Delta Air Lines: We Only Have Room for One Airline in the Front of the Cabin

Delta Air Lines positions itself as a premium airline, with the highest costs and revenue per seat mile in the North American market. Even in the relatively harmonious 2015-19 period after the airline industry consolidated and fuel costs fell, Delta's industry-leading operating margins declined due to increased fuel, labor, and depreciation expense on almost flat capacity. While we believe Delta will continue to garner premium revenue yield, we see the spread between those yields and its overall costs more closely resembling the industry in the long term, especially as the levers of segmentation and the definition of a "business traveler" evolve.