Prediction: Delta Air Lines Stock Will Soar Over the Next Few Years. Here's 1 Reason Why.

Core Viewpoint - The trade war initiated by President Donald Trump is negatively impacting airlines in the short term, but stocks like Delta Air Lines are expected to appreciate significantly in the long term due to their resiliency [1]. Industry Dynamics - The airline industry is cyclical, with demand fluctuating based on economic conditions; during economic booms, travel spending increases, while downturns lead to reduced spending [2]. - Airlines have historically been slow to adjust to demand changes, maintaining routes and flight volumes until the next economic upturn [2]. Company Adaptability - Airlines, particularly Delta and United, have become more disciplined in managing capacity, reducing unnecessary routes and flights in response to demand dips and overcapacity situations [3]. - Delta and United have announced plans to scale back capacity growth for 2025 due to the slowdown in travel linked to tariff-related uncertainties and the trade war [3][4]. Revenue Diversification - Delta and United have made significant strides in diversifying their revenue streams beyond main cabin flights, which has proven beneficial; Delta's first-quarter earnings showed a 1% decline in main cabin passenger revenue to $5.4 billion, while premium products revenue increased by 7$4.7 billion [5]. - Loyalty-related revenue for Delta rose by 11% to $940 million, highlighting the strength of its SkyMiles program and co-branded credit cards with American Express [5]. Resiliency and Valuation - Despite potential worsening conditions and further demand declines, Delta has shown resiliency and adaptability, which should mitigate downside risks [7]. - The current valuation of Delta suggests significant long-term upside potential for the stock [7].