DAL - Delta Air Lines Inc Analysis | Morningstar

Morningstar’s analysis frames Delta Air Lines as a premium-focused carrier whose strategy delivers most of the industry’s profits, but also leaves it with significant exposure if costs rise faster than pricing power. The report notes Delta has the highest revenue yield in North America and among the highest costs per seat mile. Even during the relatively stable 2015-19 period—after industry consolidation and during a decline in fuel expenses—Delta’s operating margins fell due to higher fuel, labor, and depreciation costs, even as capacity stayed roughly flat. While Morningstar expects Delta to keep capturing premium yields, it believes the gap between those yields and Delta’s costs will start to look more like the broader industry over the long run as postpandemic supply and demand normalize.