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Delta's Smooth Flight So Far in 4Q17

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Part 4
Delta's Smooth Flight So Far in 4Q17 PART 4 OF 5

Demand at Delta Is Now Growing Fast

Traffic growth

Delta Air Lines’ (DAL) demand growth has continued its trend of growing at a faster pace than its capacity. This is a good sign for the carrier and has helped improve operational efficiency. In November 2017, DAL’s traffic grew 3.5% YoY (year-over-year). YTD (year-to-date), DAL’s traffic has risen 2.4%.

Demand at Delta Is Now Growing Fast

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Domestic traffic grows

Since Delta has been increasing capacity in the domestic region, traffic and demand growth is bound to be higher in that region. The domestic market has been the main source of demand growth for Delta throughout the year. In November, DAL’s domestic traffic grew by 3.3% YoY, and YTD, domestic traffic has grown 3.4%.

Peers United Continental (UAL), Alaska Air Group (ALK), and American Airlines (AAL) have yet to report their November 2017 results.

International market defies trend

In November, Delta’s international market recorded higher growth than the domestic market recorded. Delta’s international traffic grew 3.9% YoY for the month, despite its slow capacity growth. YTD, international traffic has grown 0.7%.

YTD, the Pacific region has seen a 9.7% fall in traffic. The Latin American region’s traffic has grown 4.1% YTD, while the Atlantic region has grown 5.0% YTD.

For the first two months of 4Q17, Delta’s traffic growth of 3.8% YoY has outpaced its capacity growth of 3.0%.

Notably, investors can gain exposure to Delta Air Lines by investing in the iShares US Consumer Services ETF (IYC), which has 1.0% of its holdings in DAL.

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