Flying Highest

Delta is ready...

Corporate headquarters is a complex of drab brick buildings near an Atlanta airport taxiway. Some of the executive offices have linoleum tile, not a Bigelow, on the floor. The company even boasts of "zero paper-clip attrition" because it strips the clips from incoming mail rather than buying new ones.

Such a no-frills operation is unusual in the airline industry, which normally decorates its offices with the glamour it sells with its nights. But that has helped make Delta the highest-flying airline in the sky. Last year total passenger traffic in the U.S. dropped by more than 5%, the biggest decline since the beginning of successful air service in the 1920s, and the airlines as a whole lost about $300 million. Yet Delta recorded a 1980 profit of $130.5 million. In fact, the company now has a record of 33 consecutive years of operating at a profit. Says Vice President Richard Kimball of Wall Street's Kidder, Peabody & Co.: "There's no question Delta is the strongest trunk carrier today. Before the end of the decade, it will be the largest in revenues also."

Delta's plain pipe-rack operation on the ground is not visible in the air, where it has won faithful business travelers for its efficient, on-time service. Its advertising ("Delta is ready, when you are") is equally straightforward. "We don't go in for this Wings of Man stuff," says a spokesman.

While many other airlines have been engaging in cutthroat fare warfare for popular routes between New York and the West Coast, Delta has continued concentrating on its profitable "hub and spoke" system. The airline's planes collect passengers in outlying Southern cities, such as Macon, Ga., and Knoxville, Tenn., feed them into the "hub" airport at Atlanta, then send them out on longer-haul "spoke" flights to New York or Denver. Says Delta President David C. Garrett Jr.: "We are cautious, and our system is well balanced. During the winter, we make money on our North-South routes; during the summer, the East-West routes."

The airline industry is infamous for frequent firings and executive parachutists. But not Delta. Garrett, who joined the company about 35 years ago as a reservations clerk, is a prime example of Delta's forward-looking personnel policy, which is now paying big dividends. Company morale is high and turnover low because layoffs are nonexistent and promotions are almost always made from within.

Even strict worker-conduct rules win wide support. For example, alcohol is banned at company lunches, and male employees are forbidden to wear long sideburns or beards. When a stewardess was fired for posing out of uniform in a Playboy picture layout last year, one offended colleague observed: ''The company was justified." Despite such rigorous standards, Delta has a stunning 250,000 job applications on file.

Flush with cash and carrying less debt than any other major airline, Delta is now moving aggressively to expand its operations. It rocked the industry last year by placing a record $3 billion order for 60 new Boeing 757-232 short-to medium-range jets. The new fuel-efficient planes will be based in Dallas/Fort Worth, which is becoming Delta's second hub city. The airline began service on the lucrative Dallas-New York run last month. The company also has a contract on 51 plane-parking positions at Atlanta's new Hartsfield International Airport that will permit it to extend its southeastern routes further.

The year 1981 is likely to see the biggest shake-out in the airline industry's history. As fuel costs continue to climb at the same time that passenger traffic levels off, scrappy, small airlines, such as New York Air and Chicago's Midway, are continuing to siphon business away from their largest competitors. But no-frills Delta is well placed for the turbulent times ahead. Its "hub and spokes" has become a wheel of fortune.

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