Delta offers rare shelter from Boeing’s plane production crisis

This is set to be a record-breaking year for air travel. Some 4.7b people are expected to take to the skies in 2024, according to the IATA. That is 200mn more than the pre-pandemic high set in 2019. Recovery in business travel is underpinning demand. So is consumer desire to make up for missed trips. This should be good news for airlines. But problems at Boeing mean that not every carrier will benefit equally. Regulators have placed a cap on Boeing’s production capacity following the harrowing mid-air panel blowout on an Alaska Airlines flight in January. This in turn means delivery delays. Some airlines will not have enough planes to meet demand for the peak summer travel season. Delta Air Lines is the notable outlier. It is the top performing US airline stock over the past year. Among big US carriers, it appears to be the least affected by Boeing’s production and delivery issues. The Atlanta-based airline does not operate any Boeing 737 Max jets. Its order of new 737 Max 10 jets, originally slated to be delivered in 2025, is expected to be delayed by a year or two. But Delta says that deliveries from Airbus will fill the gap. By contrast, rival United Airlines is asking its pilots to take unpaid time off because of the plane shortage. For Delta, the result is record first-quarter revenues and forecasts for another strong showing for the second quarter. It plans to expand flying capacity by 6 to 7% this quarter as it reaps the benefit of a focus on international travel and the push to sell more premium-cabin seats.  Delta’s share price, up 38% over the past 12 months, has vastly outperformed its peers.<br/>