Along with the February traffic numbers, Delta Air Lines (NYSE:DAL) reported a key stat returned to flat after an extended period of negative prints. The stock, though, shook off the improving trend with an initial decline due to the weak market.

At roughly $50, Delta Air Lines appears poised for a breakout to new highs. Is the positive data trend the key signal for new highs?

PRASM Is Key

The airline sector struggled massively over the last couple of years despite generating substantial profits. Lower oil prices helped reduce operating expenses, but it also lowered revenue metrics.

The market doesn’t like lower revenue metrics in this industry despite the fact Delta Air Lines and the other legacy airlines were flush with cash and repurchasing shares at a fast clip.

Enter the February traffic stats and Delta Air Lines has again reached passenger revenue per available seat mile (PRASM) of flat YoY after the slip in January. The key is the trend that is heading towards a positive for the rest of the year.

Delta produced the following monthly PRASM figures over the last eight months:

  • February 0.0%
  • January -2.5%
  • December 0.0%
  • November -1.0%
  • October -6.5%
  • September -3.0%
  • August -9.5%
  • July -7.0%

The market wants………………………READ MORE

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