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Delta Sees Healthy June Traffic

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Atlanta, Ga.-based Delta Air Lines (DAL - Free Report) displayed healthier traffic in Jun 2013, due to better international activities in Latin America and Atlantic.

The company’s airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – improved 0.7% year over year to 18.5 billion. Consolidated capacity (or available seat miles/ASMs) for the month moved up 1.4% from Jun 2012 to 21.1 billion.

The load factor or percentage of seats filled by passengers, however, declined 60 basis points from the sixth month of 2012 to 87.5%. Passenger revenue per available seat mile (PRASM) improved 1.0% year over year, supported by higher contributions from trans-Atlantic markets. The company registered a completion factor of 99.6%, with nearly 76.0% of its flights on schedule.

For the first six months of 2013, Delta generated RPMs of 93.9 billion (unchanged from the corresponding period, last year) and ASMs of 112.9 billion (down 0.8% year over year), while load factor was 83.1%, up 60 basis points.

In Jun, Delta – the second largest airline company in the U.S. after United Continental Holdings Inc. (UAL - Free Report) – acquired the 49% stake in British carrier Virgin Atlantic from Singapore Airlines, following the approvals of the U.S. Department of Justice and European Commission.

This acquisition entitles Delta and Virgin Atlantic to have the second major access to the New York-London travel route that is largely controlled by a partnership of AMR Corp.’s American Airlines and British Airways.

We believe that this transaction will help Delta to fortify its position within the global aviation industry and come closer to other international airline giants. The carrier will also be able to serve its customers with an extended and well-connected network interlinking prime locations at reasonable fares.

Delta operates with the likes of Southwest Airlines Co. (LUV - Free Report) and carries a Zacks Rank #2 (Buy).

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