John Louise P.

Ligutom BSBAFM / MWF (8:00-9:00)

1. Richard Anderson: Delta Airlines

- Richard H. Anderson is a retired American lawyer and business executive. In his early career, he served
as a prosecutor and corporate attorney, before moving into executive positions.

2. Study the biography of Richard Anderson, CEO of Delta Airlines. Include his childhood , of there is
something significant, his interest, his educational attainment, professional and career orientation, and
other facts that might have contributed to the success he is enjoying now.

- Anderson was born in Galveston, Texas, to Hale Anderson, an office worker for the Atchison, Topeka
and Santa Fe Railway, and Frances Anderson, a medical receptionist. His family, which also included five
sisters, moved to Dallas and later Amarillo, Texas. His parents died of cancer when Richard was 20 years
old. Anderson attended Texas Tech University and the University of Houston, graduating from the latter
in 1977 with a degree in political science. He earned a J.D. degree in 1982 from the South Texas College
of Law before working as a prosecutor for the district attorney office of Harris County, Texas.

-Anderson entered the aviation industry after accepting a legal position at Continental Airlines and
served as the airline's representative during the investigation of Continental Airlines Flight 1713 in 1987.
[1] Anderson, who had never considered a career in the aviation industry, accepted the position at the
urging of Ben Hirst, a neighbor who worked at Continental as a legal counsel.

- Hirst and Anderson left Continental for Northwest Airlines in 1990, with the latter serving as a deputy
general counsel for the airline.[1] At Northwest, Anderson was initially charged with labor relations and
government affairs. Despite having no experience in airline operations, he was named senior vice
president of technical operations and airport affairs.[3][4] Anderson was promoted to CEO of Northwest
Airlines in June 2001 after the departure of John Dasburg.

- Anderson was named Aviation Week's Person of the Year for 2015.[12] In 2013, he was the recipient of
the Tony Jannus Award for distinguished achievement in commercial air transportation.

3. Strategies Implemented

- Anderson's business model focuses on attracting corporate travelers, a segment characterized by high
margins and low price sensitivity. Delta also strives for a flexible business model that focuses on shifting
their cost structure from fixed to variable costs as much as possible.

4. Study the beginning of Delta Airlines the challenges it's encountered through the years and it's
journey toward success.

- The most important thing to know about Delta’s transition over the past decade is this: today, Delta
gets a revenue premium of 107%. That is to say, in the first quarter, Delta’s revenue per available seat
mile was seven points higher than the airline average because people choose to fly on Delta.
- Before it sought bankruptcy protection in 2005, Delta had revenue per available seat mile that was 86%
of the industry average. By the first quarter of 2007, Delta executives were pleased to proclaim that
RASM was 96% of the industry average. The carrier emerged from bankruptcy protection on April 30,
2007.

- While all of the major airline bankruptcies in the first decade and a half of the 21st century have been
successful, enabling the carriers to profitably restructure, Delta’s was probably the most uniquely
successful.

- The bankruptcies all led to cost-cutting, primarily labor cost cutting, and enabled the final stages of
post-deregulation consolidation to play out. Meanwhile, soaring oil prices led the industry to reduce
capacity. And the idea of ancillary revenues caught on rapidly after United began to charge $25 for a
second checked bag in 2008.

- Before the bankruptcy, Atlanta was squandered, used largely to connect passengers between the
Northeast and Florida – a leisure market with little potential to provide revenue premiums. Now Atlanta
has 970 daily departures to 210 destinations including 62 international destinations. Overall, Delta
serves 59 countries.

- On May 7, Bastian declared at an investor conference that Delta’s goal in 2014 “is to be profitable, for
the first time in Delta history, in New York.” This week, Delta announced it will boost its dividend 50%
and buy back $2 billion worth of its shares. At the investor conference, Bastian said Delta is not stopping
here. He said the carrier “should be able to continue to improve” on its 107% revenue premium. The
three global U.S. carriers “have very similar structures and networks,” Bastian said. “It’s really the
quality of the service that matters (because) customers choose which airline they’re going to fly."

5. From the management result driven, practical & inspiration strategies implemented by Richard
Anderson, CEO of Delta Airlines which attracts you as something worth emitating? Explain.

- The thing Richard Anderson did that is most admirable is that he persisted in the face of adversity
when his company was on the verge of failure. Instead of giving up, he did everything in his power to
turn things around and propel his company to the top of the airline industry in terms of revenue. His
company has failed, yet despite that, he is now among the world's richest individuals, which is an
astonishing feat. The best way to emulate what he achieved is to persevere through hardships because,
with persistence, confidence in our fellow employees, and, most importantly, in ourselves, we can also
overcome them.