The Delta Air Lines Inc. (DAL) has started talks with the U.S. authorities to lift limits on the number of routes where passengers would be checked only for COVID-19 (without observing the 2-week isolation period). Long before the findings of the experiment were summed up, the potential extension of the program was revealed. Delta currently operates only one non-quarantine path to Amsterdam from Atlanta with a frequency of twice a week.
The nature of the innovation is that three checks are passed by customers: one key test a couple of days before departure, then an express test right before the flight and another after landing. The first flight took place on Tuesday, and only at the end of January will data be obtained on the success of the system. Delta counts on success, however and hopes to get more flight slots in advance, where the quarantine will not be followed.
The company’s experiment is not the only one of its kind in the United States, but the first one. Flights between Singapore and Hong Kong and between Australia and New Zealand are currently operating in a similar manner. We’re mainly concerned about travelers in business class. Delta assumes that as vaccination increases, the tests will become obsolete, but they can be used to restart international traffic faster than if you wait for the complete removal of restrictions.
After the news, Delta Air Lines Inc. (DAL) shares grew in the pre-market on Wednesday but concluded the trading at loss of -1.84%. The company’s shares dropped marginally below their fair prices. The launches of quarantine-free flights will not in our view, be an influential advantage over other airlines, but the experience gained will allow Delta to cope quickly with overlaps in the first months following the lifting of flight restrictions. For many more years in a row, local outbreaks of COVID-19 could occur, which will make it difficult for air carriers to get out of downtime. Delta will perform better than other businesses under these conditions, and thus the shares can rise faster. We suggest purchasing these shares in the range of $37-38 per share if the price fells further.