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Few inventions have changed how people live and experience the world as much as the airplane. It has altered the way in which people live, travel, and conduct business by cutting travel time and making any place reachable.
That being said, Delta Air Lines (DAL) and American Airlines (AAL) are two of the power houses of the U.S. airline industry and if are looking to get in on the industry from an investment perspective, you may want to consider these companies in your portfolio.
We will analyze both companies using statistics ranging from customer service to key air industry statistics and financial data. Delta Airlines is currently trading at $39.42, up about 41.84% YTD and American Airlines is currently trading at $38.29, up about 51.70% YTD.
Customer Service
5. 2014 American Customer Satisfaction Index Scores
Looking at the customer service numbers, we can deduce that Delta has a better service for customers than American Airlines. These statistics are significant because at the heart of the airline industry, it is a service and when holding all things equal, the airline with better customer service will be the better company.
Since we cannot hold all things equal in stock picking, these numbers should be in the back of your mind when thinking of which airline stock to add to your portfolio, as a better customer experience can definitely help a company’s long term performance.
Key Airline Industry Ratios/Terms
SOURCE: Bureau of Transportation Statistics T-100 Segment data.
The above graphs help explain the popularity of each airline and how loyal customers are to each airline. Total # of passengers per year typically gauge how popular an airline is and indicates if the company is generally doing well or poorly.
As you can see from the past decade, American Airlines totaled more passengers and flights per year since early 2000, but Delta eventually took over in both categories in 09’ when it jumped tremendously. As we can see from the load factor, both companies seem to be consistently growing and currently hovering around the 80% mark. This measures the capacity utilization and efficiency of an airline to fill sears and generate fare revenue.
Available Seat Miles measures an airplanes capacity available to generate revenue. ASM basically measures an airlines revenue-generating abilities based upon traffic. This metric is very important for investors because it indicates which airlines is best at generating revenue from the availability of seats to customers.
As you can see, American Airlines is the winner at the beginning of ’02, but eventually gets overrun by Delta beginning in 09’. This could be explained by the merger of Delta Airlines and Northwestern Airlines which resulted in the largest commercial airline in the world (at the time) with 786 aircraft and $17.7 billion in enterprise value.
Revenue Passenger Mile (RPM) is an important metric that shows the number of miles traveled by paying passengers. RPM’s are the backbone of most transportation metrics because it accounts for both number of paying passengers and miles flown. Again, we see a similar story after 09’ where Delta presumes to take over American Airlines in RPM’s which could be attributed to the merger with Northwestern Airlines.
Key Financial Statistics
Valuation
From the above valuation statistics, we can deduce that while Delta is the bigger company in terms of market capitalization, both companies seem to be not overvalued. Growth is better accounted for in Delta than in American which could give investors bigger gains in the future given American has positive investment news.
Profitability
According to the data above, the most noticeable metrics are American Airlines negative profit margin and negative Net income to Common Shareholders. Both companies have similar gross profit per year hovering around $15 million, but the significant difference comes from operational cost management where American Airlines Gross Profit gets significantly subtracted relative to Delta Airlines.
One potential reason could be from Income Tax Expense where Delta and American generate a net value of $8.01bil and -$346 million, respectively. Both Airlines generate similar revenue and American Airlines comes out on top generating higher revenue per share giving some positive signs for their shareholders. Although American Airlines has about 4.5x higher Debt/Equity than Delta Airlines which indicates that costs could potentially hinder their growth for gross profit and revenue for the coming years.
Bottom Line
When analyzing these companies from an investor standpoint, it would be arguably difficult to say that American Airlines is the better stock to have in your portfolio. Yes, American Airlines is a little more experienced in being publicly traded and both companies have a similar rate of return on their common stock since going public.
According to the customer service data, Airline key ratios, and financial data, Delta Airlines as of now seems to be the stock to be investigating more to potentially have in your portfolio. We currently have both companies as a Zacks Rank #3 (hold) due to mixed consensus on earnings estimate revisions for the next year. Delta and American has had a positive average earnings surprise of 5.79 % and 62.23% respectively.
Investors should be watching to see how Delta will maintain their growth that they have incurred after their merger with Northwestern Airlines. Also, investors should carefully watch how American Airlines will control their operational costs and generate a positive net income for their shareholders. These massive Airlines are big players in the airline industry and you should research how these companies will capitalize in the upcoming holiday season.
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Read the analyst report on DAL
Read the analyst report on AAL
The Seattle Seahawks kick off the 2014 National Football League season with a Thursday night game against the Green Bay Packers. As always, the “12th Man,” a phrase used to symbolize the rabid Seahawks fan base will be of vital importance as the Seahawks play host on the first game of the team’s campaign to become back-to-back Super Bowl champions. The concept of the 12th Man has become such an integral part of the Seahawks franchise that it has expanded beyond the stadium and into promotions involving the team and even its former players. Such is the case with a brand new marketing effort involving Delta Air Lines Delta Air Lines.
Announced today, former Seahawks running back Shaun Alexander has partnered with Delta Airlines to launch a new promotion called the “Delta 12th Row Seahawks Road Trip Sweepstakes.” The campaign will offer eight fans the opportunity to win two round trip tickets on Delta airplanes to attend one of eight Seahawks’ road games during the 2014 NFL regular season. Of course, the fans must sit in the 12th row of any flight.
“The 12th Man travels. Any time you give the fans the opportunity of connecting with the team they are going to try to do that,” said Alexander in an interview to discuss his new partnership with Delta. Asked whether he will travel with the fans who win the sweepstakes, Alexander answered that he is blessed to have seven beautiful children, which will make it tough to attend the games. However, he said he is pretty sure that he will make the trip when the Seahawks play the Washington Redskins on October 6. Alexander finished his NFL career with the Redskins.
12th Man Flag at CenturyLink Field during an NFL game of the Seattle Seahawks vs. Tampa Bay Buccaneers. (Photo credit: Wikipedia)
According to ticket search engine TiqIQ, one of the toughest tickets on the secondary market going into the 2014 NFL regular season is a November 27 match-up between the Seahawks and San Francisco 49ers in San Francisco. TiqIQ currently ranks that game as having the third most expensive average ticket price of all NFL teams’ regular season games. Winners of the Delta 12th Row Seahawks Road Trip Sweepstakes will have an opportunity to forfeit spending the high price to attend that game (if they so choose) and have all travel costs taken care of by Delta as well.
Fans can enter to win the sweepstakes at any of the Delta-branded kiosks in the Delta Sky360 Club at CenturyLink CenturyLink Field or by visiting Seahawks.com.
Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.
The high cost of fuel spells the end of reign of the B747, the aircraft that was launched 44 years ago with a mammoth passenger and cargo capacity. It truly democratized air travel, transporting popes and princes, presidents and paupers.
Philippine Airlines, Cathay Pacific, British Airways, Delta Airlines, and Qantas have jettisoned their fleet of B747s for the more fuel-efficient two-engine varieties.
First-class passengers at Philippine Airlines’ Skylounge on the B747 sat in luxurious comfort, 25 feet high while still on the ground. Those seated in economy were some 200 feet away from the front.
It was so huge a fully loaded tank of aviation gas would equal 216,000 liters. It is said that a regular car would not be able to consume this volume during the vehicle’s lifetime!
Which is more fuel efficient, a B747 or a car?
According to Boeing, the B747 uses approximately 1 gallon of fuel (about 4 liters) every second. Over the course of a 10-hour flight, it might burn 36,000 gallons (150,000 liters).
A B747 is transporting 500 people 1 mile using 5 gallons of fuel. That means the plane is burning 0.01 gallons per person per mile. In other words, the plane is getting 100 miles per gallon per person.
The typical car gets about 25 miles per gallon, so the 747, cruising near the speed of sound, is much better than a car carrying one person, and compares favorably even if there are four people in the car.
On the inaugural flight to Chicago on Nov. 17, 1985, PAL flew the complete Philharmonic Orchestra playing onboard to the delight of the passengers.
To be a B747 captain was considered the zenith of a pilot’s flying career. In the early years of the B747, a pilot would require an average of 10,000 flying hours or at least 10 years before he qualified as a B747 captain.
The B747-400 was PAL’s first aircraft to carry more than 400 passengers. It could fly up to more than 13 kilometers.
It said that the entire length of the B747-400 – 231 feet and 10 inches – is approximately the distance flown by Kitty Hawk (the first airplane invented by the Wright Brothers) on its first successful test flight.
JACKSONVILLE, Fla., Sept. 2 (UPI) — A Delta Airlines flight from New York was diverted en route to its Florida destination when an argument broke out related to a reclining seat, a witness said.
Aaron Klipin, a passenger aboard Delta Flight 2370 from New York’s LaGuardia Airport to Palm Beach International Airport in Florida, said the plane was diverted to Jacksonville, Fla., when a passenger became irate about another passenger’s reclined seat.
Delta said the flight, which departed New York at 7 p.m. Monday, was diverted “due to safety reasons in regard to a passenger issue.”
Klipin said he was seated next to a woman who attempted to recline her seat while a second woman, later identified as Amy Fine, 32, was trying to sleep with her head down on the tray table attached to the back of the seat.
“This woman sitting next to me knitting tried reclining her seat back, the woman behind her started screaming and swearing. The flight attendant came over and that exacerbated what was going on. She demanded the flight land,” Klipin said.
Fine, of Boca Raton, Fla., was escorted off the plane by police and released following an interview, a Jacksonville Aviation Authority police report said. The report said Fine told officers she had been feeling very emotional at the time of the incident because two of her dogs had recently died.
The flight continued after Fine was escorted off the plane and it arrived at the Palm Beach International Airport shortly after 11 p.m. Airport officials said Fine was allowed to board a different flight following her release.
By Chris Stewart Brian Entin
WEST PALM BEACH, FL (WFLX) – A Delta Airlines flight, from LaGuardia to Palm Beach International Airport, had to be diverted to Jacksonville Monday night due to an unruly passenger who lives in Boca Raton.
According to Delta Airlines, Flight 2370 was diverted “due to safety reasons in regard to a passenger issue”.
A report from the Jacksonville Aviation Authority identified the passenger as Amy Caryn Fine, 32, of Boca Raton.
An onboard witness, Aaron Klipin, was seated next to a woman who attempted to recline her seat. The report said Fine was trying to sleep on a tray table and was struck in the head by the reclined seat. “This woman who was sitting next to me, knitting, actually tried reclining her seat back, and the woman behind her started screaming and swearing and the flight attendant came over, and that just exacerbated what was going on, and then she demanded that the flight land,” he said.
Klipin said when a flight attendant was called, the incident became heated and Fine insisted that the flight be diverted to the next stop.
The flight attendants tried to calm down Fine, but they said she continued to be disruptive and loud.
“She started swearing at the flight attendants and then demanding that the flight land. The flight attendants went and spoke with the captain, while somebody was blocking her path to the cabin. Then, a few minutes later, an announcement came on that we were diverting to Jacksonville,” Klipin said.
Klipin said that Fine stated something to the effect of, “I don’t care about the consequences put this plane down now.”
Fine said in the report that she had two dogs die, and she was very emotional.
The flight attendants were concerned for the safety of themselves and the passengers, forcing the flight to be diverted to Jacksonville International Airport.
According to Klipin, a flight attendant stayed next to Fine until the plane landed in Jacksonville at 9:30 p.m., where she was escorted off the plane by police.
Fine was taken to the rental car center area and released without incident, said the Jacksonville Aviation Authority report.
Copyright 2014 WFLX. All Rights Reserved.
A Florida woman, mad that a fellow passenger had bonked her on the head by reclining her seat, forced a packed flight out of La Guardia Airport to make an emergency landing Monday — and got away with it.
Unemployed Boca Raton resident Amy Fine got off without criminal charges — despite allegedly flailing her arms and shouting, “Put this plane down now!” at the crew of Delta Flight 2370, who inexplicably gave in to her demand to land the Palm Beach-bound flight.
The 32-year-old passenger — who had been sitting in a premium coach section with extra legroom — flipped out when she was bumped by the reclining seat, according to a police report. She had apparently been trying to sleep with her head on the tray table when the other passenger leaned back.
Fine allegedly flipped out, berating the woman as stunned fliers looked on.
“This woman sitting next to me knitting tried reclining her seat . . . The woman behind her started screaming and swearing,” witness Aaron Klipin told WPTV in West Palm Beach.
Fine focused her fury on crew members who tried to break up the fight.
“The flight attendant tried to clam Ms. Fine down,” the police report said. “The more they tried to calm her down, the more upset she became.”
Fine allegedly told the crew to “eat s- -t and die,” and demanded that the flight land immediately.
The flight attendants told Fine that landing was impossible. But Fine had other ideas and allegedly continued her tantrum. She waved her arms in the air and got “very combative” as she continued to demand that the flight touch down, according to the report.
Attendants alerted pilots as a crew member blocked the raging Fine from rushing the cockpit. The pilots decided to land because “they were concerned for the safety of themselves and the passengers,” the police report said.
The plane touched down 260 miles from Palm Beach, in Jacksonville, at 9:30 p.m.
Instead of hauling Fine off in handcuffs, cops and the FBI questioned the Brooklyn native and apparently bought her sob story about recently losing two dogs. They released her without charges.
The incident marks the third time in two weeks that passengers have gotten into brawls on US flights over legroom and reclining seats.
A Delta Airlines flight from LaGuardia to Palm Beach International Airport was diverted to Jacksonville when a passenger got into a dispute over a reclining seat.
Delta Flight 2370 departed at about 7 p.m. Monday, en route to West Palm Beach. According to Delta Airlines, the flight was diverted “due to safety reasons in regard to a passenger issue.”
Passenger Aaron Klipin said described what happened.
“This woman sitting next to me knitting tried reclining her seat back, the woman behind her started screaming and swearing. The flight attendant came over and that exacerbated what was going on. She demanded the flight land,” said Klipin.
Klipin said the woman who was agitated — later identified as 32-year-old Amy Fine — claimed she had her head down on the tray table trying sleep.
“She said something to the effect of, ‘I don’t care about the consequences, put this plane down now,'” said Klipin. “She started swearing at the flight attendants and demanding the flight land. The flight attendant spoke to the captain while somebody was blocking her path to the cabin. A few minutes later an announcement came on that we were diverting to Jacksonville.”
According to the Jacksonville Aviation Authority police report, Fine, 32, of Boca Raton, was escorted off the plane, interviewed, then released.
According to the report, Fine said she was hit on the head with the seat in front of her reclined, and they “did have words,” but claims she was not disruptive.
All three flight attendants were interviewed, telling police Fine was “disruptive and very loud,” demanding that they land the plane immediately.
One flight attendant police that Fine told him to, “Eat (expletive) and die.”
In her interview, Fine told officers she just had two dogs die and she was very emotional.
The Delta flight continued on to West Palm Beach, arriving after 11 p.m. Airport officials said they consulted with the FBI, then Fine was released and allowed to board a different flight.
This incident would be the third reported flight diversion caused by passenger disruption in the last few weeks.
Arguments over reclining seats contributed to two incidents last week. A Miami to Paris flight landed in Boston Wednesday, after air marshals on the plane restrained a man who fought with a passenger trying to recline in front of him, according to authorities.
Before that incident, a man on a United Airlines flight used a product called a Knee Defender to keep the seat in front of him from reclining. The woman in front, unable to recline, got into an argument with the man and reportedly threw a cup of water in his face. Both passengers were seated in United’s Economy Plus section, which gives fliers extra legroom for an extra fee.
That argument prompted the Newark, New Jersey-to-Denver flight to be diverted to Chicago, according to United Airlines, adding that the unidentified passengers were not allowed back on when the plane continued on to Denver.
WEST PALM BEACH, Fla. – A Delta Airlines flight from LaGuardia to Palm Beach International Airport had to be diverted to Jacksonville Monday night due to an unruly passenger who lives in Boca Raton.
According to Delta Airlines, Flight 2370 was diverted “due to safety reasons in regard to a passenger issue.”
A report from the Jacksonville Aviation Authority identified the passenger as Amy Caryn Fine, 32, of Boca Raton.
The onboard witness, Aaron Klipin, was seated next to a woman who attempted to recline her seat. The report said that Fine was trying to sleep on a tray table and was struck in the head by the reclined seat.
“This woman who was sitting next to me knitting actually tried reclining her seat back and the woman behind her started screaming and swearing and the flight attendant came over and that just exacerbated what was going on, and then she demanded that the flight land,” he said.
Klipin said when a flight attendant was called, the incident became heated and Fine insisted that the flight be diverted to the next stop.
The flight attendants tried to calm down Fine, but they said she continued to be disruptive and loud.
“She started swearing at the flight attendants and then demanding that the flight land. The flight attendants went and spoke with the captain, while somebody was blocking her path to the cabin. Then, a few minutes later, an announcement came on that we were diverting to Jacksonville,” Klipin said.
Klipin said that Fine stated something to the effect of, “I don’t care about the consequences put this plane down now.”
Fine said in the report that she had two dogs die, and she was very emotional.
The flight attendants were concerned for the safety of themselves and the passengers, forcing the flight to be diverted to Jacksonville International Airport.
According to Klipin, a flight attendant stayed next to Fine until the plane landed in Jacksonville at 9:30 p.m., where she was escorted off the plane by police.
Fine was taken to the rental car center area and released without incident, said the Jacksonville Aviation Authority report.
The flight landed in West Palm Beach at 11:13 p.m., said Delta spokesman Morgan Durrant.
This is at least the third time in the last ten days a passenger’s behavior has caused a flight to be diverted.
“The real key is people don’t act appropriately in public. This needs to stop,” explained NewsChannel 5 aviation expert, David Bjellos.
In June, a set of principles were adopted industry-wide at the 70th annual meeting of the International Civil Aviation Organization. The principles clarify an airline’s right of recourse and rights to reclaim costs incurred. Flight diversions can cost airlines up to $200,000. Passengers who cause flight diversions could be held financially responsible for the diversions and expenses for flight crews, fellow passengers and fuel costs.
Bjellos says, in addition to the cost of the diversions, they inconvenience hundreds of other passengers.
He says it’s impossible to penetrate a cockpit door and it’s rare for an angry passenger to become physically dangerous to others in the cabin.
“Airlines always use the term, out of an abundance of caution. Tell me exactly what a screaming woman in the back of an airplane is going to do to disrupt a flight to the point it’s dangerous for the flight and crew? Absolutely nothing,” Bjellos said.
Bjellos suggests passengers inconvenienced by the disruptive passengers file a class action lawsuit. He also says the airlines should create a no-fly list for people who are disruptive.
“You do this once? No fly for a year. Anywhere, anyone, anytime. You do it twice? You don’t fly anymore,” he said.
The best solution, Bjellos says, is for all passengers on all flights to be as courteous as possible to the people around them. They are, after all, people who they will likely never see again after they land.
“The people that we have flying on these airplanes don’t have etiquette in their vocabulary. Or their demeanor. It just simply does not exist. They’re rude because that’s the way they are at home, that’s the way they are at work, and that’s the way they are everywhere else and we put them on the airplane,” he said.