Four Strategies for Success I Learned Touring Delta Headquarters With My Classmates
By Greg Haines, MBA ‘16
There are a number of benefits to taking a course with only eight students – lively class discussions, great faculty exposure, and professor-provided donuts from Ann Arbor’s famous Washtenaw Dairy, to name a few.
Last week we experienced another benefit of having a small group, when our professor arranged for an all-expenses-paid trip to Delta Air Lines’ headquarters in Atlanta.
The class is called Strategies for Growth, a case-based course in which we discuss the challenges and opportunities companies face as they grow. We cover topics including innovation, diversification, and M&A, and also discuss the issues that arise from the execution of these strategies.
A field trip behind-the-scenes of one of the world’s leading airlines was a great way to help us contextualize our discussions. We had a fantastic trip and learned a ton, so I thought I’d walk you through our day to give you a glimpse inside the airline, and how each group we visited contributes to Delta’s success.
10 a.m. – Flight Control: Maximizing Revenue through Flexibility
Our first stop was the Incident Briefing Room at Delta’s HQ – “the room we hope we never use” – where we met with the Managing Director of Flight Control.
In chatting with him we learned about a key competitive advantage Delta enjoys: its own in-house meteorology service that predicts airport-specific weather. The service helps enable Delta to smoothly handle weather delays and snag passengers from other carriers’ cancelled flights.
We also learned how Delta flexes its capacity to meet demand (including for such seemingly obscure events as Wal-Mart’s annual shareholder meeting, when Delta increases the number of flights to Arkansas).
11:30 a.m. – Fleet Strategy: Minimizing Costs by Leveraging Scale
Next, we met with the Managing Director of Fleet Planning & Analysis, who is responsible for buying more than 40 airplanes every year. He talked about the intense negotiations with Boeing and Airbus, and described how Delta leverages its $2B annual spend to negotiate favorable prices.
1 p.m. – Growth Strategy: Growing Profitably through Alliances
Over lunch, we met with the Managing Director of Network Planning (a Ross alum!) who discussed Delta’s growth plans via partnerships and alliances. She described Delta’s successful partnership with Virgin Atlantic, explained the factors that make a market attractive (e.g., corporate demand, growth, geography) and talked about Delta’s recent push to become the No. 1 airline in New York.
2:30 p.m. – Technical Operations: Building Customer Loyalty through Reliability
We then toured Delta’s TechOps center, where Delta performs much of the maintenance on its enormous fleet. In addition to getting up close and personal with multi-million dollar aircraft engines, climbing inside a 767 undergoing maintenance, and exploring the 2.7 million square foot facility (that’s 47 football fields!), we learned how Delta gains a competitive advantage from its maintenance operations.
Delta realized that dependability is a significant driver of preference, especially for business travelers. Delta has therefore taken steps to basically eliminate cancellations, except in severe weather (Can you remember the last time Delta cancelled your flight?). A giant digital billboard in the office monitors the completion factor - which exceeds 99.9 percent - a number that Delta executives said far outpaces other airlines.
5 p.m. – Control Tower: Bringing it All Together
Our last stop was the control tower, where we could look out over the entire airport and watch the planes landing and taxiing – it was an amazing vantage point and a fitting conclusion to our visit.
As we ate dinner and waited for our flight home, we discussed our newfound appreciation for the airline industry, Delta, and all the various components of the business that work seamlessly together to drive growth and profitability.
Now...off to prepare for our next class trip (to visit Xenith, an industry leader in football helmet technology, and a local Detroit manufacturer).
Greg Haines is a student in the Michigan Ross Full-Time MBA program. He’s set to graduate in May 2016.