Focus Stock: Should Delta Be on Your Radar?
S—P thinks the airline can leverage cost savings from its merger with Northwest and ranks the shares strong buy.
By Jim Corridore
From Standard & Poor's Equity Research
We view Delta Air Lines (DAL: recent price, 9) as the best positioned U.S. airline to take advantage of the industry environment entering 2009. Overall, we think the industry as a whole is likely to benefit from a sharp pullback in the price of oil and the resulting decline in jet fuel costs since late July 2008. We also believe the industry has already moved to pull down domestic seat capacity, which should allow supply and demand to remain in balance despite the expected decline in air travel demand that we see resulting from the global economic recession.
On top of the positive trends, we anticipate affecting the overall industry in 2009, we think Delta should be able to leverage its recently closed merger with Northwest Airlines to achieve cost and revenue synergies, allowing it to outperform U.S. industry peers financially over the next few years.
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S—P thinks the airline can leverage cost savings from its merger with Northwest and ranks the shares strong buy.
By Jim Corridore
From Standard & Poor's Equity Research
We view Delta Air Lines (DAL: recent price, 9) as the best positioned U.S. airline to take advantage of the industry environment entering 2009. Overall, we think the industry as a whole is likely to benefit from a sharp pullback in the price of oil and the resulting decline in jet fuel costs since late July 2008. We also believe the industry has already moved to pull down domestic seat capacity, which should allow supply and demand to remain in balance despite the expected decline in air travel demand that we see resulting from the global economic recession.
On top of the positive trends, we anticipate affecting the overall industry in 2009, we think Delta should be able to leverage its recently closed merger with Northwest Airlines to achieve cost and revenue synergies, allowing it to outperform U.S. industry peers financially over the next few years.
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