Shares in U.S. flyer Delta Air Lines (DAL) were higher today after a leading analyst said strong demand from bankers and IT boffins had left it as one of the ‘best positioned’ companies in the sector.
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Accelerating Corporates
Tom Fitzgerald, analyst at TD Cowen, said that Delta, which issues its Q3 earnings next week, would benefit from the strong momentum seen in corporate travel, premium seating, and international trips since the summer.
Delta rival United Airlines (UAL) is also expected to benefit from these drivers and outperform its peers, Fitzgerald said.
That would continue the pattern already seen so far this year – see below:
Breaking down those drivers, Fitzgerald said Delta and United have exposure to accelerating corporate travel demand. “Our checks indicate that the finance, consulting and technology sectors continue to exhibit the strongest demand,” he said. “Robust long-haul international demand also has momentum. The elongation of the Atlantic travel into an almost year-round market buoys the shoulder season.”
That is industry talk for quieter periods in the air travel industry. Shoulder seasons can differ depending on the location, but are usually during autumn and spring.
Loyalty Partners
Fitzgerald also highlighted durable demand for premium seating. “Consumers are still prioritizing comfort in their travel journey, whether on the plane or at the airport lounge. This is especially true for airlines serving longer stage length routes,” he said. “Sticky loyalty revenues [are also important]. While leisure airlines are increasing earn/burn mileage rates, United and Delta continue to broaden the relevance and increase the utility of their programs by adding exclusive non-airline loyalty partners such as Alphabet’s (GOOGL) YouTube and Spotify (SPOT), whose products dovetail with enhancing the onboard experience.”
He did caution, however, that “main cabin tickets and price sensitive leisure remain the laggards.”
TD Cowen is also bullish long-term on shares of Alaska Air Group (ALK) and American Airlines (AAL), but Fitzgerald said they have less near-term upside than Delta and United as 4Q25 estimates look likely to be revised down.
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