Leading passenger and cargo carrier Delta Air Lines Inc. (DAL) reported growth in traffic for Dec 2013 owing to strong contributions from domestic, Latin America and Atlantic regions. Shareholders reacted positively on the news as the stock gained 5.52% on Friday trade on Nasdaq.
The company’s airline traffic – measured in revenue passenger miles or RPMs, which imply revenue generated per mile per passenger – moved up 6.9% year over year to 15.8 billion. Consolidated capacity (or available seat miles/ASMs) for the month, increased 3.8% from Dec 2012 to 18.5 billion.
The load factor or percentage of seats filled by passengers leaped 250 basis points from Dec 2012 to 85.2%. Passenger revenue per available seat mile (PRASM) improved 10.0% year over year aided by continuous strong demand and benefits from the timing of the Thanksgiving holiday. The company registered a completion factor of 99.6%, with nearly 79.5% of its flights on schedule.
For the entire 2013, Delta generated RPMs of 195.0 billion (up 1.0% from the corresponding period last year) and ASMs of 232.7 billion (up 1.0% year over year). The load factor was flat year over year at 83.8%.
Delta also revealed plans to expand its services in South East Asia by launching nonstop flights from Seattle to Seoul and Hong Kong. The Atlanta-based carrier further strengthened in Seattle by announcing new daily non-stop flights from Fairbanks and Vancouver International Airport.
Further, the company’s joint venture with Virgin Atlantic Airways is all set for a summer 2014 takeoff on combined service offerings, which will add flight options for trans-Atlantic customers. We expect the company to be well positioned over the coming months owing to various strategic initiatives such as route launches, partnerships, renovation of airport terminals and upgrade of fleet structure.
However, the recent mega merger between American Airlines and U.S. Airways Group to form American Airlines Group Inc. (AAL) remains a major competitive threat to the company in both domestic and international markets.
Delta operates with the likes of United Continental Holdings Inc. (UAL) and JetBlue Airways Corp. (JBLU), and carries a Zacks Rank #3 (Hold).
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