Under new management
Last August, Richard Anderson was appointed Delta Air Lines' COO. He was later promoted to CEO within a few months. The new chief tells Aviation Business about his plans for the US carrier.
The airline industry has been through some major challenges. What are the main challenges ahead for Delta Air Lines?
Delta is uniquely positioned in the global airline industry with a robust domestic network, fast-growing international footprint, well-placed hub system, lowest cost structure among network carriers, and strong balance sheet. It has the right architecture for success at a time when passengers demand seamless travel worldwide. Delta has a superb management team, the trust and loyalty of 50,000 committed employees, and the confidence of having emerged victorious from one of the toughest tests in the airline industry. Its challenges are typical for the airline industry, beginning with the rising cost of fuel, managing passenger expectations in light of our nation's outdated air traffic control system, and constantly growing competition.
How different will Delta be under your leadership?
I'm honored to inherit the leadership of Delta at a great point in its history. I'm mindful that a lot of hard work and sacrifice has gone into turning Delta around during the past year. My goal is to take Delta to a higher level, including becoming the absolute leader in operational performance and customer service. Delta has a great heritage of service and this is a great platform to build on. You can expect an even more customer-focused Delta and a carrier that's positioned to win not only in its home base, the US, but around the world as well.
How will you deal with growing competition across your expanding global network?
The airline industry is a competitive, complex business. Delta is in a good position and uniquely placed. It has a strong network and, given Delta's hub structure, it has industry leading presence on the East Coast in Atlanta, New York-JFK and Cincinnati. On the West Coast, Delta is strengthening its presence in Salt Lake City and Los Angeles. Delta is already the number one airline in terms of destinations covered globally, serving some of the most financially attractive markets in the world. On the product side, Delta is investing aggressively in product upgrades. Recently, Delta achieved a number two ranking for the second year in the JD Power and Associates 2007 Airline Satisfaction Index Study, which is a true testament to its employees.
During the past 18 months, Delta has undertaken the largest international expansion in its history. Where does the airline plan to fly to next and when will these routes be launched?
Increasing the size and scope of our international network has been a vital part of our plan to return to profitability. We are continuing to develop our network and evaluating strategic opportunities. In the near term, we have stated our interest to operate a service to London-Heathrow and to Shanghai and Beijing in China. Delta is intent on increasing international flying, so you can expect to see new route announcements soon.
How difficult is it to find new profitable routes?
The airline industry is a competitive business. There are some extremely competitive markets but there are still opportunities for us to try and take advantage of, particularly in the international arena.
Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. The alliance members provide flights to more than 462 worldwide destinations.
With the US-EU Open Skies agreement recently coming in, how will the landscape for the transatlantic market change?
Delta is enthusiastic about the implementation of Open Skies in 2008 and we are glad that we are at last competing in a deregulated trans-Atlantic marketplace. Open Skies will benefit consumers in many ways, including allowing increased access to London's Heathrow Airport. As the largest US carrier across the Atlantic, access to Heathrow has always been a priority for Delta and we will endeavor to obtain slots to operate at Heathrow by 2008.
If Delta secures more slots, are you confident it will be able to compete in the London Heathrow market?
Heathrow is a high priority market for Delta and we are confident that we will secure slots to offer a competitive product and unrivaled onward connections through our New York and Atlanta hubs.
As a founding member of SkyTeam alliance, will the carrier coalition remain a high priority for Delta?
We are certainly proud of the alliance that Delta, Air France, Aero Mexico and Korean Air founded seven years ago, which has since grown to 10 members. Our alliance continues to form an important element of Delta's strategic offerings to customers. As such, Delta continues to work with its SkyTeam partners to build upon the existing customer service offerings within the bounds of the current antitrust immunity. We are still committed to providing our customers with the benefits resulting from antitrust immunity with our partners and we are hopeful our six-way application with the DOT will receive approval.
How do you plan to update the carrier's ageing fleet?
Delta will be looking at options to modernise our fleet over the long term, including both Boeing and Airbus aircraft. Last year, we took delivery of 13 Boeing 757s to help us meet the needs of our international expansion, and we've increased our order of 777-200LRs to eight. These will join the fleet early in 2008 and we are hopeful of deploying these to fund future growth to markets like China.
With substantial growth across your network expected, how do you plan to reduce CO2 emissions?
Probably the most important initiative undertaken so far is Delta's partnership with The Conservation Fund, America's leading environmental non-profit organisation dedicated to protecting land and water resources. This partnership has established a program that enables Delta customers to give back to the environment by buying trees to help offset carbon emissions associated with their travel. This is the first effort of its kind by a major US airline. Delta has other initiatives in place, including on-board recycling and the installation of winglets on three aircraft types (737, 757 and 767s) to reduce fuel burn. We are committed to developing these programs.
You launched a service to Dubai last year, so are there any plans to introduce more flights?
Delta is delighted that Dubai is part of its international network and it remains a strategically important market. We monitor the opportunities for growth and expansion but don't have any specific announcements to make.
Anderson has nearly 20 years aviation experience. He entered the industry in 1987 at Continental Airlines, where he served as staff vice president and deputy general counsel.
In 1990, Anderson began a 14 year career at Northwest Airlines where he served as vice president and deputy general counsel. He was also senior vice president of technical operations and airport affairs, executive vice president and chief operating officer. From 2001 to 2004, Anderson held the CEO position.
Anderson joined Delta from his position as executive vice president of UnitedHealth Group, where he has worked for the past three years, and served as president of UnitedHealth's commercial markets group. He also serves as a director of Cargill Inc and Medtronic Inc.
Anderson, who is originally from Galveston, Texas, holds a bachelor's degree from the University of Houston and a Juris Doctor degree from South Texas College of Law.