While Delta Air Lines (DAL - Free Report) expects to increase capacity by about 1,000 flights in July and August, the trend might not continue for the rest of the year as a resurgence of COVID-19 in parts of United States begins to surface.
In an internal memo on Thursday, Delta’s CEO Ed Bastian stated that beyond August, there might not be many more flight additions through the remainder of the year.
With modest uptick in passenger numbers since May, U.S. airlines have been adding back some capacity. Those plans might get hampered, given the recent spurt in coronavirus cases in some states.
Effective Jun 25, Delta resumed flights between Seattle and Shanghai-Pudong via Seoul-Incheon, operating twice a week. From July onward, it will operate flights once a week from Seattle and Detroit, also via Incheon.
Two weeks into the summer travel season, Delta has been seeing a slow but steady increase in passenger volumes, per Bastian. However, overall demand is expected to be only 25% of last summer's revenues.
Bastian reiterated that given the current demand scenario, the airline is “at least two years away from a return to normal.”
Zacks Rank & Key Picks
Delta carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Scorpio Tankers Inc. (STNG - Free Report) , Teekay Tankers Ltd. (TNK - Free Report) and Frontline Ltd (FRO - Free Report) . While Scorpio Tankers and Teekay Tankers carry a Zacks Rank #2 (Buy), Frontline sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Scorpio Tankers’ current-year earnings has been revised upward by 55% in the past 60 days.
The Zacks Consensus Estimate for Teekay Tanker’s current-year earnings has been revised 27.1% upward in the past 60 days.
The Zacks Consensus Estimate for Frontline’s current-year earnings has been revised 17.1% upward in the past 60 days.
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