Delta to Connect Los Angeles-Shanghai to Boost Asia Services - Analyst Blog
In a bid to strengthen its services in Asia, airline behemoth Delta Air Lines Inc. (DAL) announced that it intends to launch daily nonstop flights between Shanghai, China and Los Angeles. After gaining regulatory approvals, Delta will start operating on the Los Angeles–Shanghai route from July 9, 2015.
This new route will be the fourth daily nonstop flight to be operated by this Atlanta, GA-based carrier in the Asia-Pacific region. The choice to fly from Los Angeles seems to be a prudent one as the city currently accounts for one fourth of the entire U.S.-Asia air travel demand.
Delta maintains that the introduction of this service will go a long way in enhancing connectivity on the US-Asia route. The flight to Shanghai from Los Angeles will connect fliers to more than 25 Chinese cities, while the return flight will do the same for 40 markets in the U.S., Canada and Latin America. We note that United Airlines – the wholly owned subsidiary of United Continental Holdings, Inc. (UAL) – already operates on this route.
The Boeing Company’s (BA) 291-seater 777-200LR aircraft, which contains 37, 36 and 218 full flat-bed seats in the BusinessElite, Economy Comfort and Economy class respectively, is being used for the new service. Delta already offers daily service to Beijing from Seattle as well as Detroit. We note that Delta is constantly looking to add new routes in a bid to expand operations and enhance customer satisfaction.
Though pleased with Delta’s announcement to operate in the Los Angeles–Shanghai route, we believe investor focus will remain on the company’s fourth-quarter 2014 results, scheduled to be released on Jan 20. We expect the carrier to report higher-than-expected earnings in the quarter.
Zacks Rank
Delta Air Lines currently carries a Zacks Rank #1 (Strong Buy). An equally well-ranked stock in the airline space is JetBlue Airways Corp. (JBLU).
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