DAL vs. AAL: Which Airline Stock Looks More Promising Now?

Core Insights - Delta Air Lines (DAL) and American Airlines (AAL) are major players in the airline industry, with Delta being a member of the SkyTeam alliance and American Airlines part of the oneworld alliance [1][2] - Delta has shown strong international travel demand and diversified revenue streams, leading to better-than-expected earnings and revenue growth [3][4] - American Airlines has projected earnings per share for the fourth quarter of 2025 to be between 45 cents, with total revenues expected to increase by 3-5% [9][10] Delta Air Lines (DAL) - Delta reported strong earnings in Q3 2025, maintaining an excellent earnings surprise record with an average beat of over 8% [4] - The company expects adjusted revenue growth of 2-4% in Q4 2024 and full-year earnings guidance of $6 per share, which is at the upper half of the previous range [5] - Delta's operations were briefly disrupted by a government shutdown, but flights have returned to normal, which is beneficial for the upcoming holiday season [7][10] - The company has increased its quarterly dividend payout by 25%, marking its second increase since resuming dividends post-COVID [8] - Delta's stock has outperformed both the industry and American Airlines, gaining in double digits over the past six months [16][20] American Airlines (AAL) - AAL's management projected earnings per share for Q4 2025 to be between 65 cents and 95 cents, with total revenues expected to rise by 3-5% [9][10] - AAL has maintained an earnings surprise record with an average beat of over 26% despite incurring a narrower-than-expected loss in Q3 2025 [11] - The company's debt burden was $10.6 billion at the end of Q3 2025, resulting in a debt-to-capitalization ratio exceeding 100%, which is a significant concern for shareholders [12][14] - Increased labor costs, driven by a deal with pilots, have negatively impacted AAL's bottom line, with salaries and benefits rising by 9.9% in 2024 [14] - AAL does not offer dividends, which may make it less attractive to investors seeking consistent income [20][21]