We surveyed a group of over 400 investors on whether shares of American Airlines Group Inc (NASDAQ:AAL) or Delta Air Lines, Inc. (NYSE:DAL) stock would grow the most by 2025.
Michael Gelband’s Exodus Point launched in 2018 with $8.5 billion in assets. Expectations were high that the former Millennium Management executive would be able to take the skills he had learned at Izzy Englander’s hedge fund and replicate its performance, after a decade of running its fixed income business. The fund looks to be proving Read More
American Airlines Vs. Delta Stock
American Airlines is the world's largest airline by scheduled revenue passenger miles. After completing a major fleet renewal, American also has the youngest fleet among U.S. legacy carriers.
Back in October, American Airlines reported third-quarter revenue of $3,173,000,000, which declined by 73.36% from the same period last year but beat the estimate of $2,760,000,000.
Meanwhile, Delta is known for being one of the world's largest airlines, flying to more than 325 destinations in 60 countries.
Delta operates flights in a hub-and-spoke system network, where it gathers and distributes passengers across the globe through key locations in Atlanta, New York, Salt Lake City, Detroit, Seattle and Minneapolis-St. Paul.
In addition, Delta's sale of frequent flyer miles, particularly to American Express (NYSE: AXP), is a major driver of the airline’s profits.
Amid the pandemic, Delta reported third-quarter total revenue of $3,062,000,000, which decreased by 75.62% year over year and missed the estimate of $3,110,000,000.
Both Airlines Will Sharply Recover
Sentiment between American Airlines and Delta from our study was split. A number of investors voiced that both airlines will sharply recover once the pandemic has subsided, but repeated that Delta should focus on offering lower-cost flights to attract customers in the interim.
One investor summarized the need for low-cost flights by responding “I believe the pandemic will be over in 2021 and fuel prices will be at an all time low. I favor American Airlines to grow more, who provides more budget conscious flights than Delta, but I see both succeeding in the near-future once the public health.”
As far as competition is concerned, it can be said that low-cost ticket models in the vein of Spirit (NYSE: SAVE) or JetBlue (NASDAQ: JBLU) pricing strategies have the potential to lead travel demand once the pandemic subsides.
As the American economy recovers, and if vacation travel were to return by summer 2021 budget-conscious travelers may seek accommodations from Spirit and JetBlue in order to maintain balance checkbooks.
Delta Poised For More Growth
A total of 52.3% of traders and investors told us shares of Delta would grow more by 2025 and 47.7% said American Airlines stock would grow more in the next five years..
This survey was conducted by Benzinga in December 2020 and included the responses of a diverse population of adults 18 or older.
Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 500 adults.
Henry Khederian contributed to this article.