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Delta (DAL) Reveals Bullish Expectations for Winter Travel

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Delta Air Lines (DAL - Free Report) expects to attract huge traffic in the upcoming winter holiday period, just like it did in the Thanksgiving holiday period last month. Buoyed by the Thanksgiving traffic, November turned out to be the strongest month in 2023 for the carrier. A similar strong performance in the winter holidays would help DAL close the year on a healthy note.

Riding on the buoyant air-travel demand scenario, Delta expects 9 million people to avail of its flights during the winter holiday travel period (Dec 21, 2023-Jan 7, 2024). In the event of the air traffic projection coming true, Delta’s fourth-quarter 2023 results would be boosted. The airline company has added routes to broaden its network to meet the anticipated demand swell during winter. 

In the 2023 Thanksgiving holiday period, 6.4 million customers flew on DAL flights between Nov 17 and Nov 28. The performance was in line with DAL’s expectation of attracting 6.2-6.4 million passengers to avail of its flights in the Nov 17-Nov 28 timeframe.  During the period, there were five days when no flight operated by Delta and Delta Connection carriers were canceled. Such a day is known as brand day. There have been 30 brand days so far in the current year at DAL, with 10 of them being in November.  

Driven by the upbeat air traffic scenario, DAL shares have gained 15.2% over the past month, outperforming its industry’s 11.3% uptick.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the airline industry may consider some better-ranked stocks like Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .

Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.

The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand. The Zacks Consensus Estimate for Air Canada’s 2023 and 2024 earnings has witnessed increases of 32.6% and 41.3% in the past 60 days, respectively.

SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet modernization efforts are commendable. The company’s initiatives to reward its shareholders also bode well.

The Zacks Consensus Estimate for SKYW’s current-year earnings has risen 38.9% in the past 60 days. The Zacks Consensus Estimate for next-year earnings has jumped 33.2% in the past 60 days.


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