Delta Air Lines, Inc. (DAL), US Airways Group Inc (LCC): An Easy Way to Invest in the Airline Industry

Page 1 of 2

The airline industry has rebounded from lows observed in 2007 and 2008. Due to improving economic conditions across the map, customers are more prompt to travel nowadays. The consumer sentiment index is at multi-year levels. Therefore, investors should expose their portfolios to the airline industry to profit from this recovery.

Delta Air Lines, Inc. (NYSE:DAL)

Invest in the airline industry!

I have observed a general trend from airlines to expand into emerging markets, mainly Latin America. Delta Air Lines, Inc. (NYSE:DAL) entered a code-share agreement with Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), giving the Atlanta-based airline exposure to the Brazilian market.

The company’s expansion strategy is appealing for investors. Not only has Delta Air Lines, Inc. (NYSE:DAL) announced the code-share expansion, but it also opened the first Latin American technical operations line maintenance in Sao Paulo.

Further, Delta Air Lines, Inc. (NYSE:DAL) has been granted temporary permission by the U.S. Department of Transportation to operate the route Atlanta – Sao Paulo. The Brazilian city is the most important economic center in South America.

These are strong reasons for investors to consider investing in Delta Air Lines, Inc. (NYSE:DAL) to gain exposure to the industry.

On top of that, investors should see capital growth because the carrier declared a quarterly $0.06 per share dividend back in May. Further, the board authorized a $500 million share-repurchase program to be completed no later than June 30, 2016. The airline is in the best position to start these programs because it reported $357 in free cash flow in its most recent earnings report.

The stock trades with a price-to-earnings ratio of 19.4, compared to the industry’s average of 33.6

Another airline worth considering

US Airways Group Inc (NYSE:LCC) is also expanding into Latin America. The new route between Charlotte, N.C., the carrier’s largest hub, and Sao Paulo started on June 8. Customers from 85 cities in the United States will have a convenient one-stop access to Sao Paulo. Investors should delve into the carrier’s third-quarter 2013 earnings report to determine if the load factors for this route are high in comparison with the overall load factor. Although the date for the third-quarter 2013 earnings report is not set, investors may expect it to be around the fourth week of October.

Also, the merger with American Airlines has been approved by shareholders, and the board of directors for the new American Airlines has been elected. The merger positions US Airways Group Inc (NYSE:LCC) as the carrier with the largest international exposure in the world. Nothing to sneeze at.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!