Delta cancels East Coast Shuttle Sunday

Delta Airlines has canceled flights to the eastern seaboard because of snow. It has not been a bad winter as far as it goes for this year (meaning a steady turn of flights). The airline is allowing its customers that have been delayed to schedule flights that will not have any incurring costs. This is a sunk cost to the passangers of Delta Airlines. The passangers have already invested time and money for the trip previous to this event. By gaining the ability to get to their destination in an aternate way, the lost time is a sunk cost. Delta hopes to capture some loyality with those delayed because they are able to satisfy their customers with not charging they to go an alternate route. They feel they can do this because of their ability to accomeadate the customer. Also they feel that they can capture some main frame clients through the big city locations. If you are able to serve a client then you have served your target market successfully. Taking on some additional costs to effectively serve is a must in order to stay strong in the Airline industry today.

What do you think this will do to Delta Airlines? Are the costs, taken on due to the delays, sunk costs for passangers, why or why not? What effect might this have on Delta Airline's PPF? If you were to make a decision for Delta on how to fix this situation, what areas might you be able to effectively use your resources?