Delta Air Lines aims to usher in lasting business model change with new shareholder rewards

Delta Air Lines' scheme to return USD1 billion to shareholders during the next three years is the latest example of how the carrier is widening the competitive distance as its merger with Northwest Airlines is essentially done and dusted. The airline unveiled its plans for shareholder returns after months of prodding by investors that have watched Delta pare down its debt, keep capital spending costs in line and generate solid free cash flow.

At the same time the carrier has set new debt reduction targets, it hopes all its efforts to get its financial house in order will lay the groundwork to achieve investment grade status, something Delta admits it will not attain anytime in the near future.

Through its latest moves Delta is also attempting to prove that the newfound stability in the US airline business has staying power after a decade of bankruptcies and economic turmoil have forced airlines to undergo a major reset.