Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Delta Air Lines, Inc. (DAL): Book a Ticket on This Growing Airline

Page 1 of 2

Delta Air Lines, Inc. (NYSE:DAL) , founded in 1924, provides air transportation for passengers and cargo in the United States and internationally. As of April, the company headquartered in Atlanta had a fleet of approximately 700 aircraft.

The airlines have witnessed very rough times in the last decade or so. Since 2003, Delta posted six annual losses, went through bankruptcy, and then acquired Northwest Airlines and reduced its debt by almost half.

Delta Air Lines, Inc. (NYSE:DAL)

For Delta, shares are up 57% year-to-date (as of June 27) outperforming rivals like United Continental Holdings Inc (NYSE:UAL) (34%) and U.S. Airways (21%). Shares are also well ahead of Dow Jones Industrial Average (INDEXDJX:.DJI).

Strong earnings

Delta’s first-quarter results were good, with the company’s chief executive officer Richard Anderson describing the “strongest March quarter financial and operational performance in over a decade.”

At a time when Delta reported its strongest March quarter results, rival United Continental Holdings Inc (NYSE:UAL) did not post a profit, though it did manage to narrow its loss. The airline has been working hard to win back the customers who turned to rivals after technology glitches while the airline was handling problems like the grounding of The Boeing Company (NYSE:BA)‘s 787 Dreamliner.

However, United Continental Holdings Inc (NYSE:UAL) is expected to post notable improvements in the operating results. In the first quarter, the company reported an on-time percentage of 81%, which is very impressive considering mid-60% range experienced in 2012. The company also showed improvements in customer satisfaction scores. Massive capacity cuts help the airline to improve the passenger revenue per available seat mile by 5.9%.

U.S. Airways earned $44 million, or $0.26 cents per share, for the first quarter. As per the CEO, Doug Parker, the numbers looked promising as the airline plans to merge with American Airlines, resulting in the biggest airline in the world. In terms of market share, American holds a fifth spot on the East Coast and fourth in the Midwest and the West Coast. US Airways Group, Inc. (NYSE:LCC) holds third position in the East Coast and fifth and sixth spot in the Midwest and the West Coast markets, respectively.

After the merger, the new entity will have the biggest market share on the East Coast and in the Midwest and the third spot in the West Coast markets.

Growth Drivers

Delta Airlines is close to acquiring a minority stake in Virgin Atlantic and launch an extensive trans-Atlantic joint venture with the U.K.-based carrier. The move will help the company to cement its place as the biggest airline on trans-Atlantic routes.

The Department of Transportation is planning to open or extend airline routes to Brazil from Los Angeles, Atlanta, Detroit and Charlotte, N.C.. The proposed routes will go to American Airlines, Delta Air Lines, Inc. (NYSE:DAL) and US Airways Group, Inc. (NYSE:LCC), opening further opportunities

Delta Air Lines, Inc. (NYSE:DAL) recently unveiled a new $1.4 billion terminal at New York’s JFK International Airport. With the new state of the art terminal, Delta plans to win more premium clients especially those who need last minute bookings.

Delta plans to reduce the adjusted debt to $7 billion from $10 billion previously and $17 billion about four years ago. The cut in debt will reduce the interest expense by almost half, to around $500 million annually. Also, the company plans to reinvest more than $2 billion annually to improve the company’s fleet, facilities, and technology.

Analyst ‘bullish’

In a note issued on June 7, Zacks reiterated its “neutral” rating on Delta, with a price target of $18. Analysts at Standpoint Research downgraded Delta’s shares from a “buy” rating to a “hold” rating, in a note issued on May 23. Also, analysts at Deutsche Bank reiterated a “buy” rating with a price target of $20.00, in a report issued on May 9. Analysts at Cowen Securities, in a report issued on May 9, have an “outperform” rating with a price target of $23.00.

Overall, Delta Air Lines, Inc. (NYSE:DAL) has a consensus rating of “Buy” with an average price target of $20.85.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!