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Leading U.S. passenger carrier Delta Air Lines (DAL - Analyst Report) displayed flat traffic growth for Jan 2013, based on higher corporate revenue, efficient operations in the Transatlantic region and better capacity optimization, partially offset by weak regional activity.

The company’s airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – remained flat year over year at 13.9 billion. Consolidated capacity (or available seat miles/ASMs) for the month dropped 2.4% from Jan 2012 to 17.5 billion.

The load factor or percentage of seats filled by passengers, however, went up 190 basis points from the first month of 2012 to 79.4%. Passenger revenue per available seat mile (PRASM) also improved 5.5% year over year. The company registered completion factor of 99.5%, with nearly 87.4% of the flights on schedule.

Delta – the second largest airline company in U.S. after United Continental Holdings Inc. (UAL - Analyst Report) – recently posted fourth-quarter 2012 adjusted earnings of 28 cents, in line with the Zacks Consensus Estimate. Revenue, however, fell marginally short of our projection.

For 2013, we expect Delta to post revenue and earnings growth aided by various strategic actions that include re-organization of fleet, introduction of attractive services, capturing of new markets and profitable takeovers.

The company is collaborating with top brands like Malin+Goetz and Tumi Holdings Inc. (TUMI - Snapshot Report) to offer travel luxuries to BusinessElite passengers. With the thought of providing a comfortable lounge experience to flyers, Delta Air Lines has joined hands with an international design group – Architectural Digest – to upgrade outdoor terraces. These first-ever open-air airport patios, called The Sky Deck, will be set up at the Atlanta and New York terminals.

We believe that these innovative and attractive initiatives along with enhanced service offerings will position the company in an advantageous position compared to other industry players such as JetBlue Airways Corp. (JBLU - Analyst Report).

Delta currently holds a Zacks Rank #3, implying a Hold rating.

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