Delta Air Lines (DAL - Free Report) in association with the Port Authority of New York and New Jersey (PANYNJ) and JFK International Air Terminal LLC (JFKIAT) will invest an additional $175 million for the re-vamp of Terminal 4 at New York’s John F. Kennedy (JFK) International Airport. Delta – the second largest airline company in the U.S. after United Continental Holdings Inc. (UAL - Free Report) – will individually put in $5 million to enhance information technology facilities.
In 2011, Delta reached an agreement with PANYNJ and JFKIAT to shift its international operations at JFK to Terminal 4. Accordingly, the U.S. airline company announced an initial redevelopment program, worth $1.2 billion, for Terminal 4 which is expected to start operations in May.
As per the initial renovation program – already 90% complete –Terminal 4 will have 9 new and 7 modernized international gates, improved check-in areas that will include a superior Sky Priority check-in counter plus a centralized security checkpoint.
Delta has also introduced new dining and retail spaces as well as Delta Sky Club, a flagship with the first ever Sky Deck outdoor terrace. Passengers at the terminal will experience less congestion with dual taxiways and shorter taxi times; and will see better Customs and Border Protection and baggage claim facilities.
The currently announced additional investment will be directed toward adding 11 more gates, totaling 27 gates at the terminal committed to Delta. Consequently, the company’s regional jet operation at Terminal 2 will cease. These new gates will be designed with a dedicated boarding counter as well as a comfortable seating area and jet bridge.
Each gate will have the capacity to accommodate two-class regional jets plus render the option of gating other mainline aircraft. This will also add 75,000 square feet to Terminal 4's Concourse B.
The improved and expanded Terminal 4 – which was supervised by JFKIAT over the last few years – will replace the old-fashioned Terminal 3 facilities. Following the opening of the terminal in May, Delta plans to double the current shuttle bus operation for people between Terminals 2 and 4. Terminal 3 will be used as a parking space for aircraft, following its demolition by summer 2015.
Delta management believes that a glamorous and improved Terminal 4 will attract more flyers, resulting in higher tourism in the city of New York. Apart from developing the infrastructure of the city airport, the expansion will render comfortable and luxurious services to visitors.
With the target to reap in high revenues and earnings in 2013, Delta is involved with various strategic actions that include re-organization of fleet, introduction of attractive services, capturing of new markets and profitable takeovers. The company is collaborating with top brands like Malin+Goetz and Tumi Holdings Inc. to offer travel luxuries to BusinessElite passengers.
We believe that these innovative and attractive initiatives along with enhanced service offerings will position the company in an advantageous position compared to other industry players such as JetBlue Airways Corp. (JBLU - Free Report) .
Delta currently holds a Zacks Rank #3, implying a Hold rating.