How Is Delta Likely To Grow In The Next Two Years?

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Trefis
DAL: Delta Air Lines logo
DAL
Delta Air Lines

In comparison to its competitors, Delta Air Lines (NYSE:DAL) performed quite well in 2017. While the second half of the year recorded diminished earnings figures which hurt operations due to two major hurricanes, the company was able to bounce back towards the end of the year. We expect the company to grow at a good pace over the next two years to reach revenues of about $44 billion, at a CAGR of 3.2%. We have created an interactive dashboard which shows the forecast trends. You can modify the different revenue drivers to see how it will impact the company’s expected revenues.

Most of this growth is expected to come from the Mainline segment. We believe that strong demand coupled with higher than expected unit revenue growth on its international routes could drive 61% of the total growth over the next two years. Additionally, expanding its reach in the continental U.S. could help drive growth at Regional. That said, we expect this growth to be partially offset by increased pricing pressures.

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While Cargo revenue growth is expected to come in positive, the revenue increase will not be very much. In contrast, we expect a jump in sales at Mainline to help drive growth at Other as well, pushing the segment’s revenues to over $6 billion by FY 2019.

Overall, we expect the company to improve sales across all its division, leading to a near $2.74 billion increase in revenues to the FY 2017 figure of $41 billion.

 

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