Delta Air Lines, Inc. (NYSE: DAL) operates as a major American airline for passengers and cargo traveling throughout the United States and around the world. The company is headquartered and has its largest hub at Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia. Delta is a founding member of the SkyTeam Alliance Network, offering more than 15,000 daily flights, with 323 destinations in 59 countries, partnering with 20 SkyTeam member airlines around the world.

 

The airline industry has become increasingly competitive in the past few decades. Airline carriers around the world have worked to cut costs to lower prices as a way to compete for customers. Delta's major competitors are United Continental Holdings, Inc. (NYSE: UAL), Southwest Airlines Co. (NYSE: LUV) and American Airlines Group, Inc. (NASDAQ: AAL). As of October 2017, Delta had a market capitalization of $38 billion and reported Q3 2017 revenue of 11.06 billion; it is one of the highest performers in the sector over the last five years.

1. United Continental Holdings, Inc.

United Continental Holdings, Inc. (UAL) is one of the largest airline holding companies in the world. As of October 2017, the company had a market cap of $20.6 billion and reported second quarter revenue of $10 billion. It operates internationally, as well as in the U.S., competing directly with Delta. United targets the same customer groups as Delta: the upper middle class, high-net-worth individuals (HNWIs) and frequent business travelers. Both are known as premier airlines offering high-quality service.

United is the founding member of Star Alliance, comprising 27 airlines with more than 18,450 daily departures combined, reaching 1,300 airports in more than 190 countries. Star Alliance directly competes with SkyTeam, affiliated with Delta. In addition, United is the largest U.S. carrier serving all parts of Asia.

 

2. Southwest Airlines Co.

Southwest Airlines Co. (LUV) has continued to make a major impact in the airline industry, taking market share away from thriving airlines such as Delta. As of October 2017, the company had a market cap of $34.7 billion and in July reported quarterly revenue of $5.74 billion. Southwest has been successful by offering friendly customer service and cheap flights, and limiting flights to higher revenue routes. The airline also utilizes its Boeing 737 fleet for all routes, minimizing maintenance expenses. Due to its success, Southwest has forced other airlines to change routes, cut prices and reduce amenities to compete.

However, despite its recent success, Southwest is relatively new compared to Delta and targets middle-class fliers as opposed to luxury or business class travelers. In addition, Southwest is heavily dependent on the American market in comparison to Delta, which operates internationally.

 

3. American Airlines Group, Inc.

American Airlines Group (AAL) is a holding company for American Airlines and U.S. Airways. The airlines merged on Dec. 9, 2013, as American Airlines emerged from bankruptcy. The merger created the world’s largest airline in terms of fleet size and number of passengers. As of October 2017, the company had a market cap of $25.8 billion and recorded $11.1 billion in revenue for the July quarter.

American caters to the upper middle class and frequent business travelers, the same target group as Delta. The airline is known for having the best customer loyalty program, a strong image for onboard entertainment and a strong new brand image since the merger in 2013. However, American Airlines Group's financial position is still a cause for concern as American Airlines only emerged from bankruptcy in 2013.

 

The Bottom Line

Delta is one of the best-performing airlines in the world. The airline, known for customer care and luxury, has maintained its upper middle class and business travel customer base. While many airlines continue to cut costs to compete with emerging low-cost airlines, Delta is continuing the serve the upper-class market where it thrives.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.