Delta Air Lines, Inc. (DAL): How to Invest in Air Travel Without Buying Airlines

A strong increase in earnings is expected from analysts based around the increase in consumer demand feeding the sales of both airlines and rental car companies. The merger comparison is also fitting since the reduction in competition and increase in economies of scale can be felt in both industries. In 2008, Delta Air Lines, Inc. (NYSE:DAL) became the world’s largest airline after acquiring recently reorganized Northwest Airlines in the wave of airline mergers that followed that of the rental car industry.

Air travel gains

The rental car industry is not a pure play on air travel since so many rentals are done independently of airline passengers, but it is one of the closest tied industries to the airline business. I am bullish on a rebound in air travel and hold Delta Air Lines, Inc. (NYSE:DAL) as my position in this play, but with the airline I also realize that many of the risks associated with the turbulent airline business still exist including fuel, labor, and economic problems. Investors bullish on air travel but wanting to assume less of these risks may be interested in Hertz or Avis Budget Group Inc. (NASDAQ:CAR).

The article How to Invest in Air Travel Without Buying Airlines originally appeared on Fool.com and is written by Alexander MacLennan.

Alexander MacLennan owns shares of Delta Air Lines. The Motley Fool owns shares of Hertz Global Holdings. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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