Delta Air Traffic Continues to Decline

For the sixth month in a row, Delta Air Lines Inc. (NYSE:DAL) reported a decrease in air traffic for the month of January, along with a continued fall in capacity. Delta, like other passenger carriers, has been slashing capacity to deal with increasing fuel costs, said the report. The airline said that January traffic slipped 1.5 percent with a 4.3 percent loss in capacity.

However, load factor, or the percentage of seats filled, was up to 77.5 percent from 75.2 percent a year before, and passenger revenue per available seat mile — a key profitability metric — gained 14.5 percent. The company reported its initial January on-time performance was 86.4 percent with a completion rate of 99.4 percent.

Last month, Delta said its fourth-quarter earnings were up due to a double-digit rise in passenger unit revenue that helped compensate for higher fuel costs.

Delta M&A

Delta Air Lines, Inc. will likely make a takeover bid for US Airways Group (NYSE:LCC), Wall Street Journal reported last week. According to sources, Delta is working with Goldman Sachs Group (NYSE:GS) and Blackstone Group (NYSE:BX) on the analysis.

Relatedly, US Airways and Delta are reportedly considering bids for the bankrupt AMR Corp. (AAMRQ), which is parent of American Airlines. US Airways has confirmed this and Delta declined to comment.

Here’s how Delta’s stock is reacting to today’s news:

Delta Air Lines Inc. (NYSE:DAL): DAL shares recently traded at $10.99, down $0.31, or 2.74%. They have traded in a 52-week range of $6.41 to $12.13. Volume today was 9,420,097 shares versus a 3-month average volume of 12,132,900 shares. The company’s trailing P/E is 10.88, while trailing earnings are $1.01 per share.