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Delta (DAL) to Boost Network by Adding New Destinations

Delta Air Lines’ DAL management has decided to add new destinations to its network to take advantage of the upbeat air-travel-demand scenario. The move to add tourist-friendly destinations is expected to boost the airline company’s traffic.

With an eye on the upcoming holiday season, Delta has decided to add seasonal routes from its hubs at Atlanta, New York-JFK, Detroit and Minneapolis to multiple tropical destinations. All flights will operate seasonally from Dec 16 through Jan 7, 2024.

Delta will add 20% more seats to its Lain America network in 2023 than the previous year. The massive expansion is aimed at making DAL’s Latin America schedule for 2023 holidays the largest in its history.

Under the expansion move, DAL intends to widen the scope of its service to Mexico, Central America and the Caribbean. The company aims to cement its position as the leading carrier to Latin America from Atlanta and Detroit through its move to increase the frequency of its flights to popular destinations like Aruba and Cancun, Mexico.

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While flights to Aruba from Atlanta will increase to twice a day from a single one, seven flights will fly to Cancun daily from Atlanta as opposed to six previously. All flights will be equipped with modern facilities like free and fast Wi-Fi.

Riding on the upbeat traffic scenario, DAL shares have outperformed its industry over the past six months. Over the past six months, shares of Delta have gained 5.8% compared with its industry’s 2.1% appreciation.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

The expansion move is likely to boost its traffic further, in turn, resulting in more stock price appreciation.

Zacks Rank & Key Picks

Delta currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks for investors interested in the Zacks Airline industry are:

Alaska Air Group ALK, being aided by the improved air-travel-demand situation, reported better-than-expected fourth-quarter 2022 results. The company expects a 29-32% increase in the top line in first-quarter 2023.

ALK has been increasing its capacity to meet the upbeat demand. Capacity is expected to increase 11-14% in the first quarter of 2023.

The Zacks Consensus Estimate for Alaska Air's current-year earnings has been revised upward by 7.7% in the past 60 days. ALK currently has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

United Airlines UAL, currently carrying a Zacks Rank of 2, is seeing steady recovery in domestic and leisure air-travel demand. On the back of upbeat air-travel demand, the stock was profitable in fourth-quarter 2022, which was the third consecutive profitable quarter at UAL.

Driven by solid demand, management expects total revenue per available seat mile to grow 22-23% year over year for the first quarter of 2023. Total revenues are anticipated to grow almost 51% year over year.

The Zacks Consensus Estimate for current-year earnings has been revised upward by more than 18% in the past 60 days.

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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report

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Zacks Investment Research