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Delta Buries the Hatchet With A4A, Set to Rejoin Next Year

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Delta Air Lines, Inc. DAL announced plans to rejoin Airlines for America (A4A), the trade organization for leading U.S. passenger and cargo airlines, after having severed ties with the organization four years ago on policy disagreements.

Members of the organization include Alaska Airlines, the subsidiary of Alaska Air Group ALK, American Airlines AAL, Atlas Air Worldwide, FedEx Express, Hawaiian Airlines, JetBlue, Southwest (LUV - Free Report) , United Airlines, UPS and Air Canada. Delta will officially rejoin A4A in 2020 to promote sustainability initiatives, fight undue passenger taxes and support policies that facilitate travel experience.

Why Delta Left A4A

The Zacks Rank #3 (company) left A4A in 2015 as its policies did not match the organization’s. Notably, the airline paid $5 million to the trade group in annual dues as a member. Management felt that by quitting the trade association, the amount could be spent in a better way to support its own business. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The disagreements between the two parties surfaced when A4A refrained from supporting Delta on allegations that the Gulf carriers, namely Emirates, Etihad and Qatar airlines got undue advantage by receiving government subsidies. Delta and A4A were also at opposite poles on air traffic control reforms.

Winter Holiday Travel to Begin

Delta’s announcement comes ahead of the winter holiday travel period, set to begin on Dec 19. Per A4A’s projections, 47.5 million passengers are expected to fly aboard U.S. airlines across the globe over the 18-day (Dec 19-Jan 5) period. On average, 2.6 million passengers will likely take to the skies each day with daily volumes of 2.2-3 million. This indicates a 3% rise from the year-ago period. With an expected surge of 72,000 additional passengers daily, airlines will increase capacity by 88,000 seats per day, simultaneously offering 884 extra flights.

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