Increasing Profitability in the Passenger Airline Sector: A case of two airlines

Project Type

group

Authors' Class Standing

Hannah Theis, Senior Meghan Sarbo, Junior/Senior Korey McGann, Senior Nathaniel Holcomb, Senior George Lindsay, Senior Eric LeSeige, Senior

Lead Presenter's Name

Hannah Theis

Faculty Mentor Name

Jayendra Gokhale

Abstract

In this paper, we plan on investigating and analyzing the investment and operating methods for both Southwest Airlines and Delta airlines. Taking data from the past ten years, we will compare and contrast the different strategies adopted by each company. We investigate the 127% increase in shareholder value of Delta airlines versus the 208% increase in the shareholder value for Southwest Airlines. Our research includes a study of their operations (such as hub and spoke versus point to point), fuel hedging strategies, and controlling operating cost and the effect of these strategies on the top and bottom line of the companies. From a loss of 3.18 billion dollars in 2005 Delta Airlines managed to turn around into a profitable company by the end of 2014. Southwest Airlines on the other hand, also managed to double its profits from 548 million dollars over the same period.

Share

COinS
 

Increasing Profitability in the Passenger Airline Sector: A case of two airlines

In this paper, we plan on investigating and analyzing the investment and operating methods for both Southwest Airlines and Delta airlines. Taking data from the past ten years, we will compare and contrast the different strategies adopted by each company. We investigate the 127% increase in shareholder value of Delta airlines versus the 208% increase in the shareholder value for Southwest Airlines. Our research includes a study of their operations (such as hub and spoke versus point to point), fuel hedging strategies, and controlling operating cost and the effect of these strategies on the top and bottom line of the companies. From a loss of 3.18 billion dollars in 2005 Delta Airlines managed to turn around into a profitable company by the end of 2014. Southwest Airlines on the other hand, also managed to double its profits from 548 million dollars over the same period.