Depreciation at Delta and Singapore Airlines Case (Introduction) A question is asked, “What makes a business successful?” While this question can have many answers, the financial standing among of the businesses in comparison can make a strong argument. One way to tell how financially fit said business by looking at the net earnings Airline companies consider Property, Plant, and Equipment (PP&E) as a significant portion under the asset category on the balance sheet. 1. Calculate
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Strategic Plan of Delta Airlines Abstract Delta Air Lines, Inc. (Delta) is an air carrier based in Atlanta, Georgia that provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company offered customers service to destinations with Delta and Delta Connection carrier service to 321 destinations in 58 countries in January 2008. To Latin America and the Caribbean, Delta offered more than 500 weekly flights to 63 destinations in January
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Study- 1. Industry & Market: Delta is in the airline industry. It is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism. There are few industries that create the amount and intensity of attention that airlines receive. Delta is the world’s largest airline in terms of both fleet size and scheduled passenger traffic. Delta’s major competitors are Southwest Airlines and United Airlines. 2. External Environment:
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Overview of Airline Industry Depreciation Policies, 12/22/99 CFRA believes that certain airline companies have recently obtained an earnings boost by extending the depreciable lives and increasing the residual values relating to operating aircraft. In addition, some airlines have recently recorded one-time write-downs and losses on the sale of aircraft, leading to questions about the proper depreciable life of aircraft. Typically, an airline’s aircraft depreciation expense is derived by initially
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Delta 1. (a) Fuel cost drives the airline industry. Fuel cost average anywhere from 30% to 50% of total operating costs in the airline industry and crude oil and jet fuel costs had been on the rise. (b) The refining industry in the US is defined regionally by petroleum administration for Defense Districts (PADD), a system put in place during the Second World War. 2. Rising fuel cost is truly a problem for Delta. In 2011 Delta was hit hard by rising fuel cost. Deltas total fuel cost had
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Political-Legal Environment: Delta Airlines Delta Air lines is not immune to the political and legal structures that exist both domestically and globally. There are many factors that affect the political and legal structures for Delta in their domestic environment of the United States and also in the global environment of Europe. Teresa Cederholm in her article on MarketRealist.com states “The airline industry is widely impacted by regulations and restrictions related to international trade, tax
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Delta airlines has been around for quite some time and has always been advertising the same basic aspects of their company, which are travel and that they provide exceptional service in the sky. Delta airlines has always had ads circling to advertise their company to entice travelers to fly with them as oppose to other large carriers. The ad from 1950 and the ad from 2010 are both similar in simple ways but very different in other ways. The delta airlines ad from 1950 and 2010 are similar in simply
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MASTER BUSINESS STRATEGY CONSULTING , DELTA AIRLINES CASE To determine the profitability of the airline industry, we will do an industry analysis using Porter’s five-forces framework a) Rivalry among existing competitors Concentration The concentration and the number of competitors make very difficult any agreement about pricing. Diversity of competitors There are many competitors with approximately the same size, especially for the legacy carriers. Product differentiation
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1) DELTA AIRLINE | PRIOR TO JULY 1, 1986 | JULY 1, 1986-MARCH 31, 1993 | MARCH 31, 1993- PRESENT | RESIDUAL VALUE | 10% | 10% | 5% | USEFUL LIFE | 10 years | 15 years | 20 years | Depreciation expense per $100 of gross aircraft value annually $100*10%= 10 Depreciation= (asset value- residual value)/ asset life $100-10=90/10 years= $9 per year PRIOR TO JULY 1ST, 1986 $100*10%=10 $100-$10= 90/15 years= $6 per year JULY 1ST, 1986 TO MARCH 31, 1993 $100*5%= 5 $100-$5= 95/20 years=$4
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Case 27 Delta Air Lines (2012): Navigating an Uncertain Environment FOF #1: Differentiation In order to compete in a pricesensitive industry, Delta Air Lines needs to focus on differentiating itself from competitors. By doing this, Delta is creating sustainability through customer retention and loyalty. To set itself apart from competitors like United Airlines and American Airlines, Delta needs to implement a program to improve customer service. Because of Delta’s poor service reputation
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