Here's Why Investors Should Hold on to Delta Air Lines Stock Now

Core Viewpoint - Delta Air Lines is experiencing strong air travel demand, which is positively impacting its revenue, but the company faces challenges with liquidity and rising operating expenses [1][5]. Group 1: Factors Favoring Delta - Delta's revenue is supported by increased passenger volumes, with an 8% year-over-year capacity increase in Q2 2024 and projected growth of 5% to 6% for the September quarter [2]. - Corporate travel demand is robust, with 90% of surveyed companies expecting stable or increased travel volumes in the upcoming quarter [2]. - The airline has expanded its fleet, delivering 11 new aircraft in Q2 2024, totaling 18 for the year, and has formed a strategic partnership with Riyadh Air to enhance connectivity [3]. Group 2: Shareholder Returns - Delta has increased its quarterly dividend by 50% to 15 cents per share, marking its first dividend increase since resuming payments post-COVID-19 [4]. - The stock has appreciated by 4.3% over the past six months, outperforming the industry average growth of 1.2% [4]. Group 3: Key Risks - Rising operating expenses, particularly labor costs, are negatively affecting Delta's profitability, with labor costs increasing by 10% year-over-year to $4 billion in Q2 2024 [5][6]. - Delta's current ratio stands at 0.40, indicating liquidity concerns as it suggests insufficient cash to meet short-term obligations [6].