Delta Air Lines: Bullish Pilot Signal

seekingalpha.com
5 min read
standard
Delta Air Lines has hit multi-year lows due to negative headlines from Buffett and the Boeing CEO.The airline industry is already seeing traffic rebound contrary to the dire outlooks.The internal pilot staff targets are actually bullish on traffic rebounds over the next year.The stock is cheap based on achieving 75% of 2019 EBITDAR targets in 2021.
The internal pilot staff targets are actually bullish on traffic rebounds over the next year.

The airline stocks are taking a hit on every headline regarding the sector. Whether accurate or even actually negative, Delta Air Lines (DAL) has now crashed below the Buffett low of $20.75. My investment thesis remains highly bullish on the stock and the sector as daily traffic rebounds and the market is ignoring this recovery.

Image Source: Delta Air Lines website

Boeing CEO Comment

Back on Tuesday, the Boeing (BA) CEO made an unexplainably negative comment about his customers. When asked on The Today Show about major airlines surviving, he sounded unnecessary alarms suggesting he had inside information on the sector:

I don't want to get too predictive on that subject but yes, most likely. Something will happen when September comes around. Traffic levels will not be back to 100%. They won't even be back to 25. Maybe by the end of the year we approach 50. So there will definitely be adjustments that have to be made on the part of the airlines.

His statement came about a week after Warren Buffett confirmed Berkshire Hathaway (BRK.A, BRK.B) had sold out of all airline positions. Berkshire had a combined position topping $10 billion via nearly 10% positions in the major airlines of Delta, American Airlines Group (AAL), United Airlines (UAL) and Southwest Airlines (LUV).

The combination of these two statements has airline stocks trading at decade lows here. The news snippets aren't based on facts though and are more indications of these gentlemen having a few that passengers need a vaccine to fly.

Pilot Cuts

Apparently, Delta management sent out a memo stating a need to drastically reduce pilots by the Fall and into 2021. The large numbers sound alarming, but the pilot cuts are drastically better than the related numbers coming from the Boeing CEO confirming Dave Calhoun has no actual insight with the major airlines.

Delta SVP John Laughter was quoted as making the…
Stone Fox Capital
Read full article