sustainable modern energy.

One of the most significant sustainable goals of the company is to accelerate the innovation of industries and helps in construction of the resilient infrastructure as they are the best and optimal solutions for those corporations which are facing the dual pressure of the sustainable development as well as climate change. As a part of this strategy, Delta Airlines has effectively implemented the internal incentive system for the purpose of providing the diversified energy saving solutions and accumulate innovative energy for the international customers. The application tends to include low carbon transportation and the smart manufacturing. Not only this the company has implemented the sustainable consumption and production into daily business operations through promoting low-carbon logistics, local procurement and green production measures and through promoting the green operation concept and green building factory management.

Properly and effectively responding to the climate change and its effects as well as taking the countermeasures are considered the major challenges of the sustainablebusiness strategy for any company due to which Delta Airlines tends to respond to the climate risk through mitigation and adoption and it continues to identify and evaluate the climate change opportunities. Additionally, various strategies are used by Delta Airline as a part of climate action such as

  • disclose of climatechangeinformation
  • participation in climate policy

Moreover, the company tends to shape the development of talent and improve the knowledge. Also, it promotes the basic subject education, and promote environmental education such as water and energy resources, and green building as well as improves the education opportunities in various developing nations and establishes the talent cultivation mechanism within an organization for the purpose of moving towards lifelong learning.

Social responsibility

Today, the society is facing even more severe challenges from the shortage of the water and energy resources, regional air pollution and the global warming. These type of the environmental issues and the severe problems from the departure of the skill labor have provided Delta Airlines with major emphasis for the corporate social responsibility (CSR) strategies. Since its establishment, Delta Airlines has been committed and devoted to the promotion as well as implementation of the corporate social responsibility. The company’s results in promoting the corporate social responsibility has received the widespread appreciation and recognition.

The company is inherently focused on manage the effect of the jet fuel use as a part of its strategy of reducing the net aviation emission by 50 percent by the end of the calendar year 2050. Additionally, the company attempted to meet the financial goals of profitability and growth through innovative business practices that tends to reduce the environmental impact of the operation of the business as well as promote the productivity, health and welfare of the individual and the communities, the company employs and serves.

Delta's authority in social obligation, advancement, culture and more has by and by brought about the worldwide carrier today being named one of Fortune magazine's Top 50 Most Admired Companies for the seventh continuous year. The corporate social responsibility and the business development of Delta Airlines are tied together due to which the Delta has been engaged in offering the energy saving solutions that are lead in the energy efficiency and are innovative. Delta Airlines could further accelerate its efforts of fulfilling the corporate social responsibility (CSR) goals and objectives through balancing stakeholder interest, sound corporate governance and supporting social progress(report, 2017).

Recently, the Delta Airlines announced an initiative that includes the 1 billion dollar investment and the 10 year commitment in order to become the first carbon neutral airline. The company intends to work to accelerate the reduction of the waste and carbon emission and advance clean air travel technologies. For the reduction of the carbonemission from aircraft, Delta is contemplated to reduce the jet fuel usage and increase efficiency which includes the increased development, weight reduction, improved flight operations, fleetrenewal program and use of the sustainable aviation fuel. For the removal of carbon, the company would make investment in the efforts that remove the carbonemission from the atmosphere as well as examine the carbon removal opportunities through various techniques and methods(GENNARIA, 2020).

Economic Responsibility

As the economic responsibility primarily on eth sustainable profit generation, appropriate payment of wages to the employees, payment of business taxes, and mainly to meet the obligations for financial stability. With the changes in the regulations in the United States and across the globe, the organization is expected to experience additional regulations, permitting requests to conduct the business operations and tax payment in regards to emissions. This mainly includes the requirements from many jurisdictions for the operation of similar service. As a consequence of the ongoing discussion between the United States and other countries, CORSIA – Carbon Offsetting and Reduction Scheme for International Aviation – a global, market-based emissions offset program was adopted by the ICAO – International Civil Aviation Organization which began for the purpose of monitoring, reporting, and verification in the year 2019.

The success of Delta airlines in terms of connecting the global communities both in the air and on the ground is significantly credited by no less than 80,000 employees. The average attrition rate of the organization is estimated to be less than 5 percent which falls under the industry average. Delta represents the best profit-sharing plan for the industry that is likely to occur in the United States that includes 15 percent of its profits provided to its employees other than their salary amount.

Over past five years, the payouts have increased to about $1 billion. Similarly, the 401 (k) plan of the industry that is known for the provision of about 9 percent contribution from Delta mainly includes about 3 percent investment of the organization and dollar-for-dollar match of about 6 percent in response to the 6 percent contribution of the plan member. Additionally, Delta Airlines has significantly funded about $7 billion into the pension plans for the period of past five years.

The initiatives of the organization were mainly divided into three categories based on the type of goal duration, reliability, and sustainability which are:

  1. Short-term – Improved fuel efficiency
  2. Medium-term – Achieving neutral growth of carbon
  3. Long-term – Reduction in carbon emission

Concerning the improvement in the fuel efficiency, as a short-term goal it was considered to improve at the rate of 1.5 percent from the year 2009-2020. Currently, the improvement rate is about 9.16 percent since 2009 whereas the per annum average was estimated to be about 1.02 percent i.e. lower than the goal. In order to bring improvement in the fuel efficiency, the organization is taking measures to upgrade the fleets, weight reduction through onboard rightsizing, and reduction in the use of auxiliary power unit. With thousands of flights on daily basis at global level, the effort of onboard rightsizing approach has significantly brought reduction in the burning of fuel by approximately 330,000 gallons followed by the emission of fleet to about 3200 metric tons.

The medium-term goal of the organization tend to be in association with the achievement of carbon-neutral growth for international aircrafts. But the goal of CORSIA for capping the international emission is expected to begin in the year 2021. Despite the fact, Delta Airlines are known to purchase carbon offsets for the maintenance of the emissions since the year 2013. Since then, the organization has significantly demonstrated the purchase and retiring of about 9 million carbon offsets. Additionally, the organization was committed to retire about 3 million offsets for the growth of the organization in the year 2018 as compared to the levels of the year 2012. Therefore, these offsets were to be purchased and retired in the first quarter of the year 2019.

Similarly, the reduction in the carbon dioxide emission is expected to decrease to half from the emission levels of the year 2005 to 2050. For this purpose, initiatives regarding annual fuel savings has been taken by the organization which has led to the reduction of CO2 emission by 11 percent since the year 2005. Despite the fuel efficiency efforts of aircraft, other related efforts mainly include the utilization of about 13.5 percent electric motors in the ground supporting equipment. The objective is to diminish ozone harming substance discharges underneath the earlier year's level. (Officials, 2018 Corporate Responsibility Report, 2018)

Corporate Sustainability Strategy

The U.K-based web portal has reported on the investment on sustainability namely Delta as the Best Corporate Offsetting programme due to its first mover advantage to offer its customers with carbon offsets. (Gay, 2019) The sustainable strategy of the organization is committed for the production of significant outcomes through maintenance and focus on three factors: reduction of the carbon footprint, recycle and reduce wastage and promoting engagement between employees and communities. (Writer, Fueling a Sustainable Airline: Why Delta's promise to connect the world begins with caring for it, 2020)

Reduction of carbon footprint

As the primary concern of the sustainable strategy of Delta tend to be mainly associated with the reduction in the carbon footprint i.e. mainly through the purchase of carbon offsets. This is known to provide customers with the opportunity to offset their own travel. The amount paid by the customers provide them the ability to estimate the carbon emissions that tend to be in association with their own travel. Similarly, the investment of Delta to optimize the use of jet fuel and more fuel efficient fleet serve as the two primary opportunities for better management of carbon footprint in future. This is mainly due to the reason that use of jet fuels mainly account to about 98 percent of the total emissions and the second-largest operating expense of the Delta Airlines............................................


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