Delta continues to make moves that could place it in an uncomfortable level of isolation
Although Delta Air Lines is facing the same revenue pressure as other US carriers, the company is one of the most successful airlines worldwide by any other number of measures; including cash flow, return on invested capital and shareholder rewards. Delta started the product segmentation movement in the US, allowing the airline to create competitive gaps with its rivals, which are in the early stages of creating fare families.
But Delta also makes moves that trigger a certain amount of head-scratching, reflected in its recent decision to pull a long-term sponsorship of a local Atlanta theatre after Qatar Airways held a private event celebrating its recent launch of service to the city. The decision generated negative PR for Delta and underpinned the general perception of its protectionist philosophy – running counter to the globalisation necessary for the airline industry to thrive.
Not surprisingly, Delta’s new CEO appears to be adopting a status quo stance on some of the more controversial issues that the company has adopted, including the Gulf airline subsidy debate and the privatisation of the US ATC system. The perception is that Delta increasingly presents a go-it-alone attitude, which could hurt its brand and image over the long term, as well as its prospects for international expansion.
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