Delta Air Lines Inc. (DAL - Free Report) , one of the leading U.S. airlines, has launched its new Fly Delta application for iPad users. The offering, labeled Glass Bottom Jet, allows iPad users to access maps and social networking while flying on Delta’s Wi-Fi connected aircraft. The app will also help travelers book a trip, offer destination guides, flight check-in and updates on the next point of the journey.
The launch of the new application is a part of the company’s $140 million investment strategy in technologies, which also includes the launch of new Delta website and renovating self-service kiosks installed last year. The company is also progressing well on improving ancillary revenues by adding new features to its services as well as expanding new products to improve passenger satisfaction and experience.
Delta Air Lines is investing more than $2 billion through 2013 on improved products, services and airport facilities in the air and on the ground. Delta is also expanding seating facilities as well as installing winglets and Wi-Fi connectivity in the fleet. We believe the enhanced customer experience will lead to increased market traction and generate significant growth for the company.
The company is moving ahead with the introduction of full flat-bed seats in Business Elite class, expansion of the First Class cabin on more fleets and increasing Economy Comfort or Economy Plus seats. Moreover, Delta is going wireless with in-flight entertainment system - Delta Connect. These efforts to upgrade fleet products and services are expected to generate additional revenue of $1 billion by 2013.
We believe Delta Air Lines remains well positioned to benefit benefited from its investments made to improve operating efficiencies and customer experience. The company is successfully realizing benefits from the Northwest merger.
However, we are concerned about fuel price volatility, unionized labor, new advertising policy and competitive threats that are restraining the upside potential of the stock. In addition, the company faces stiff competition from carriers like United Continental Holdings, Inc. (UAL - Free Report) .
Delta Air Lines retains a Zacks Rank #3 (Hold). For the long term, we have a Neutral recommendation on the stock.