When it comes to many of the names in the airline sector, one of the first things I look for is a company’s ability to demonstrate improved traffic on a month-over-month basis. With that said, I wanted to take a brief look at the recent consolidated passenger unit revenue at Delta Airlines DAL and also note a number of reasons behind my bullish stance on the company’s stock.

Company Overview

Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo worldwide. Its route network comprises various gateway airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle, and Tokyo-Narita. The company sells its tickets through various distribution channels, including telephone reservations, delta.com, traditional brick and mortar, and online travel agencies.

Performance & Trend Behavior

As of Wednesday's close, shares of DAL, which have risen just over 27.5% on a year-to-date basis, possess a market cap of $29.42 billion, a forward P/E ratio of 9.05, and a dividend yield of 1.03% ($0.36). Based on their closing price of $34.90/share, shares of DAL are trading 8.69% below their 20-day simple moving average, 8.97% below their 50-day simple moving average, and 1.89% below their 200-day simple moving average.

Based on their recent trends these numbers indicate both a short and a long term downtrend for the stock, which generally translates into a selling mode for most near-term traders and many long-term investors. With that said, I strongly believe we could see both its trend behavior and share price improve in wake of its most recent traffic-related numbers.

A Brief Look at Delta’s September Traffic

On Thursday, October 2, Delta Airlines released its traffic-related performance for September. Included in that release were a 2% increase in its consolidated passenger unit revenue, a 5.4% increase revenue passenger miles and a 40 bps increase in the carrier’s load factor, which currently stands at 83.7%. As long as Delta can continue to demonstrate strong traffic-related performance through the end of 2014, there’s a very good chance full-year earnings growth could come in at-or-above analysts’ forecasts.

Conclusion

If Delta Airlines can continue to successfully enhance its monthly traffic performance over the next few months, then I strongly believe that not only will its recent trend behavior continue to improve, but its full year earnings for both 2014 (in which analysts are calling for the company to earn $3.22/share on revenue of $40.21 billion) and 2015 (in which analysts are calling for the company to earn $3.85/share on revenue of $42.18 billion) should have no problem surpassing analysts’ expectations.