We are in the era wherein the demand of doing business is on its peak. Continuous development and in the field of business apprises us that we are in the era of globalization wherein the effect on any thing has an ultimate effect over the other thing as well. Business is not a piece of cake. Organizations have to make effective strategies to control the operations of their business. A business model is the thing which on which the organizations merely accentuate to increase the operational effectiveness of the company. A business model describes the rationale of how an organization creates, delivers, and captures value economic, social, or other forms of value. The process of business model design is part of business strategy.
In this assignment, we have to make and compare the business model of two airline companies. The organizations on which this entire report will be based on are United Airline and Delta Airline. Uniting Airlines is a main airline based in the United States and one of the world's biggest airlines with 48,000 employees and 360 aircraft. It is a subsidiary of United Continental Holdings, Inc. formerly, UAL Corporation, with corporate offices in Chicago. United's chief hub is Chicago's O'Hare International Airport. On the other hand, Delta Aired Lines, Inc. is a foremost airline based in the United States headquartered in Atlanta.
Delta is the world's chief airline working under a sole certificate. Delta operates a massive domestic and international complex, across North America, South America, Europe, Asia, Africa, the Middle East, the Caribbean and Australia. Delta and the Delta Connection carriers fly to 348 destinations in 64 countries. Both the companies have earned millions of dollars since their operations. Both the companies are engaged in the airline industry so it is obvious that both the companies used the same business model for their operations. According to our estimation the companies have to use the Hub and Spoke Model.
This model is used by most of the major airlines including American, United, US Airways, Delta, Continental, and Northwest (Parsanna, C 2008). The Hub and Spoke organism allow the airlines to maximize passenger enplanements on each journey by gift connections to both domestic and international destinations (Khan & Jain 2007). This more complicated course method provides customers with a, much superior number of means decisions, which in rotation maximizes revenue opportunities.
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The companies have adopted the same business model to run their organizations. Both these airline companies facilitate their customers with online platform and online service like ticket confirmation and online ticket booking. According to this model emails and short messaging service (SMS) are the best mediums to entertain the passengers. Both these airline companies have timely send confirmations and new promotions to their prospective customers through email and direct home delivery. We have also compare the financial competitiveness of both these companies which has been mentioned under the table mentioned below,
16.3 billion $
1.23 billion $
43.5 billion $
18.6 billion $
2.46 billion $
From the table, it can be easily gauge that Delta Airline is far more superior to United Airlines in almost all aspects. Delta Airline has almost US$ 12 billion of extra revenue as compared to United Airlines. Net income of Delta Airline is also quite high like the total assets and total equity than United Airline which is a clear indication of its superior financial health.
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