Originally Posted by
Route66
I'm glad your wife/friends like Delta. However, the numbers doesn't prove them (or you) right.
https://www.fool.com/investing/2016/...n-airline.aspx
American is a powerhouse based on these Motley Fool numbers alone. Size in the airline industry matters. Delta and American are comparative equals, except for American being almost a third larger. And we have/will have a much newer and fuel efficient fleet in the years to come more than Delta. Contract costs for Pilots/Flight attendants and mechanics are contained and long-term. American is and will be the most profitable in the foreseeable future. While debt is higher, cash is king and American has A LOT OF IT. American is now taking an active role in establishing a new hire pilot training program to keep pilots supplied to the airline. They are improving hotel feedback and working closer with the pilots.
With all of that happening and a promising future, WHO NEEDS A UNION?
Did you read the end of the article? The most important part, the summary?
Delta makes more money per seat, and incurs less of a cost to operate that seat, with 30% LESS EMPLOYEES, than AA.
Yes, we have newer airplanes, but we have last decades' airplanes. Delta will be replacing their fleet with the newer more efficient (15%+) aircraft and once again have a huge advantage over us.
Delta is a much better airline. The market likes increased EPS and the only way AA is able to do that moving forward is by buying back stock, not growing it organically.
"Determining the better buy
Having run through the tables above,
we can conclude that Delta holds three key advantages over American Airlines. First, it's more efficient operationally. Except for a period of three quarters from late 2014 through mid-2015, when Delta recorded significant mark-to-market adjustments on its fuel hedges, the company has produced consistently higher operating margins than American over the last five years.
Second, Delta is also more efficient with its capital. A determination to minimize debt and win its investment-grade rating means that the company's fleet expansion can be financed at a lower cost. More importantly, Delta is better positioned to weather a cyclical downturn in the airline sector due to its more modest leverage.
Last, and related to the first two factors, Delta produces highly impressive operating cash flow, better than even American's fine-tuned ability to wrench cash from operations. This allows it more flexibility in making capital decisions, and provides room for ample future share buybacks.
None of these factors alone illuminates Delta as being clearly superior to American Airlines. Both brands are vast and well-run enterprises. But as the business quarters add up, Delta's combined modest advantages over its worthy competitor should reward the patient investor with a higher multiple of earnings for Delta stock."