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), Southwest Airlines Co. (LUV): Fly the Friendly Skies With George Soros and David Tepper

Page 1 of 2

Airlines have historically been terrible investments. However, things are starting to look better for the airline sector. Airlines are one of the best-performing sectors on Wall Street this year. Higher fares, less competition, and full planes are putting profits back into the airlines’ pockets. This has caught the attention of notable hedge fund managers George Soros and David Tepper.

setting up a hedge fund

Hedgies’ two favorite airlines

Both Soros and Tepper own shares of Delta Air Lines, Inc. (NYSE:DAL) and US Airways Group Inc (NYSE:LCC). Both own more than 9 million shares of US Airways Group Inc (NYSE:LCC). In regards to Delta Air Lines, Inc. (NYSE:DAL), Tepper has a slightly larger stake with almost 10.7 million shares, versus Soros and his 9.8-million-share stake.

Outlook for both airlines

Delta Air Lines, Inc. (NYSE:DAL) continues to prove why it’s one of the best-run airlines in the U.S. The airline just unveiled a new state of the art $1.4 billion terminal at New York’s JFK International Airport. JFK has more international arrivals than any airport in the U.S. Last year, 13.1 million passengers arrived internationally. Of those, 2.1 million landed on Delta Air Lines, Inc. (NYSE:DAL) airplanes, the most of any airline. Delta Air Lines, Inc. (NYSE:DAL)’s goal with the new terminal is to win more business from New York’s well-heeled clientele with last-minute flights and is offering a new terminal with more non-stop flights to do so.

This $1.4 billion investment continues Delta Air Lines, Inc. (NYSE:DAL)’s efforts to increase value for shareholders. Delta just outlined its plans for the next five years. The plan includes returning $1 billion to shareholders and reinvesting more than $2 billion annually to improve the company’s fleet, facilities, and technology. The company will also use free cash flow to reduce debt and pension obligations. With these plans, it’s easy to see why both Soros and Tepper have bought into Delta.

What I like most about US Airways Group Inc (NYSE:LCC) is the upcoming merger with American Airlines, which is expected to be completed in the third quarter of this year. This merger is a great combination because many of their routes are complementary and have very little overlap. The combined airline will likely reduce costs by $150 million annually and management expects an additional $900 million in ticket sales by luring corporate travelers from the other airlines. The new airline will have more than 900 planes, 3,200 daily flights, and about 95,000 employees. According to US Airways Group Inc (NYSE:LCC) CEO Doug Parker:

The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace. Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to go.

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...

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!