Consistent with the company’s expansion spree Delta Air Lines (DAL - Analyst Report), is contemplating the addition of new flights between the U.S. and Brazil. The company is reportedly seeking approval from the U.S. Department of Transportation for non-stop flights form New York and Atlanta to Sao Paulo.
Upon approval, the company targets to begin flights in 2013. We believe these initiatives will not only generate more revenues but also poise Delta in a competitive position within the airline circle.
For Delta, Brazil represents a significant market in Latin America as it is a popular destination for business travelers. The company already operates 35 nonstop weekly flights between Brazil and the U.S. from Atlanta, Detroit and New York to Sao Paulo, and from Atlanta to Rio de Janeiro and Brasilia.
Delta’s decision to further raise the number of flights operating between the U.S. and Brazil emphasizes the growing market demand between these routes.
Besides the company’s strong foothold in Latin America, Delta Air Lines and Alaska Airlines are increasing international services and enhancing customer satisfaction in the West Coast. This move will take the airline services closer to serving the key markets in Asia as well as benefit flyers in the Pacific Northwest circuit.
Delta also targets enhancing its services at Charles de Gaulle Airport in Paris in mid 2013 by bringing in more flights from 11 destinations in the U.S. Internationally, the expanded deals with China Eastern and China Southern are paying off. We believe that the company’s global network and its hub structure, as well as alliances with other airlines will enable it to offer customers a relatively better global reach.
Apart from expanding overseas, the company is also taking adequate measures to remain competitive in the domestic market. Last month, Delta announced plans to start 2 flights from Theodore Roosevelt Regional Airport in Dickinson, North Dakota to Minneapolis-St. Paul International Airport, every day. The service – slated to come into effect from June 10 – will be rendered by Delta Connection’s carrier SkyWest Airlines via 50-seat CRJ-200 regional jets.
We believe that the company’s expansion along with enhanced service offerings will position it advantageously compared to other players like United Continental Holdings, Inc. (UAL - Analyst Report).
Currently, Delta has a Zacks #2 Rank (Buy).
Other stocks in this sector we see as worth considering are AMR Corporation and Deutsche Lufthansa Aktiengesellschaft (DLAKY). Both carry a Zacks Rank #1 (Strong Buy).