E-Business at Delta Air Lines: Extracting Value from a Multi-Faceted Approach

Abstract

Delta Air Lines entered e-business with much aplomb when it agreed to provide Priceline.com with its excess inventory (seats on planes) in exchange for a 10% equity position. When Priceline stock soared, Delta sold part of its holding for $750 million. Delta management recognized that e-business offered many different business opportunities and has identified ways to lower costs (e.g. selling tickets on line), increase revenues (e.g. selling excess inventory through Priceline), and experiment with new business concepts (developing MYOBTravel.com for small and medium-sized businesses). This case stud y describes Delta?s e-business initiatives, noting the organizational structure used to aggressively pursue new opportunities. Of particular note is the role of the IT transformation that positioned Delta for the opportunities e-business created. Seeking to avert a Y2K crisis, Delta invested $1 billion in its IT infrastructure and developed a publish-and-subscribe environment to support a cross-functional customerorientation.