Josiah Kwok ’26 pitched Delta Air Lines (NYSE: DAL) on November 19, 2025. Delta is one of the largest U.S. air carriers, operating an extensive domestic and international network supported by premium cabin offerings, a leading loyalty program, and a strong track record of operational reliability. The company has distinguished itself as the most strategically disciplined airline among both legacy and low-cost competitors.
Josiah’s investment thesis is three-pronged, emphasizing Delta’s strength among premium and corporate travelers, the shifting competitive landscape favoring legacy carriers over low-cost airlines, and Delta’s meaningful differentiation from fellow U.S. legacy carriers. Delta is well-positioned to capture sustained demand from affluent leisure and corporate travelers, with premium revenue up 9% year-over-year in Q3 2025 and expectations that premium cabin sales will exceed main cabin revenue by 2026. Continued investment in Delta One lounges and key coastal hubs further supports its ability to serve high-margin customers.
The second pillar focused on Delta’s advantage as industry dynamics tilt back toward legacy carriers. While (U)LCCs outperformed before the pandemic, rising labor costs, slowing demand from price-sensitive flyers, and the adoption of “basic” fares by legacy airlines have narrowed their traditional cost edge. Legacy carriers now lead North America in return on invested capital, and Delta’s resilient hub-and-spoke network has allowed it to maintain reliability and profitability even as low-cost peers struggle to capture premium travel demand.
Lastly, Delta’s differentiation from other legacy carriers reinforces its long-term outlook. United faces weakening inbound travel demand and higher leverage, while American continues to see the effects of strategic missteps that damaged corporate relationships and pressured earnings. Delta, by contrast, maintains investment-grade credit ratings, a stronger capital structure, and the highest profitability among the Big Three, supported by industry-leading on-time performance and customer satisfaction.
SMIF elected not to proceed with the proposed $51,417 allocation to DAL, funded by selling 265 HON shares and writing nine call options at a $67.50 strike price, citing reservations regarding Delta’s transition to a more stable, normalized revenue growth profile compared with recent years’ accelerated post-COVID recovery results.
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