Delta Air Lines Incorporation is a company based in the United States. The company operates air travel services for both passengers and cargo domestically and internationally. They operate a fleet of over 700 airplanes to over 300 destinations around the world. The company has hubs in Atlanta, Detroit, Seattle, Boston, and many others as well as a list of focus cities. The company was founded in 1924.
Why You Should?
- Delta’s stock price crashed along with the rest of the market as the impacts from the COVID-19 Pandemic set in. However, optimism of a COVID-19 vaccine and stimulus deal has caused the stock price of the company to shoot right back up. As there is more optimism about these two things, investors should expect to see Delta’s stock price to shoot up once again.
- Delta Airlines will benefit from rising passenger numbers as people travel home from the holiday. Even though the CDC does not recommend that people travel during Thanksgiving and Christmas months, people still have traveled by the millions. This will help the company go through a time where there are people who are reluctant to travel. This will also benefit the investor’s in this company.
- Delta has a fleet of over 700 airplanes and cargo capabilities to distribute COVID-19 vaccines around the world. This distribution will happen under the Delta Cargo division. This distribution will further boost the demand for the company’s cargo volumes and revenue. This will help the company recover from the COVID-19 pandemic and will also benefit the investor base of the company.
- Delta Airlines operates a great fleet of airplanes. This pandemic has increased the retirement speed of airplanes that are less fuel-efficient and are more expensive to fly. For example, the airline retired their McDonnell Douglas, 777, and other old airplanes. They have replaced the fleet with newer Airbus A220s and Airbus A350 airplanes.
- Delta Airlines will see stronger operating results under a strong global economy. The economy is starting to gain strength around the world and that means that more cargo needs to be transported and more people want to fly. This will benefit the company to recover from this pandemic and will also benefit the investor base of the company.
- Delta Airlines is open to ordering the Boeing 737 MAX to further modernize its fleet. Delta Airlines can use this airplane to replace their older Boeing 737–800/900 series aircraft. If Delta can get a great deal on these airplanes, then it will further benefit the airline's future growth.
- Delta Airlines has quickly adapted its business in order to respond to the COVID-19 pandemic. From mandating face coverings onboard its airplanes to blocking middle seats for the longest time in order to allow for social distancing onboard its airplanes, customers will fly on Delta in order to be safe and prevent getting infected with the virus. These passenger volumes will also benefit investors.
- Delta Airlines has had an extremely strong balance sheet before this pandemic happened. They were not the largest airline in the world but were the most profitable airline in the world. The airline also reports some of the most revenues in its sector. This will help the company go through tough operating times. This will also help the company’s future growth. These numbers will also benefit investors. In the financial year of 2019, the company reported revenues of around 47 billion and profits of around 4.77 billion. Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 44.44 billion and profits of around 3.94 billion. For the next couple of financial years, the company will not see this much revenue and profit due to impacts from the COVID-19 pandemic.
Why You Should Not?
- Delta Airlines has been hammered with the impacts of the COVID-19 Pandemic. Low demand due to the pandemic and higher operating costs due to the pandemic has hurt the company’s financial results. The lack of demand from business travel might hurt the company in the long-term as well. This has also hurt the investors of the company.
In my opinion, I think that Delta Airlines is a great long-term investment due to optimism of a COVID-19 vaccine, an upcoming holiday season, higher cargo volumes due to COVID-19 vaccine distribution, a good fleet of airplanes, a strong economy returning, and one of the strongest airline balance sheets. However, impacts from the COVID-19 pandemic might hurt the company for a long time.