Over the past two years, shares of Delta Air Lines (NYSE:DAL) have more than quadrupled, crushing the market. Not surprisingly, many investors are wondering whether the stock has any upside left.

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Delta Air Lines 2 Year Stock Chart, data by YCharts

While Delta now has the highest market cap of any airline, its stock could still beat the market in the next few years. The benefit of Delta's cost-cutting programs will continue to grow in the next two years, while the company is just beginning to return significant amounts of cash to shareholders.

Putting 50-seat jets to bed

One big positive driver for Delta is its plan to retire most of its 50-seat regional jets. These jets are expensive to operate, and they are also cramped for passengers. Delta will replace its 50-seat jets with a combination of larger regional jets and small narrowbodies. These planes will have amenities like first-class cabins, Wi-Fi, and larger overhead bins.

At the end of last year, Delta's regional fleet still included about 250 50-seat regional jets. Now that the summer peak season has ended, investors can expect Delta to rapidly remove these planes from its fleet to reach its target of operating just 100-125 50-seat jets at the end of 2015.

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Delta is replacing many 50-seat jets with larger regional jets like this one (Photo: The Motley Fool)

In the near term, this "upgauging" strategy will help Delta reduce its unit costs. Longer-term, Delta's move to retire most of its 50-seat jets could help it gain market share. Many travelers -- especially high-value corporate customers -- care about having enough space to be comfortable when they fly. This will give Delta a leg up over carriers that operate more small regional jets.

Squeezing in seats

Delta is also looking to cut costs by adding seats to nearly 200 domestic aircraft, including its Airbus A319s and A320s and Boeing 757s. To make room for the extra seats, Delta is installing slim-line seats, while also introducing space-saving galleys and lavatories. These retrofits will be completed by the end of 2016.

Delta is using similar layouts to achieve a high seating density on the new domestic aircraft it is adding to its fleet (Boeing's 737-900ER and Airbus' A321). These efforts will help bring Delta unit costs down by spreading its expenses over more passengers.

Additionally, Delta's seating density initiatives are allowing it to continue operating older aircraft rather than replacing them immediately. This reduces capital expenditure requirements.

Lots of cash for dividends and buybacks

Delta's cautious approach to capital expenditures will pay big dividends for investors -- literally. The company expects to generate about $3 billion in annual free cash flow for the next few years.

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Delta has been able to return cash to investors by keeping CapEx in check (Photo: The Motley Fool)

Some of that cash will be used to bolster Delta's already-strong balance sheet. However, much of it will be available for Delta to return to shareholders in the form of dividends or buybacks. Delta recently boosted its dividend by 50%, bringing its yield up to 1%, and its board authorized a $2 billion share repurchase program that is supposed to be completed by the end of 2016.

Delta has plenty of room to boost its dividend. It is currently paying out $300 million a year, just 10% of its expected free cash flow. Delta also has a track record of exceeding its buyback goals -- it completed its most recent buyback two years ahead of schedule. This bodes well for Delta investors getting more cash than they expect in the next few years.

More room to run

Delta stock is certainly less of a "no-brainer" for investors than it was two years ago. That said, Delta is just starting to benefit from initiatives to reduce unit costs by retiring fuel-guzzling 50-seat jets and adding more seats to various domestic aircraft.

As a result, Delta could continue to grow earnings in the next few years even if unit revenue gains are harder to come by. Despite these profit-growth opportunities, Delta stock trades for just 10 times expected 2015 earnings , a significant discount to the market.

Delta is capitalizing on this situation by buying back shares while they remain fairly cheap. Patient investors should consider doing the same and collecting Delta's dividend while waiting for the shares to reach a level that fully reflects Delta's long-term opportunities.

Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.