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Delta Air Lines & Aeromexico Aim to Ease US-Mexico Travel

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The Atlanta, GA-based Delta Air Lines (DAL - Free Report) is making constant endeavours to widen its international presence. In line with this strategy, the carrier is looking to strengthen its presence in the lucrative Mexican market.

Notably, Mexico is currently inviting huge traffic, courtesy the depreciation of the Mexican peso. Given this favorable backdrop, Delta and Mexico’s largest airline Grupo Aeromexico strengthened their long-standing partnership by implementing a joint cooperation agreement (JCA) to operate flights connecting the U.S. and Mexico.

As part of the JCA, the carriers stated recently that they intend to launch five flights targeting new markets (Atlanta - Merida, Atlanta - Queretaro, Los Angeles - Leon, Seattle - Mexico City, Portland, OR - Mexico City). Apart from adding new routes, they aim to increase the frequency of flights and use more modern aircrafts in four and two markets, respectively. The measures aimed at facilitating travel between the nations, might be implemented as soon as this fall, subject to government clearance.

Among other benefits, the partnership will result in a 10% increase in trans-border seat capacity by Dec 31, 2017. Moreover, the alliance is likely to attract huge traffic, thereby boosting the carriers’ top line. Also, the collaboration should find favor with passengers as it offers them greater choice. The carriers aim to improve the travel experience of passengers by making suitable infrastructural investments.

Zacks Rank & Stocks to Consider

Delta currently carries a Zacks Rank #3 (Hold). Some better-ranked stock in the airline space are United Continental Holdings (UAL - Free Report) , Deutsche Lufthansa and Ryanair Holdings (RYAAY - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

We note that shares of Lufthansa, Ryanair and United Continental have gained 47.8%, 27.6% and 11.5%, respectively, on a year-to-date basis.

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