Thursday, July 4, 2013

High flyers? Delta & US Airways

John PersinosThe airline industry is on a flight path for higher altitude this year, as economic recovery fuels demand for travel among newly con­fident consumers.

Last year, the industry racked up revenue of $637 billion and earnings of $6.7 billion. Despite these gains, stocks of the strongest carriers are trading at at­tractive valuations, making this a good time to grab a cheap seat on the sector's upward trajectory. Below, we look at two of the most promising airlines.

Delta Air Lines (DAL)

Delta, the world's second-largest airline, commands a growing domestic and international presence.

To cost-effectively propel its ex­pansion, Delta last year launched an ingenious remedy to high fuel costs that stunned both the oil and air­line industries: The airline bought a refinery. Fuel represents roughly a third of an airline's operat­ing costs, a burden that has been rising for the last decade.

Delta recently made other bold moves. On May 24, the airline opened a new $1.2 billion terminal in New York City's JFK International Airport that will provide a launching pad for wid­er service to emerging markets.

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