DAL - Valens Credit Report - 2021 03 09
Credit markets are materially overstating credit risk, with a cash bond YTW of 3.382% and CDS of 281bps relative to an Intrinsic YTW of 1.722% and an Intrinsic CDS of 101bpsIncentives Dictate Behavior™ analysis highlights positive signals for creditors. Specifically, DAL's compensation metrics should focus management on all three value drivers: asset efficiency, margins, and top-line growth, leading to Uniform ROA expansion and increased cash flows available to service obligations. Moreover, management has low change-in-control compensation, indicating they are not incentivized to pursue a sale or accept a buyout of the company, which combined with DAL's size, limits event risk for creditors
Earnings Call Forensics™ of the firm's Q3 2020 earnings call (11/16) highlights that management generated an excitement marker when saying that business travel will come back stronger than ever. Additionally, they are confident in their ability to rapid test travelers to return to international travel
Delta Air Lines provides scheduled air transportation for passengers and cargo. The company serves the Transatlantic, Transpacific and Latin America markets directly on the company and through joint ventures with airline partners. Internationally, the company has hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon. These arrangements are commercial joint ventures that include joint sales and marketing coordination, co-location of airport facilities and other commercial cooperation arrangements. The company has other businesses arising from its airline operations, including providing maintenance and engineering support for its regional aircraft.
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