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Delta (DAL) Inks Environment-Friendly Deal With DG Fuels
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Delta Air Lines( (DAL - Free Report) entered into an agreement with hydrogen and biogenic-based fuel developer DG Fuels in an environment-friendly move. The deal is aimed at accelerating the production of sustainable aviation fuel (SAF), which is currently at a nascent stage.
Per the agreement, DG Fuels would supply Delta with 385 million gallons of unblended sustainable aviation fuel from 2027-end. The amount will be spread equally over seven years i.e., 55 million is expected to be delivered annually over seven years.
The SAF to be supplied to Delta is likely to come from timber waste, corn stover and cotton gin waste. The usage of SAF by Delta is expected to bring down lifecycle greenhouse gas emissions by 75-85% compared to conventional jet fuel. This is in line with DAL’s goal as a founder member of the First Movers Coalition.
We remind investors that DAL, presently carrying a Zacks Rank #3 (Hold), joined the coalition late last year in a bid to reduce greenhouse gas emissions. The coalition, spearheaded by the U.S. State Department and the World Economic Forum, is a public-private partnership and platform aimed at expediting the development of breakthrough technologies and fuels to protect the environment from harmful emissions.
SAF deals are now very common in the airline industry as companies aim to reduce carbon emissions to meet the Biden administration's broader goal of achieving a net-zero economy by 2050.
In May 2022, United Airlines (UAL - Free Report) inked an agreement with Finnish renewable fuel provider, Neste, to purchase SAF over the next three years. Per the agreement, UAL can buy up to 52.5 million gallons of SAF for its flights at Amsterdam's Schiphol Airport and potentially at other airports as well.
In June, United Airlines and its corporate venture firm, United Airlines Ventures inked an investment in and commercial agreement with Dimensional Energy. As part of the commercial agreement, UAL will purchase at least 300 million gallons of SAF over 20 years from Dimensional.
Continued recovery in air-travel demand bodes well for SkyWest. With better air-travel demand, SKYW carried 32.7% more passengers in the first half of 2022 than the year-ago level. As a result, the passenger load factor (percentage of seats filled by passengers) expanded 1450 basis points to 82.1% in the first half of 2022.
SKYW’s fleet-modernization efforts are commendable as well. The bullishness surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised more than 100% upward over the past 60 days. SkyWest has a Momentum Style Score of B. SKYW currently sports a Zacks Rank #1.
C.H. Robinson is being aided by an improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward CHRW's shareholders further instill confidence in the stock.
CHRW has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank of 2 (Buy).
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Delta (DAL) Inks Environment-Friendly Deal With DG Fuels
Delta Air Lines( (DAL - Free Report) entered into an agreement with hydrogen and biogenic-based fuel developer DG Fuels in an environment-friendly move. The deal is aimed at accelerating the production of sustainable aviation fuel (SAF), which is currently at a nascent stage.
Per the agreement, DG Fuels would supply Delta with 385 million gallons of unblended sustainable aviation fuel from 2027-end. The amount will be spread equally over seven years i.e., 55 million is expected to be delivered annually over seven years.
The SAF to be supplied to Delta is likely to come from timber waste, corn stover and cotton gin waste. The usage of SAF by Delta is expected to bring down lifecycle greenhouse gas emissions by 75-85% compared to conventional jet fuel. This is in line with DAL’s goal as a founder member of the First Movers Coalition.
We remind investors that DAL, presently carrying a Zacks Rank #3 (Hold), joined the coalition late last year in a bid to reduce greenhouse gas emissions. The coalition, spearheaded by the U.S. State Department and the World Economic Forum, is a public-private partnership and platform aimed at expediting the development of breakthrough technologies and fuels to protect the environment from harmful emissions.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SAF deals are now very common in the airline industry as companies aim to reduce carbon emissions to meet the Biden administration's broader goal of achieving a net-zero economy by 2050.
In May 2022, United Airlines (UAL - Free Report) inked an agreement with Finnish renewable fuel provider, Neste, to purchase SAF over the next three years. Per the agreement, UAL can buy up to 52.5 million gallons of SAF for its flights at Amsterdam's Schiphol Airport and potentially at other airports as well.
In June, United Airlines and its corporate venture firm, United Airlines Ventures inked an investment in and commercial agreement with Dimensional Energy. As part of the commercial agreement, UAL will purchase at least 300 million gallons of SAF over 20 years from Dimensional.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector are SkyWest (SKYW - Free Report) and C.H. Robinson (CHRW - Free Report) .
Continued recovery in air-travel demand bodes well for SkyWest. With better air-travel demand, SKYW carried 32.7% more passengers in the first half of 2022 than the year-ago level. As a result, the passenger load factor (percentage of seats filled by passengers) expanded 1450 basis points to 82.1% in the first half of 2022.
SKYW’s fleet-modernization efforts are commendable as well. The bullishness surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised more than 100% upward over the past 60 days. SkyWest has a Momentum Style Score of B. SKYW currently sports a Zacks Rank #1.
C.H. Robinson is being aided by an improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward CHRW's shareholders further instill confidence in the stock.
CHRW has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank of 2 (Buy).