For airline stock Delta Air Lines (NYSE:DAL), Austin is suddenly a very hot property. And not just in temperature in the summer, either; Delta is increasingly making a play for Austin and ramping up its flights therein, looking to seize some market share from competitors. But investors aren’t exactly pleased about the idea, and Austin city limits prove no bright proposition as Delta dropped fractionally in Friday afternoon’s trading.
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The latest reports noted that American Airlines (NASDAQ:AAL) planned to pull 21 routes out of Dallas. So, in a move that would see Delta take over almost half of them, it added 11 new flights to Austin starting in April. The flights in question—both the canceled and the newly-added—target the Austin-Bergstrom International Airport, which is said to be one of the fastest-growing airports in the United States. Delta plans to connect Raleigh-Durham in North Carolina, Nashville, and Cincinnati to Austin, as well as connecting both McAllen and Midland-Odessa in Texas to Austin. Delta officials noted that Texas had long been “..a white space for opportunity on our network.”
Augmenting the Planes Too
It’s easy to wonder why American would drop flights at a hotly-growing airport in light of this, but Delta is definitely out to make hay while the sun shines. In fact, Delta planes have a new feature that’s catching a lot of attention: Bluetooth connectivity. Delta bought in on Airbus (OTHEROTC:EADSY) A321neo planes, which boast the Bluetooth function. Now, users will be able to connect external earbuds and the like directly to seat-back TV screens on Delta flights thanks to the new feature. Some fliers are already referring to the move as a “game changer,” but it remains to be seen how many more fliers will turn to Delta thanks to the new feature.
Is Delta Overvalued?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DAL stock based on 13 Buys assigned in the past three months, as indicated by the graphic below. After a 28.22% rally in its share price over the past year, the average DAL price target of $55.23 per share implies 30.91% upside potential.
