Michael Boyd, president of Boyd Group, told CNBC’s “Squawk Box” that Delta Air Lines will be a “viable carrier” as it emerges from bankruptcy.
The company emerged from bankruptcy Monday after a 19-month reorganization. It rejected a hostile takeover by US Airways Group. On Thursday, Delta’s stock will trade under its old symbol, DAL, on the New York Stock Exchange.
“Delta, American, Northwest and Continental focused on adding international flights to their domestic market,” Boyd said Monday. “They’re not pulling out of domestic markets. But let’s remember that the name of the game not just cost, but revenue. Revenue stream is where the future is and Delta in the right position for that – international revenue streams plus domestic revenue driven by growth areas like Montgomery, Ala., Shreveport, La., and Erie, Pa.”
He said Delta has older, paid-for planes that can be parked if traffic declines, but the low-cost carriers have ordered a “bomber stream” of new planes that must fly at or near capacity to make money.
“Measured against its peers going forward, Delta is going to do very well,” Boyd said. “Airlines are dicey, but if you’re going to be in (the sector), I’d say Delta is going to be a pretty good move.”
Adjusted for inflation, he said the price of an airline ticket dropped about 50% between 1978 and 2005, but he doesn’t expect fares to continue to fall in the future.
“The air traffic control system is broken and you’ve got fuel (costs rising), so don’t look for overall fares to drop,” Boyd said.