Delta August Traffic Rises - Analyst Blog

By Zacks Equity Research,

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Leading passenger and cargo carrier Delta Air Lines ( DAL ) reported growth in traffic for Aug 2013 on strong contributions from domestic, Latin America and Atlantic regions.

The company's airline traffic - measured in revenue passenger miles or RPMs, which imply revenue generated per mile per passenger - moved up 2.7% year over year to 19.4 billion. Consolidated capacity (or available seat miles/ASMs) for the month, increased 3.3% from Aug 2012 to 22.3 billion.

The load factor or percentage of seats filled by passengers, however, declined 50 basis points from the eighth month of 2012 to 87.3%. Passenger revenue per available seat mile (PRASM) improved 4.0% year over year, aided by solid performance in domestic, trans-Atlantic and Latin American markets. The company registered a completion factor of 99.9%, with nearly 85.0% of its flights on schedule.

For the first eight months of 2013, Delta generated RPMs of 132.7 billion (up 0.6% from the corresponding month last year) and ASMs of 157.5 billion (up 0.3% year over year), while load factor was 84.3%, up 30 basis points.

Recently, Delta announced its plan to purchase 40 new jets from Airbus in a deal worth $5.6 billion to upgrade its fleet. Delta has ordered 10 A330-300 wide body jets and 30 narrow body A321 aircraft to be delivered between 2015 and 2017.

Delta also revealed plans to expand its services in South East Asia by launching nonstop flights from Seattle to Seoul and Hong Kong. Apart from new route launches, Delta and leading Latin American airline, GOL Linhas Aereas Inteligentes S.A. ( GOL ) have attained their immediate goal of expanded the code sharing thus providing increased benefits to their loyal customer base.

We expect the company to be well positioned over the coming months owing to various strategic initiatives such as route launches, renovation of airport terminals and upgrading of fleet structure.

Delta, reported mixed financial results for second-quarter 2013. Adjusted earnings of 98 cents surpassed the Zacks Consensus Estimate of 95 cents while revenues of $9.70 billion fell short of the Zacks Consensus Estimate of $9.83 billion.

Delta operates with the likes of United Continental Holdings Inc. ( UAL ) and JetBlue Airways Corp. ( JBLU ), and carries a Zacks Rank #3 (Hold).

DELTA AIR LINES (DAL): Free Stock Analysis Report

GOL LINHAS-ADR (GOL): Free Stock Analysis Report

JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report

UNITED CONT HLD (UAL): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: DAL , GOL , JBLU , UAL

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