Introduction
In the era of the Internet, the world has become smaller and communications have become more immediate. Companies react immediately when world events and climate changes affect their economic performance. For example, news about the hurricane Katrina heading towards the refineries in land, spiked the price of gas worldwide even before the hurricane had a chance to hit the oil refineries.
The Internet has made business transactions available to many parts of the world where markets in the past were impossible to reach from an economic point of view.
It is no longer useful to keep your business plans confined to what you know but they should also account for what you do not know and contingency plans have to be developed to counteract most unforeseen events. The airline industry is a good example of this new world economy. Weather, gas pricing, union demands, political events, terrorism, world competition, and government regulations are just a few of the many events constantly modifying the business model of the airline business and making it very volatile.
This paper attempts to frame the problems Delta Airlines is facing and presents two alternatives paths for management to consider: The use of strategic financial management measures and the possibility of a merger.
New Business Model
Companies in today's marketplace need to be able to adapt to an ever-changing business environment in order to survive. Companies can no longer afford to take the future for granted. This is especially true for the airline industry since September 11, 2001 and one thing has become evident: a company cannot afford to become complacent with its business model. Prior to September 11th, 2001 the business climate for the airline indust ...