Delta  Air  Lines,  Inc.    SWOT  Analysis  – Internal  and  External  

Communications  in  Wake  of  Computer  Outage

The  Yellow  SWOT  MonstersEric  Cahall,  Michelle  Long,  Gurdeep  Singh

Presentation  AgendaEric  – About  Delta  Air  Lines,  Inc.Gurdeep -­‐ The  Situation/  The  Problem  Eric  – Financial  Picture  and  ImpactMichelle  – StrengthsGurdeep – Weaknesses

Michelle  – OpportunitiesEric  – ThreatsMichelle  – RecommendationsGurdeep – Conclusion

About  Delta  Air  Lines,  Inc.• Origins  date  back  to  1928• Inaugural  flight  on  June  17,  1929  from  Dallas,  TX  to  Jackson,  MS• Headquartered  in  Atlanta,  GA  • Serves  nearly  180  million  customers  per  year  worldwide• Over  80,000  employees  worldwide• Ranked  #3  among  domestic  carriers

The  Situation• Small  fire  causes  power  outage• Inaccurate  claim  that  Georgia  Power  had  an  outage• Partial  system  switch  to  backup  power• IT  system  that  date  back  to  the  1990s

The  Situation  Continued•Operated  2,340  of  about  6,000  scheduled  flights•Average  of  3,600  daily  twitter  conversations  about  Delta,  43,000  conversations  on  Monday  the  day  of  the  outage•Offered  travel  waiver/compensation

The  Problem• IT  Glitch  – nationwide  computer  outage• Thousands  of  canceled  and  delayed  flights  over  several  days• Overall  issue  – Delta’s  internal  and  external  communication  with  employees  and  customers➢Notice  and  response  time(s)  – too  long➢Inconsistent  answers  and  explanations➢Lack  of  strategic  communication  and  execution  plan

Delta  Five-­‐Year  Financial  PictureDelta  Air  Lines  Inc.,  Consolidated  Income  Statement

USD  $  in  millions

12  months  ended Dec  31,  2015 Dec  31,  2014 Dec  31,  2013 Dec  31,  2012 Dec  31,  2011

Operating  revenue 40,704 40,362 37,773 36,670 35,115

Cost  of  operating  revenue -­‐17,096 -­‐22,967 -­‐20,964 -­‐21,658 -­‐20,907

Gross  profit 23,608 17,395 16,809 15,012 14,208

Operating  income 7,802 2,206 3,400 2,175 1,975

Non-­‐operating  expense,  net -­‐645 -­‐1,134 -­‐873 -­‐1,150 -­‐1,206

Income  before  income  taxes 7,157 1,072 2,527 1,025 769

Net  income 4,526 659 10,540 1,009 854

Financial  Impact  of  Outage

SWOT  Analysis  -­‐ Strengths• Leadership  – Ed  Bastian,  Delta  CEO• Financial  Position  • Reputation• Social  Media/  Online  presence

SWOT  Analysis  -­‐ Weaknesses• Poor  Infrastructure• Lack  of  Contingency  Plan• Premature  Accusation

SWOT  Analysis  -­‐ Opportunities•Improve  and  stabilize  infrastructure  and  software•Offsite  Backup  •Develop  a  Contingency  Plan  •Regain  Customer  Satisfaction  Ratings  

SWOT  Analysis  -­‐ Threats

• Loss  of  power  or  equipment  malfunction

• Loss  of  revenue  

• Cyberterrorism/  hacking

Recommendations• Improve  Information  Technology  infrastructure  •Establish  an  Offsite  Backup  Location•Develop  a  Contingency  Plan  

• Test  Backup  Systems  Regularly  

Recommendations  Continued•Increase  Effective  Communication  with  Customers  and  Employees•Reduce  Ticket  Prices•Use  Current  Resources  More  Effectively  •Reconnect  with  all  customers  affected  by  the  power  outage

Conclusion

• Delta  had  a  computer  outage  on  August  8• Customers  were  not  notified  of  flight  delays/cancellations• Infrastructure  is  built  on  legacy  system  from  1990s• Prematurely  accused  Georgia  Power  to  be  at  fault

Conclusion  Continued

• CEO  posted  a  video  and  addressed  the  customers• Gave  vouchers,  refunded,  and  rebooked  flights  to  appease  customers• Delta  should  upgrade  software  and  hardware• Delta  should  implement  a  offsite  backup  and  test  regularly

Works  CitedAllison,  David.  "Expert:  Delta's  Computer  Outage  Unlikely  to  Permanently  Damage  Its  Reputation  or  Business."  Atlanta  Business  Chronicle.  American  City  Business  

Journal,  8  Aug.  2016.  Web.  12  Oct.  2016.

Carey,  Susan.  "Delta  Air  Lines  CEO  Takes  Responsibility  for  Outage."  WSJ.  Wsj.com,  2016.  Web.  05  Oct.  2016.

"Corporate  Stats  and  Facts."  Delta  News  Hub.  N.p.,  n.d.  Web.  13  Nov.  2016.

"Delta  History."  Delta  History.  N.p.,  n.d.  Web.  13  Nov.  2016.

"Delta  Air  Lines  Inc."  DAL  Annual  Cash  Flow  Statement.  MarketWatch  Inc.,  10  Oct.  2016.  Web.  12  Oct.  2016.

Holmes,  Frank.  "These  Are  the  7  Biggest  US  Airlines."  Business  Insider.  Business  Insider,  Inc,  06  Apr.  2016.  Web.  12  Oct.  2016.

Works  Cited  ContinuedHub,  Delta  News.  ".@Delta  CEO  Ed  Bastian  Apologizes  to  Customers  for  the  Disruption  to  the  Airline's  Operations  Today.https://t.co/Fl4mDAbdxN."  Twitter.  Twitter,  

2016.  Web.  05  Oct.  2016.

Investor  Update.  N.p.:  Delta  Airlines,  4  Oct.  2016.  PDF.  

Lasiello,  Emilio.  Getting  Ahead  of  the  Threat.  N.p.:  Aerospace  America,  July-­‐Aug.  2103.  PDF.

McCartney,  Scott.  "The  Best  and  Worst  Airlines  of  2015."  WSJ.  Wsj.com,  2016.  Web.  11  Oct.  2016.

Reuters.  “Brace  Yourself  for  More  Airline  Outages  Just  Like  Delta's.”  Fortune.  12  Aug.  2016.  Web.  Accessed  12  Oct.  2016.

Snead,  Jeremy.  "The  Financial  Loss  Delta  Suffered  for  Data  Center  Outage  Is  Shocking."  The  Financial  Loss  Delta  Suffered  for  Data  Center  Outage  Is  Shocking.  N.p.,  13  

Sept.  2016.  Web.  19  Oct.  2016.  

Thank  You!Questions?