Delta Air Lines: Navigating Turbulence with Phill Gross’s Strategic Vision
7min read In an era of geopolitical tension and market volatility, delta air lines (NYSE: DAL) has emerged as a standout pick among Phill Gross’s 2025 stock selections, promising robust upside potential. Gross, co-founder of Adage Capital Management—a $57.2 billion firm with a 15-year track record of outperforming benchmarks—has long prioritized companies with resilient business models and undervalued assets. Delta’s inclusion in his portfolio reflects its ability to thrive amid headwinds, from trade wars to shifting consumer preferences. Here’s why investors should pay attention.
Phill Gross: The Billionaire’s Blueprint for Value
Phill Gross’s career is defined by disciplined, fundamentals-driven investing. As co-founder of Adage Capital, he focuses on strategic undervaluation and operational excellence, traits that Delta embodies. Gross’s Q4 2024 13F filings reveal a portfolio skewed toward stocks like ConocoPhillips (COP) and Disney (DIS), which share Delta’s profile: stable cash flows, diversified revenue streams, and pricing power. For instance, Adage’s $428 million stake in COP targets a 34.9% upside, while Disney’s $205 million position aims for 37.9% gains. Delta’s inclusion aligns with this strategy, leveraging its low price-to-earnings (P/E) ratio and $5.4 billion in main cabin revenue as anchors for growth.
Delta’s Resilience in a Volatile Landscape
Delta’s 2025 performance underscores Gross’s thesis. Despite tariffs and trade wars dampening demand, the airline has cut 2025 capacity growth and leaned into premium services to offset revenue slumps. First-quarter results highlighted:
- Premium products revenue rose 7% YoY to $4.7 billion, driven by business class and premium seating.
- Loyalty-related revenue jumped 11% to $940 million, fueled by its SkyMiles program and Amex co-branded cards.
- Main cabin passenger revenue dipped 1%, but this was mitigated by gains elsewhere.
Delta’s stock closed at $58.45 on March 3, 2025, and rose 6.55% by early May, outperforming rivals like United Airlines (UAL) and American Airlines (AAL). Gross’s focus on undervalued equities is evident here: Delta’s P/E ratio of 12.5 trails peers’ averages, signaling potential for revaluation.
Innovation as a Catalyst
Delta’s strategic partnerships amplify its long-term appeal. Its investment in JetZero, a startup developing blended-wing aircraft that could slash fuel costs by 50%, positions it to dominate post-pandemic efficiency demands. JetZero’s $235 million U.S. Air Force contract and Adage-backed backing underscore its credibility. For an airline industry historically challenged by fuel volatility, this technology could be transformative.
Risks on the Horizon
No investment is risk-free. Delta faces headwinds like:
- Trade war uncertainty: Tariffs could prolong demand slumps in key markets.
- Geopolitical disruptions: Halted flights to Israel in early 2025 highlight external volatility.
Yet, Delta’s diversified global network and cost discipline—evident in its $0.15/quarter dividend (a 0.26% yield, signaling financial health)—mitigate these risks.
The Bottom Line: A Multiyear Growth Story
Delta’s fundamentals align with Gross’s long-term focus. With a 6.55% stock gain in early 2025, a $428 million Adage stake, and partnerships in next-gen aviation tech, the airline is primed for sustained growth. Analysts project a 10%+ return over the next decade, buoyed by its undervalued status and adaptive strategy.
For investors seeking stability in the airline sector, Delta offers a compelling mix of value, diversification, and innovation-driven upside. As Gross’s track record attests, this is a stock built to weather turbulence—and soar when skies clear.
Data as of May 2025. Past performance does not guarantee future results.
