5 Airline Stocks Billionaires Are Piling Into

3. Delta Air Lines, Inc. (NYSE:DAL)

Number of Billionaire Holders: 9

Delta Air Lines, Inc. (NYSE:DAL) is a leading global airline serving more than 200 million passengers on an annual basis across its global network of more than 280 destinations across six continents. The company employs more than 100,000 people and operates over 4,000 daily flights.

On October 12, Delta Air Lines, Inc. (NYSE:DAL) released its financial results for Q3 2023. Its revenue increased by 11% y-o-y to $15.5 billion, while net income surged by 59% y-o-y to $1.1 billion. It generated a normalized EPS of $2.03 for the quarter, which exceeded the consensus estimates by $0.08.

In its Q3 2023 investor letter, Patient Capital Management, a value investing firm, made the following comments about Delta Air Lines, Inc. (NYSE:DAL):

“Historically, airlines have passed on higher fuel prices to customers with a lag. We see Delta as a premium global consumer brand that is materially misunderstood by the market. The market still sees airlines as a cyclical, bankruptcy prone industry. An improved supply-demand picture, management discipline and a better business mix make Delta a more resilient business. Their loyalty program with American Express is a source of stable and growing revenues with $6.5B in remunerations this year with a goal of reaching $10B by the end of the contract in 2028. Premium and ancillary service revenue should generate 65-70% of the total in the next year or two. The company should continue to generate consistent midteens returns on capital. As the market begins to understand, we believe the company will continue to be rewarded. On top of this, free cash flow is expected to expand generating a cumulative ~$11B from ’23-’25, or one-half of its current market cap. As the company pays down debt while growing the dividend and eventually resuming share repurchases, we think the stock will continue to trend higher.”