Delta Airlines Bankruptcy Case Study

822 Words4 Pages
Delta Air Lines Inc., the nation's third-largest airline, filed for bankruptcy protection after racking up more than $10 billion in losses since 2001 and depleting its cash reserves to anemic levels. Bankruptcy is a tuff decision but at some point a decision that must be made. This is what Delta CEO Gerald Grinstein said about it (Ramos, 2005). The action we have taken is a necessary and responsible step to preserve Delta's value for our creditors, customers, employees, business partners and other stakeholders as we address our financial challenges and work to secure our future. Delta is open for business as usual and will continue normal operations throughout the reorganization process. Our customers can be confident that they remain our number…show more content…
Delta management has now placed much of our future in the hands of the bankruptcy court. We will use all legal means to protect our contract. "But with Senate confirmation hearings on a proposed U.S. Supreme Court justice and the aftermath of Hurricane Katrina, the bill couldn't be passed in time to kept Delta out of bankruptcy court. Grinstein has said that he doesn't want to do that to Delta's employees, who number more than 20,000 in metro Atlanta alone. He has said that Delta wants to pay its obligations, it just needs more time to do it (Ramos,…show more content…
Under CEO Gerald Grinstein’s direction Delta went through major company restructuring by implementing Total Quality Management (TQM). Grinstein employed a strategic leadership management style to turn Delta around while ensuring that change communication was disperse across all channels of the company. CEO Grinstein traveled the country, speaking to employees, expressing the changes the company was going to implement. He realized that the employees were the most important asset of the company and should be treated as such. Per Max Weber’s leadership theory, Grinstein would be classified as a charismatic leader or in a more contemporary view, Grinstein’s charisma would translate into transformational leadership. He implemented transformational leadership through the use of interpersonal skills to motivate employees and remain transparent throughout the restructuring process. Delta insured that all employees were aware of the new corporate mission and rules by dispersing copies of “Rules of the Road”, a document that outlined the new guiding principles necessary for Delta’s success (Anderson, 2015). Transactional skills were also implemented by focusing on cutting costs and repaying lenders. The mix of transformational and transactional leadership played a key role in Delta Air Lines implementation of total quality

    More about Delta Airlines Bankruptcy Case Study

      Open Document