Citi Is Betting on a ‘Super Cycle’ in Airline Stocks. Here’s the Top-Rated Name to Buy Now.

Industry Overview - The airline sector is experiencing tightening conditions due to a 10% cut in flight capacity mandated by the FAA across 40 major U.S. airports, impacting domestic air cargo space and logistics operations [1] - Although the FAA has eased some restrictions, investigations into potential violations are ongoing, and air traffic controller shortages remain a concern [1] Company Insights - Citigroup anticipates a "Supermajors Super-Cycle" for airline stocks, suggesting a favorable period for demand, pricing, and margins for the largest carriers [2] - Delta Air Lines (DAL) is highlighted as a key player, with expectations for 2026 to be pivotal as it leverages scale and loyalty economics [3] - DAL recently projected a $200 million impact from government shutdown-related schedule disruptions, yet core travel demand remains robust, supporting the supercycle thesis [4] Financial Performance - Delta Air Lines currently offers a forward annual dividend of $0.75 per share, yielding approximately 1.15%, with the stock priced at $67.68, reflecting a 12% increase year-to-date and a 9% increase over the past 52 weeks [5] - The company's market capitalization is around $44 billion, with a forward price-to-earnings ratio of 10.96x, significantly lower than the sector median of 20.52x, indicating a discount for earnings expected to grow in line with or better than the broader group [6] - In the most recent quarter, Delta reported September sales of $16.673 billion, a slight increase of 0.15%, indicating revenue stability at a high base despite adjustments in capacity and mix [7]