Speaker 1: Greetings, ladies and gentlemen, and welcome aboard today's episode. Delta
Speaker 1: is currently the second largest airline in revenue and second
Speaker 1: in passengers carried. From its humble beginnings as a crop
Speaker 1: dusting operation, and despite the occasional turbulence, this airline would
Speaker 1: soar too massive high. But in two thousand five, Delta
Speaker 1: filed for bankruptcy, and they weren't the only ones losing altitude.
Speaker 1: This seemed to be a pretty big decade for airline failure.
Speaker 1: But while other airlines were permanently grounded, Delta once again
Speaker 1: took wing. And how did they do that? We'll buckle
Speaker 1: in and return your trade tables and seats to their
Speaker 1: upright positions as we take off for Delta on the brink.
Speaker 1: Hey there, everybody. I am Jonathan Strickland and I'm Aerial
Speaker 1: cast and Ariel I. I have to take my metaphorical
Speaker 1: hat off to you for writing that intro because there
Speaker 1: were so many puns it was. It was a beautiful thing.
Speaker 1: I love puns. And as we have alluded to, we
Speaker 1: will be talking about Delta Airlines and uh, for interest
Speaker 1: of full disclosure, before we even get started in this,
Speaker 1: my wife works for Delta, so I but you know,
Speaker 1: she has no saying what I do here, just as
Speaker 1: I have no say in what she does at Delta. Well,
Speaker 1: my husband does not work for Delta, but he sometimes
Speaker 1: rides it. Yeah, we've both both flown a few times.
Speaker 1: You a bit, quite a bit, But as as a
Speaker 1: spouse of someone who works for Delta, I have flown
Speaker 1: quite a bit. And Delta has a really fascinating history.
Speaker 1: Delta is one of those companies where it's not super
Speaker 1: easy to point at a company timeline and say here
Speaker 1: is where it all began, because it actually there were
Speaker 1: a lot of things that led into the creation of
Speaker 1: Delta as a as a company, and as our series
Speaker 1: title suggests, a lot of things that led into the
Speaker 1: brink as well. It wasn't just one instance and bam,
Speaker 1: there there. Yeah, there was actually decades of policy that
Speaker 1: got overturned in the nineteen seventies. Spoiler alert will get
Speaker 1: there and and we'll talk about how that really was
Speaker 1: both a good thing and a bad thing and had
Speaker 1: unintended consequences. But to start with, just to get an
Speaker 1: overview of where Delta came from. In back in nineteen twenty,
Speaker 1: some guys named Thomas Huff and Elliott de Land created
Speaker 1: the Ogdensburg Errowway Corporation in New York, and in nineteen
Speaker 1: twenty five they renamed it the Huff de Land Aero Company,
Speaker 1: and they relocated out of Bristol, Pennsylvania. And at that
Speaker 1: point they weren't an airline. They weren't taking people or
Speaker 1: even stuff anywhere. They were building airplanes mostly for the military,
Speaker 1: and their next step was also not necessarily moving people around.
Speaker 1: They then started huff Dalon Dusters as a subsidiary company
Speaker 1: of huff daland Arrow, and it was the first commercial
Speaker 1: agricultural fine company. So they did crop dusting. Yeah, and
Speaker 1: this was out of a place that we're both familiar with,
Speaker 1: Macon Georgia oh Man Makon Bacon and uh yeah. They
Speaker 1: started off building out a small fleet, although it was
Speaker 1: the largest privately owned fleet at the time, but it's
Speaker 1: still small, eighteen whole planes. Yeah, yeah, And they also
Speaker 1: moved into doing some mail carrying, and you know, shortly
Speaker 1: after crop dusting people carrying I hope not simultaneously. Yeah.
Speaker 1: Then in the late nineteen twenties, Ce Woolman comes in
Speaker 1: buys the company and decides that he doesn't care for
Speaker 1: the huff Dalon Arrow company name, so he renames it
Speaker 1: and he calls it Delta Air Service. Now why Delta, Well,
Speaker 1: that would be because they served at the Mississippi Delta region. Yep.
Speaker 1: So in the late twins they also incorporated and they
Speaker 1: began their first passenger flights. So let's say I want
Speaker 1: to get from point A to point B and I
Speaker 1: want to fly Delta. Where are point A end point B,
Speaker 1: Texas and Mississippi, And you have to be one of
Speaker 1: the lucky five total passengers on their planes at that time. Yeah,
Speaker 1: five passengers one pilot, which, if you if you ask me,
Speaker 1: not a bad ratio. But you know, having recently been
Speaker 1: on a puddle hopper, tiny, little, cramped a little plane, yeah,
Speaker 1: I rarely fly on planes that small, and my wife
Speaker 1: never will. I cannot convince her to get on those.
Speaker 1: She's she says, if the plane is to the size
Speaker 1: where she could reach her arms out to either side
Speaker 1: and touch walls, she doesn't. She wants some bigger plane.
Speaker 1: Uh So, nineteen thirties they start service to the city
Speaker 1: that you have to go through. Now, if you're on Delta,
Speaker 1: at least, that's the joke. Which is Atlanta, our hometown.
Speaker 1: So this episode is also a big shout out to
Speaker 1: a major power player in our city. And they decided
Speaker 1: that they weren't going to continue passenger services for a
Speaker 1: couple of years because they got another gig, yeah, flying
Speaker 1: mail routes for the postal service. So I guess the
Speaker 1: letters were more important than the people trying to get
Speaker 1: from Atlanta to Texas to Mississippi. People still have buses.
Speaker 1: It's hard for a letter to board a bus and
Speaker 1: get off at the right location. Gosh darn it, they're
Speaker 1: perishable goods in this in this box. They're really really
Speaker 1: bad at directions. Um yeah. So uh. Then they eventually
Speaker 1: start flying under the name Delta Airlines, and they began
Speaker 1: to offer night service flights in nine yes, with two pilots, wow,
Speaker 1: and eight passengers. Now at this point, Delta, while it
Speaker 1: is flying passengers, was not one of the big major
Speaker 1: airlines in the United States. No, the big four were
Speaker 1: Eastern t W A United An American. And then we had,
Speaker 1: uh this bit of legislation that would take take take
Speaker 1: control for the next four decades, which was the Civil
Speaker 1: Aeronautics Act of nineteen thirty eight. Yes, and This allowed
Speaker 1: Delta to jump into the market of the Big four
Speaker 1: and kind of be a competitor. Yeah, it allowed for
Speaker 1: better market growth. What's important to remember here, and we'll
Speaker 1: talk more about it in just a second, but this
Speaker 1: was an era where in the United States, if you
Speaker 1: had an airline that flew flights between states, so you
Speaker 1: went beyond one state into another, then you fell under
Speaker 1: the purview of an agency, and you were you had
Speaker 1: to agree to certain rules on a federal level, and
Speaker 1: that included things like the federal government setting the rates
Speaker 1: for airfare and what your schedule was and what routes
Speaker 1: you could fly. And in these early days, what that
Speaker 1: helped to do is establish an industry. But as we'll
Speaker 1: see as we go along, the longer that policy stayed
Speaker 1: in place, the more constrained everybody was. Moving on with
Speaker 1: Delta's history. Yes, in the nineties, they added flight attendants,
Speaker 1: which were called stewardesses at the time. Yes, we are
Speaker 1: more elevated in our thinking these days, we are. And
Speaker 1: they also moved their headquarters to Atlanta, so they had
Speaker 1: service to Atlanta, but now they're going to be based
Speaker 1: out of Atlanta. And then they also started modifying their
Speaker 1: airplanes to contribute to World War two efforts because that
Speaker 1: was happening. And then they were training military pilots and
Speaker 1: mechanics for their planes if you listen to our episode
Speaker 1: on Harley Davidson, similar to what Harley was doing with
Speaker 1: their bikes and training people to service their bike right,
Speaker 1: and that this would end up serving the company well
Speaker 1: post war because they would have a larger infrastructure in place.
Speaker 1: They also underwent another name change. Yes, they became Delta Airlines, Incorporated.
Speaker 1: And they hit one million passengers flown on Delta Airlines,
Speaker 1: which you know is a lot when you consider they're
Speaker 1: flying him like five or eight of the time, maybe
Speaker 1: maybe a few more by that time. And also they
Speaker 1: had traveled half a billion passenger miles with no fatalities.
Speaker 1: They're recognized by the National Safety Council for that ten
Speaker 1: years of no fatality success. And they introduced a special
Speaker 1: class of flying for those who were on a budget
Speaker 1: like me. No, they introduced coach service from Chicago to Miami.
Speaker 1: So I guess if you're going to the windy City
Speaker 1: to Miami, I would say if if you're going from
Speaker 1: the greatest city to the sunniest city, I don't know
Speaker 1: that Chicago's right lovely. So nineteen fifties that's when they
Speaker 1: begin to incorporate a hub system. And this is something
Speaker 1: that became common in the airline industry for the big
Speaker 1: airlines in the United States. The idea that you create
Speaker 1: a base of operations in a major city and you
Speaker 1: have a lot of flights out from that area. You
Speaker 1: don't necessarily do a lot of direct flights city to
Speaker 1: city across the States. So if you want to get
Speaker 1: from point A to point B, you've got to fly
Speaker 1: through Atlanta first. Yes, that was the joke. Is it
Speaker 1: still is? You know? I was trying to get back
Speaker 1: from New Hampshire to Atlanta and I had to fly
Speaker 1: through Philadelphia, which seemed a little off course for me.
Speaker 1: I once had to fly home from Philadelphia to Atlanta,
Speaker 1: but because of the way the flights had filled up,
Speaker 1: I had to go Philadelphia Cincinnati. Since at E D C,
Speaker 1: d C Atlanta. That sounds like an adventure. It was
Speaker 1: a long day. Yes, Delta had several hubs. Atlanta remains
Speaker 1: Delta's hub, but for a while it also had Cincinnati,
Speaker 1: and I believe it still has Salt Lake City, So
Speaker 1: those would be the major hubs for Delta, but different
Speaker 1: airlines have different cities as their hub. Yes. Also in
Speaker 1: the nineteen fifties, Delta installed radars in the noses of
Speaker 1: their aircraft and they also got their first logo. Wow,
Speaker 1: it's amazing that they had been around for decades and
Speaker 1: they get their first logo in nineteen fifties in the
Speaker 1: In nineteen sixty six, the c woman who had purchased
Speaker 1: Delta from the original creators back uh several decades earlier,
Speaker 1: passes away. Yes, they gave a huff dollond duster to
Speaker 1: the Smithsonian a remembrance of him, which is kind of cool.
Speaker 1: That's kind of cool. Uh. They hit fifty years old
Speaker 1: once they get into the nineteen seventies, and at this
Speaker 1: point they had moved away from airplanes entirely. The entire
Speaker 1: fleet was now jet aircraft, no longer prop planes necessarily,
Speaker 1: and they end up hitting their first hitting a major
Speaker 1: financial loss by night. This is a point where they
Speaker 1: actually were in some pretty dire straits financially, so they
Speaker 1: turned to their employees as one of the ways that
Speaker 1: they could recover. Yeah, they raised about thirty million dollars
Speaker 1: from payroll deductions. Yikes. Never a fun thing. Yes, and
Speaker 1: they took up money and purchased their first Boeing seven
Speaker 1: sixties seven. Yes, they call it the Spirit of Delta, which,
Speaker 1: by the way, there there is always at least one
Speaker 1: Spirit of Delta. If you pay attention when you get
Speaker 1: on the plane, you might notice if you're on the
Speaker 1: Spirit of Delta. I have not flown on the Spirit
Speaker 1: of Delta. Despite the fact that I've flown Delta many
Speaker 1: many times, I'm going to assume that I haven't. By
Speaker 1: this time in the eighties, Delta is the fourth largest
Speaker 1: carrier in the US, fifth in the world because of
Speaker 1: a Western Airlines merger, and they also start Transpacific service
Speaker 1: to Agya. And in the nineties they would continue their
Speaker 1: their path of growth. Uh they were part of the
Speaker 1: Civil Reserve air Fleet during operations Desert Desert Shield and
Speaker 1: Desert Storm, and PanAm, which had gone bankrupt in ninety one,
Speaker 1: would end up having its assets largely purchased by Delta,
Speaker 1: so routes and PanAm Shuttle were acquired through this process.
Speaker 1: So PanAm was one of a whole bunch of airlines
Speaker 1: that went bankrupt around this time. Essentially, you started seeing
Speaker 1: a lot of airlines going bankrupt towards the end of
Speaker 1: the seventies all the way up through the mid two thousand's. Uh.
Speaker 1: And it was ugly, y'all. Yes, but Delta did get
Speaker 1: to its profits in and it also introduced Olympic planes
Speaker 1: because the Olympics were in Georgia and that was where
Speaker 1: Delta was headlined. And then we're getting into what we
Speaker 1: were alluding to earlier with the brink. So why if
Speaker 1: things are going so smoothly for Delta, I mean, despite
Speaker 1: the the blip that they had in the nineteen eighties,
Speaker 1: why did they have this issue where they had to
Speaker 1: go into bankruptcy protection? And moreover, how did they climb
Speaker 1: out of it. We're going to talk about the unintended
Speaker 1: consequences of deregulation when we come back from this word
Speaker 1: from our sponsor. So earlier I mentioned that you had
Speaker 1: this thing happened in that ended up really affecting the
Speaker 1: airline industry and gave Delta an early boost. That was
Speaker 1: this same issue that we would see dismantled in nineteen
Speaker 1: seventy eight. Yes, the Airline Deregulation Act of nine to
Speaker 1: be exact, it allowed a bunch of smaller airlines to
Speaker 1: open up and cause the larger airlines to have to
Speaker 1: kind of scurry to keep up with the competition. Yeah.
Speaker 1: So with regulation, with the government setting these things like
Speaker 1: setting the air fare rates and setting routes and setting schedules,
Speaker 1: it was starting to rub passengers the wrong way because
Speaker 1: airfares were high. There was no competition because the government
Speaker 1: told you how much the tickets had to be a right,
Speaker 1: so there was no way for one company to say, well,
Speaker 1: we're going to try and win more customers by dropping
Speaker 1: the air fare for the one route. You didn't get
Speaker 1: to decide all your routes. You could propose routes, but
Speaker 1: the government would have to approve it. So if you
Speaker 1: wanted to propose a new route from Atlanta to let's
Speaker 1: say Topeka, Kansas, you'd have to submit that to the
Speaker 1: government first before you could get actual approval to do that. Uh.
Speaker 1: You had to submit schedules to the government too. This
Speaker 1: was all meant to help make sure the industry grew
Speaker 1: in a way that was uh supported by the government.
Speaker 1: But at this point, a lot of the a lot
Speaker 1: of the customers were not terribly happy because they felt
Speaker 1: like they were paying a lot of money for things
Speaker 1: that probably could be of rated lower put at a
Speaker 1: lower cost. The the airlines themselves, the big ones weren't
Speaker 1: terribly upset with the regulation. They were getting pretty regular.
Speaker 1: I was thinking prices exactly they were making. They were
Speaker 1: making bank is what they were doing. But then in
Speaker 1: the government decides to deregulate the industry. This creates an
Speaker 1: incredible amount of competition rapidly, and so you started getting
Speaker 1: into price wars, and you're talking about companies that haven't
Speaker 1: had to deal with this for four decades. Yes, some
Speaker 1: of those price wars meant cutting airfares so low that
Speaker 1: it was starting to eat into profit margins. It was
Speaker 1: starting to make the companies, uh, become less stable financially.
Speaker 1: They had they had to deal with airlines that had
Speaker 1: smaller fleets and less bells and whistles. But we're offering
Speaker 1: flights out a fraction of the cost, which you know
Speaker 1: all those coach passengers are all about. Right. So the
Speaker 1: question was should the larger companies focus mainly on longer
Speaker 1: flights that these smaller airlines weren't really able to accommodate. Uh,
Speaker 1: you know, how could they compete in that same space?
Speaker 1: And we saw a lot of airlines start up in
Speaker 1: this era, we saw a lot of them shut down.
Speaker 1: We saw a lot of both, Like we saw a
Speaker 1: lot of the same ones that start up failed well.
Speaker 1: And three of the big original four airlines did not
Speaker 1: survive this competition, PanAm, Eastern, and t w A all folded. Yeah,
Speaker 1: so this gut ugly. It also led to some pretty
Speaker 1: big cost cutting measures for the companies that did survive.
Speaker 1: So people who worked for these airlines started to see
Speaker 1: their salaries uh stagnate, like wages were not going up
Speaker 1: along with the rest of the industry and um. And
Speaker 1: then we also hit at this time an economic slowdown. Yes,
Speaker 1: so multiple things are all happening around this era, and
Speaker 1: and the fallout of this deregulation Act would take of course,
Speaker 1: it would take decades to unfold, to unravel, right, I
Speaker 1: think generally speaking, when people who oppose government regulation are
Speaker 1: thinking those thoughts, they point to things like the regulation
Speaker 1: of the airline industry and say, see how that was
Speaker 1: bad for customers because we had this mandated airfare and
Speaker 1: you couldn't get that bargain price to to go fly
Speaker 1: you know, whatever airline you wanted. You were stuck having
Speaker 1: to pay these higher the higher costs on the flip
Speaker 1: side of that. Uh, it solved some problems, but it
Speaker 1: made other problems. Yeah. Yeah, it's's constant battle, you know,
Speaker 1: even today between what is good for the customer and
Speaker 1: what is good for the company and finding that right balance. Um.
Speaker 1: But Delta is hit kind of especially hard by these
Speaker 1: smaller airlines like air Tran in Jet Blue because they
Speaker 1: didn't have a lot of international travel, so most of
Speaker 1: their travel was domestic Delta that is, so they're in
Speaker 1: direct competition with these small airlines. They don't have extra
Speaker 1: you know, revenue builders out there, right because it wouldn't
Speaker 1: be for a few years before Delta would start building out.
Speaker 1: It's more of its international travel. They had a little bit,
Speaker 1: but it's not what they were known for right now
Speaker 1: more than like I think of their revenue came from
Speaker 1: domestic flights. So where when you see a more competition
Speaker 1: in your space where your where your bread is buttered,
Speaker 1: then you're gonna take a hit. But even still they
Speaker 1: were struggling along and then then we have the absolute
Speaker 1: awful disaster September eleven terrorist attacks. Yes, I was supposed
Speaker 1: to fly that day. I it was a little unreal
Speaker 1: for me. I was working at a daycare with children
Speaker 1: at the time, so someone told me what happened. I
Speaker 1: had to wait for a break to go watch a
Speaker 1: TV and it horrible. Yeah, it's still surreal to think
Speaker 1: about that day. And of course, you know, I didn't
Speaker 1: fly that day. All flights were grounded and this was
Speaker 1: across all airspace in the United States. It lasted for
Speaker 1: two days and UH stranded a lot of people in
Speaker 1: a lot of different places. Also meant that airlines were
Speaker 1: really in a bind to try and UH once operations
Speaker 1: began again to get people to where they would be,
Speaker 1: they were understandably really hesitant to fly at this point. Yeah,
Speaker 1: and so Delta, Delta was not alone in this. I mean,
Speaker 1: all the airlines took a massive hit from this, but
Speaker 1: Delta ended up losing two point four billion dollars over
Speaker 1: the course of two thousand one and two thousand two.
Speaker 1: It was their first financial loss in six years. And um,
Speaker 1: it was only the beginning of their kind of nose
Speaker 1: dive into the brink. Yeah. They decided to try and
Speaker 1: compete more directly with these budget airlines by launching a
Speaker 1: a service called Song and this was their their version
Speaker 1: of budget flights I've flown on Song aircraft before. Actually
Speaker 1: Song Aircraft they got a few amenities before some of
Speaker 1: Delta's other aircraft did that. I really liked a lot. Yeah,
Speaker 1: but you know what, Song overall didn't do very well.
Speaker 1: That's true. Um In two thousand three, their CEO, Leo
Speaker 1: Mullin retired, Yeah, this was where when he retired, one
Speaker 1: of the things that he was getting criticized for was
Speaker 1: that he had offered some massive bonus packages for executives,
Speaker 1: a lot of golden parachutes. Yeah, when they're supposed to
Speaker 1: be cutting costs and when they're not offering their employees
Speaker 1: raises or yeah, and they're trying to avoid going bankrupt,
Speaker 1: and this week have this This was a dark time
Speaker 1: for people who worked at Delta. It's very tough and
Speaker 1: very demoralizing. If you're an employee, a rank and file employee,
Speaker 1: and you hear about an executive who comes in. Maybe
Speaker 1: this executive spends six months at Delta, maybe this executive
Speaker 1: makes some terrible decisions. But because part of that executives
Speaker 1: agreement to come work for Delta was a golden parachute
Speaker 1: guarantee that even if that person were to leave the
Speaker 1: job or be fired or whatever that they would have
Speaker 1: a certain amount of money or stock or whatever. Uh.
Speaker 1: That was like, you know, you had regular employee saying, well,
Speaker 1: this is totally unfair. If I come in to work
Speaker 1: and I do a terrible job for six months, you
Speaker 1: don't reward me. Yeah, yeah, it was. It was unfair,
Speaker 1: and hence the retirement quote unquote Yes. Now this caused
Speaker 1: Delta by the fourth quarter of two thousand four to
Speaker 1: have lost two point two billion dollars, their single largest
Speaker 1: loss in a quarter. And so then, uh, they the
Speaker 1: new CEO of Delta tries to take some measures to
Speaker 1: turn things around. Yeah, he negotiated a gift back by
Speaker 1: the pilots of one third of their pay and benefits,
Speaker 1: which I guess if you really like working for Delta,
Speaker 1: you're gonna give up some of that pay for some
Speaker 1: a little bit more job security. Um. They're also trying
Speaker 1: to make flights more efficient at that time, having a
Speaker 1: shorter turnaround time and conserving fuel and lowering fares. They
Speaker 1: saved about a billion dollars doing all this. Yeah, they
Speaker 1: also sold some of their fleet and they also cut
Speaker 1: about five thousand jobs. But they were still hit with
Speaker 1: more misfortune because Hurricane Katrina hit in August of two
Speaker 1: thousand five, and it pushed oil prices way way up
Speaker 1: to sixty or seven dollars a barrel. Yeah, and that
Speaker 1: was the last straw for Delta. Delta had been eating
Speaker 1: off having to file for bankruptcy protection, but at this
Speaker 1: point it was too much, and on September two thousand five,
Speaker 1: Delta would declare Chapter eleven bankruptcy protection. And here's an
Speaker 1: interesting thing. They were not the only airline to do
Speaker 1: it that day. Nope, Northwest Airlines filed less than a
Speaker 1: half hour later. Yeah, according to reports, but over this
Speaker 1: five year period of turmoil, Delta lost about ten billion dollars.
Speaker 1: That's crazy, an So this seems like Delta is really
Speaker 1: in dire straits. I mean, the airline industry was in
Speaker 1: dire straits. Almost half of the indigeny's capacity was operating
Speaker 1: under bankruptcy oversight. So how could Delta pull out of
Speaker 1: this nose dive? We'll explain in just a moment, but
Speaker 1: first let's take a quick break to thank our sponsor,
Speaker 1: Okay Ariel. How did Delta pull out of this? Well,
Speaker 1: first they cut additional costs and then they sold Atlantic
Speaker 1: Southeast airlines, and then they cut their flight capacity out
Speaker 1: of the Cincinnati hub, which explains why it's so hard
Speaker 1: for me to get back home now, it's true. And
Speaker 1: then they did like an internal company reboot that costs
Speaker 1: them three billion dollars. This is actually a very bold move,
Speaker 1: right that that they see the need to redefine themselves,
Speaker 1: to reposition themselves, to restructure all of these rewords, and
Speaker 1: it would mean having to spend three billion dollars while
Speaker 1: you're in chapter Yeah, it's it's it's a whole lot
Speaker 1: of investment for very little guarantee and it took nineteen
Speaker 1: months to do. Yeah, so is a long term invest
Speaker 1: But these are things that I think a lot of
Speaker 1: businesses struggle with, this idea of you're taking a big
Speaker 1: risk and you know it's going to take a long
Speaker 1: time for that risk to pay off because there's so
Speaker 1: much emphasis on short term gains and short term turnaround.
Speaker 1: But for Delta, it worked. Yeah, And I guess you
Speaker 1: could figure they're thinking they're in chapter eleven already, so
Speaker 1: compared to the ten billion dollars they lost, it's only
Speaker 1: a third of that. It's only a third of that.
Speaker 1: Um they're already failing this is the hail Mary for them. Well,
Speaker 1: one of the things they decided to do is put
Speaker 1: a new focus on the customer experience. This was a
Speaker 1: major part of the rebranding for Delta, to say we
Speaker 1: are looking at this from your point of view. Yeah,
Speaker 1: they wanted to keep the immediate impact of this bankruptcy
Speaker 1: minimal for their customers. Yeah, they did have to increase
Speaker 1: fair prices in a few routes and I did also
Speaker 1: cut back on some of those routes and uh flight capacity,
Speaker 1: which again can make it pretty challenging to get to
Speaker 1: where you're going sometimes. They also introduced new logo and
Speaker 1: and some branding which doesn't seem like a big thing
Speaker 1: and doesn't really seem like it would benefit the customer
Speaker 1: beyond trying to be more eye catching, but it actually
Speaker 1: uh took the amount of colors they needed in their
Speaker 1: logo and cut it and it made it a lot
Speaker 1: less expensive, two logo everything. Of course, they had to
Speaker 1: put their new logo on everything first, right, but the
Speaker 1: new logo was was more efficient. Yes. They also began
Speaker 1: to include new amenities both if you were in flight
Speaker 1: or waiting at the gate, So that would include things
Speaker 1: like in flight WiFi. Uh. They had various in flight
Speaker 1: entertainment systems that were installed in a lot of their
Speaker 1: aircraft more and more. In fact, it's pretty rare now
Speaker 1: when I get on a Delta flight that does not
Speaker 1: have and in flight entertainment display on the back of
Speaker 1: the seat in front of me. Yes, both of my
Speaker 1: flights tuned from my vacation this past weekend did not,
Speaker 1: so sometimes it does happen. They did, They did have
Speaker 1: other amenities. It was still a lovely flight. Uh. They
Speaker 1: also streamlined their check in for their business class customers,
Speaker 1: so the people who wanted to pay a little bit
Speaker 1: more got a better experience. Yeah, and they tried to
Speaker 1: train their employees to to kind of have a more
Speaker 1: empathetic outlook on those who are traveling. I can say
Speaker 1: anyone who's traveled a lot can say this. There are
Speaker 1: certain people who experience a heightened sense of anxiety when
Speaker 1: they are traveling and when they are no longer the
Speaker 1: person who is in control of their traveling, and as
Speaker 1: a result, sometimes their interactions can become a little testy.
Speaker 1: And I am always impressed by air employees who are
Speaker 1: managing to keep their cool after what I can only imagine,
Speaker 1: is the seventy person two directly hold them responsible for
Speaker 1: whatever ills they proceed against them. Yes, they train their
Speaker 1: employees using what they called the quote unquote rules of
Speaker 1: the road, oddly enough since they fly. Yeah, and you
Speaker 1: know it focused on empathy. They used sayings from ce Woolman,
Speaker 1: who was the former owner. The former owner, things like,
Speaker 1: let's put ourselves on the other side of the counter.
Speaker 1: And the only monotonous thing about the aviation industry is
Speaker 1: the constant change. The only thing constant is change. Uh.
Speaker 1: And they looked on creating a better employee morale as well. Gosh,
Speaker 1: they had to after cutting and cutting and cutting. So
Speaker 1: they said, we'll tell you what what we're gonna do
Speaker 1: is create a profit sharing program so when Delta makes money,
Speaker 1: you make more money. They also added sixty international routes
Speaker 1: to take up the slat caused by US competitions. So
Speaker 1: they kind of looked at what their problem was and
Speaker 1: then directly fixed that problem. When again, because there was
Speaker 1: no longer this regulation, they didn't have to sit there
Speaker 1: and clear everything. You know, obviously you have other issues.
Speaker 1: You have to negotiate. You have to negotiate with airports
Speaker 1: to make sure that you have the gate capacity and everything.
Speaker 1: But they were able to make these plans and and
Speaker 1: end up building out their international flights to create more
Speaker 1: revenue from that travel and less dependence on or you know,
Speaker 1: not so much a soul dependence on domestic travel. Yeah,
Speaker 1: Delta now serves fifty nine countries out of the Atlanta
Speaker 1: Airport Hub. Now, they were able to avoid a hostile
Speaker 1: takeover attempt from US Airways in early two thousand seven.
Speaker 1: In fact, they were able to do this through multiple means,
Speaker 1: including a a sort of a PR campaign. Hostile takeovers
Speaker 1: tend to be where a company goes to shareholders and
Speaker 1: tells the shareholders of that company your better or off
Speaker 1: if you go with us. So if you vote, if
Speaker 1: you vote so that we get places on the board
Speaker 1: of directors, we can take over the company. So what
Speaker 1: Delta does is they create a PR campaign called keep Delta,
Speaker 1: My Delta, and through this they're able to argue that
Speaker 1: it would be better for Delta to stand on its
Speaker 1: own rather than become acquired by another company. Yeah. They
Speaker 1: played on the affection of their employees and customers, relating
Speaker 1: them to stakeholders in the company, which some of them were. Yeah,
Speaker 1: and saying, you guys are valuable and we want our
Speaker 1: company to remain our company. And they were able to
Speaker 1: do that, and in April two thousand seven, two years
Speaker 1: after entering bankruptcy, they emerged. So the company was able
Speaker 1: to actually turn things around and come out of bankruptcy
Speaker 1: and came out better than they went in, which is
Speaker 1: what you want to do. Yeah. Yeah, So when they
Speaker 1: went into bankruptcy, they had a revenue per available mile
Speaker 1: seat that was about eighty six percent of the industry average,
Speaker 1: and when they came out it was a So they
Speaker 1: continue to grow and expand today. I mean there's a
Speaker 1: point now where domestic travel, which used to be eight
Speaker 1: percent of their revenue, is now down to six So
Speaker 1: they have diversified in that sense. They acquired or merged
Speaker 1: essentially with Northwest. That is an interesting story from the
Speaker 1: employee perspective, I can tell you. But it also means
Speaker 1: that my wife has traveled a lot more to Minnesota
Speaker 1: and occasionally talks in a very funny way when she
Speaker 1: comes home asking for tacos. Yeah, she's Minnesota. Was it
Speaker 1: was really good? Yeah? And uh so they've done quite
Speaker 1: well since then. They were ranked as one of the
Speaker 1: world's five most profitable airlines. Uh, every year since two
Speaker 1: thousand twelve. Yes, and in two thousand sixteen they paid
Speaker 1: out one point one billion dollars in the company profit
Speaker 1: sharing plan. So clearly companies making money, employees are starting
Speaker 1: to get those bonuses. Yeah, they give a whole bunch
Speaker 1: of other employee bonuses as well. Yeah, it probably helped
Speaker 1: take away some of that sting for the employees who
Speaker 1: have been around long enough to have seen those bayroll cutbacks.
Speaker 1: And I mean here's the other thing. Delta employees tend
Speaker 1: to be like lifers, y'all. Yeah, I mean they stay,
Speaker 1: they stay with that company for decades. Well, because Delta
Speaker 1: really is working to make the work experience better. Since
Speaker 1: two thousand ten, they've increased employee conversation and they are
Speaker 1: ranked as one of Fortune's one best companies to work for.
Speaker 1: And uh yeah, so this is one of those things
Speaker 1: we keep on seeing here. They're also the biggest employer
Speaker 1: in our city. Uh you know, it's it's not Coca Cola,
Speaker 1: it's Delta. Uh. And uh yeah, there's there's been some
Speaker 1: other stuff happening recently that that slowed things down. The
Speaker 1: winter of was pretty rough, but they still were able
Speaker 1: to have growth and revenue year. Yeah, and there's some
Speaker 1: oil refinery and fuel price hedging happening that's getting a
Speaker 1: little bit of mixed reviews with Yeah, But overall, I
Speaker 1: would say they've done a pretty good job. It was
Speaker 1: an amazing job to pull out bankruptcy like that and
Speaker 1: to win back the loyalty of employees who probably were
Speaker 1: feeling kind of abandoned for a few years there. Yes,
Speaker 1: and right before we recorded this episode, I actually read
Speaker 1: an article that while other airlines are pulling in seat
Speaker 1: entertainment consoles out of their planes to reduce weight and
Speaker 1: save costs, Delta's like, nope, we're keeping that in for
Speaker 1: our customers. So as long as we don't see more
Speaker 1: squishing seats closer together so that you have even less legs.
Speaker 1: I'll have to like lay on my side if they
Speaker 1: do that. Yeah, they might will just fold me up
Speaker 1: and put me in the overhead compartment. I mean, obviously
Speaker 1: I'll have to get on the plane first because those
Speaker 1: things fill up so fast. But yeah, that that's that's
Speaker 1: Delta's return from the brink. Delta, which it's such a
Speaker 1: big company here in Atlanta. It's it can be hard
Speaker 1: to imagine such a such a it's like almost like
Speaker 1: a too big to fail kind of thing. It's hard
Speaker 1: to imagine a company that that size struggling. But it
Speaker 1: was not a guarantee that it was going to pull
Speaker 1: through that bankruptcy. But they really doubled down on some
Speaker 1: core values that I think in the long term paid
Speaker 1: off and hopefully we'll see that continue because you know,
Speaker 1: I love the way they fly and it shows do
Speaker 1: do do well. That wraps up this episode of The Brink.
Speaker 1: We can't wait to talk to you about our next company.
Speaker 1: I mean, we we just spent time in the Delta
Speaker 1: what if? What If? Next we go and explore the
Speaker 1: Amazon Well. Until then, I am Jonathan Strickland and I'm
Speaker 1: Aerial Casting and we'll see you next time. If you
Speaker 1: would like to learn more about what we've talked about,
Speaker 1: as well as keep track of all of our episodes,
Speaker 1: make sure you visit our website at the Brink Podcast
Speaker 1: dot show, or you can email us at Feedback at
Speaker 1: the Brink Podcast dot show.