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Authors: Richard Anderson
Published by: Harvard Business Publishing
Originally published in: "Harvard Business Review", 2014
Revision date: 15-Dec-2014

Abstract

When Delta emerged from bankruptcy, in 2007, its leaders knew that a full recovery would depend on innovative thinking. They began by instituting an employee profit-sharing program and a unique stock ownership plan that gives 15% of the company's equity to pilots, flight attendants, ground crew members, and support staff. Delta also deepened its foreign partnerships by buying a minority stake in three overseas carriers-Aeromexico, Brazil's GOL, and Virgin Atlantic-while strengthening its existing alliance with Air France-KLM. It moved toward vertical integration by acquiring the Trainer oil refinery, outside Philadelphia-a decision that shocked both aviation and oil industry observers, but succeeded in driving down the company's fuel costs while making its executives smarter about hedging, buying, refining, and transporting fuel. And it took back its reservations system, becoming the only US airline to own and control the data around it. Thanks to these and other unconventional moves, Delta is now one of the healthiest, most profitable airlines in the world.
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Abstract

When Delta emerged from bankruptcy, in 2007, its leaders knew that a full recovery would depend on innovative thinking. They began by instituting an employee profit-sharing program and a unique stock ownership plan that gives 15% of the company's equity to pilots, flight attendants, ground crew members, and support staff. Delta also deepened its foreign partnerships by buying a minority stake in three overseas carriers-Aeromexico, Brazil's GOL, and Virgin Atlantic-while strengthening its existing alliance with Air France-KLM. It moved toward vertical integration by acquiring the Trainer oil refinery, outside Philadelphia-a decision that shocked both aviation and oil industry observers, but succeeded in driving down the company's fuel costs while making its executives smarter about hedging, buying, refining, and transporting fuel. And it took back its reservations system, becoming the only US airline to own and control the data around it. Thanks to these and other unconventional moves, Delta is now one of the healthiest, most profitable airlines in the world.

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