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Delta (DAL) to Keep Middle Seats Vacant Through Mar 30, 2021

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Shares of Delta Air Lines (DAL - Free Report) have declined 15.9% since the beginning of March compared with its industry’s 8.4% decrease.

The disappointing price performance is due to the havoc wreaked by coronavirus on the aviation space. With air-travel demand plummeting due to the pandemic, passenger revenues at Delta plunged 68% in the first nine months of 2020. Notably, Delta incurred a loss in each of the first three quarters of 2020.

To encourage people to resort to air travel, airlines including Delta, currently carrying a Zacks Rank #4 (Sell), have been keeping their middle seats vacant. In line with its focus on safety, the carrier recently announced that it will continue to block the middle seats on its flights through Mar 30, 2021. Previously, Delta had blocked middle seats until Jan 6, 2021.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The move sets Delta apart from other airline players, most of which either aim to do away with blocking the middle seats much earlier or already lifted the protocol. Southwest Airlines (LUV - Free Report) decided not to block the middle seats onboard post Nov 30, 2020. Notably, blocked middle seats induced a substantial loss of revenues for this Dallas-based carrier in the September quarter. Meanwhile, management at JetBlue Airways (JBLU - Free Report) no longer guarantees that the middle or adjacent seats will be left unoccupied. JetBlue will operate its flights at full capacity from Jan 8, 2021. American Airlines (AAL - Free Report) has already been operating flights at 100% capacity since July.

Per a Reuters report, Delta is pinning hopes on people’s willingness to pay more for extra space. This will help the carrier make up for the revenues lost by blocking the middle seats. According to Delta’s chief customer experience officer Bill Lentsch, “Some customers are still learning to live with this virus and desire extra space for their peace of mind”. However, only time will tell whether Delta’s policy of blocking the middle seats and aim for premium revenues pay off.

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