In a field like air travel, when you have to compete, there are several ways to do it. Normally, most like to compete on price, but for airline stock Delta Air Lines (NYSE:DAL), the plan is to step up its attractiveness and offer more appeal to the air traveler. This plan was greeted with mild interest by investors, who sent shares up fractionally in Thursday afternoon’s trading.
Delta recently discovered that its Sky Club lounges are popular destinations for travelers, and with good reason. Delta Sky Club lounges are fairly upscale experiences that offer free Wi-Fi, free cocktails, and a range of food options. But, since these places are often crowded—which takes a lot of the appeal out of them—Delta is stepping things up a notch by offering “premium” lounges, an even more upscale space.
The first is set to open this June at JFK Airport in New York and measures a whopping 38,000 square feet. The new lounges will come with full-service dining and “wellness” areas, though Delta kept quiet about entry requirements.
Not Just the Lounges, Either
Delta is also planning to modify its aircraft cabins, reports note, leaning toward “darker colors.” The Delta One Suites—Delta’s business class seating—will have seats with dark grey upholstery and red trim. Several other classes will also get darker color seating. There is some science behind this; darker colors are actually calming, some studies note, and getting people calmer on an airline ride can’t really be a bad thing. An upscale lounge plus a calm flight might make Delta a downright chill airline, and that might give it a whole new competitive edge.
Is Delta a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DAL stock based on 11 Buys assigned in the past three months, as indicated by the graphic below. After a 4.02% rally in its share price over the past year, the average DAL price target of $53 per share implies 31% upside potential.
