Please ensure Javascript is enabled for purposes of website accessibility

Is This Airline Climbing Into the Black?

By Tim Beyers - Updated Apr 5, 2017 at 8:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Its November traffic numbers are on the ascent.

You won't find many investors in our 120,000-strong Motley Fool CAPS community who like airlines -- especially Delta (NYSE:DAL):


Delta Air Lines

CAPS stars (5 max)


Total ratings


Bullish ratings


Percent Bulls


Bearish ratings


Percent Bears


Bullish pitches


Bearish pitches


Data current as of Dec. 5, 2008.

"Slowdown in travel will not offset the drop in oil prices," wrote CAPS investor darksabre last month in a bearish pan of Delta. "Airlines will cut fares and will cut extra costs in order to compete for business ... Some airlines will have to go under -- airline industry needs more consolidation."

There's truth to that. JetBlue (NASDAQ:JBLU), Southwest (NYSE:LUV), and Virgin America have held fare sales recently, the San Francisco Chronicle reports. So have UAL's (NASDAQ:UAUA) United, AMR's (NYSE:AMR) American, Continental (NYSE:CAL), and US Airways (NYSE:LCC), in markets where they compete with Southwest, reports the St. Louis-Dispatch.

Delta has also cut fares. But, looking at the November traffic numbers, I'm wondering whether dirty, rotten, beautiful Southwest is doing what it must, while Delta is playing a profitable brand of hardball.

Delta and AirTran were the only two airlines to record load factor gains last month, meaning their planes were fuller this year than last November. Southwest, by contrast, suffered the largest year-over-year percentage decline: 6.1 percentage points.

Has Delta merely cut fares to the bone, attracting customers who want nothing more than cheap flights? Or is this the rare carrier that's climbing toward the black? I'm not holding my breath. This, after all, is the airline that just merged with still-recovering Northwest.

Yet yesterday, I had zero interest in Delta's Q4 earnings report, due out Jan. 21. Today? Color me more than a little intrigued.

Taxi towards related Foolishness:

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. He also writes for Motley Fool Rule Breakers. See his portfolio and his Foolish writings. Or, if you're socially inclined, follow Tim on Twitter, where he's @milehighfool. The Motley Fool's disclosure policy, like a thick steak, is juicy and delicious.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$34.54 (-2.26%) $0.80
JetBlue Airways Corporation Stock Quote
JetBlue Airways Corporation
$8.61 (-4.86%) $0.44
Southwest Airlines Co. Stock Quote
Southwest Airlines Co.
$38.94 (-2.33%) $0.93

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.