The Bull Case For Delta Air Lines (DAL) Could Change Following Order to End Aeromexico Partnership

• In mid-September 2025, the U.S. Department of Transportation ordered Delta Air Lines and Aeromexico to dissolve their nearly decade-long joint venture, introducing uncertainty to Delta's international strategy, particularly for U.S.-Mexico routes.
• This regulatory development came at a time when Delta was actively pursuing growth initiatives such as new non-stop routes and sustainability efforts, underscoring the complex environment in which the airline operates.
• We'll now explore how this regulatory setback affecting Delta's international partnerships could impact the company's long-term investment narrative and risk profile.

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Delta Air Lines Investment Narrative Recap

To be a shareholder in Delta Air Lines today, you need to believe in the company's ability to manage through regulatory headwinds, sustain premium and international revenue streams, and protect margins via disciplined capacity management. The recent order to dissolve the Delta-Aeromexico joint venture directly affects Delta's international growth strategy and introduces risk to its key cross-border routes; this could weigh on the company's most important near-term catalyst, which is its ability to offset softness in domestic demand with international and premium growth. The biggest risk to the business remains a potential slowdown in main cabin travel or broader economic weakness, which could pressure revenue and margins beyond the impact of regulatory events. Among Delta’s newest announcements, the launch of a non-stop flight from JFK to Malta is most relevant to the international strategy conversation. While this move highlights the airline’s push to expand its international footprint, it coincides with fresh regulatory scrutiny on partnerships, underscoring how efforts to find new growth routes must repeatedly adjust to a complex global regulatory environment. In contrast, another risk investors should be aware of is the growing competitive pressure from low-cost carriers, which could...

Read the full narrative on Delta Air Lines (it's free!)

Delta Air Lines' narrative projects $68.4 billion revenue and $4.6 billion earnings by 2028. This requires 3.4% yearly revenue growth and a $0.1 billion earnings increase from $4.5 billion today.

Uncover how Delta Air Lines' forecasts yield a $69.66 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community for Delta range from US$39.88 to US$80.04, demonstrating wide opinion spread. With international route access now less certain, the ability to sustain premium revenue streams could shape future results, explore diverse outlooks within the community.

Explore 8 other fair value estimates on Delta Air Lines - why the stock might be worth 32% less than the current price!

Build Your Own Delta Air Lines Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Delta Air Lines research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Delta Air Lines research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Delta Air Lines' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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