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American, Delta and United's varying approaches to shareholder rewards & balance sheet management

The three large US global network airlines – American, Delta and United – are all at different phases of their respective balance sheet evolutions. Delta is enjoying its newly minted status of reaching investment grade according to two ratings agencies; United has decided to expand its level of shareholder returns after lagging its peers in that metric during its still ongoing merger integration. Even after recently deferring some Airbus widebody orders, American remains in the middle of a significant fleet revamp. The company is also still completing certain facets of its merger integration with US Airways, which is one driver for American’s larger cash balances compared with its global network peers.

Each of the three airlines seems to be striving for the right balance of investment in their businesses – maintaining a robust balance sheet and delivering ample shareholder returns. The difference is in the strategies followed.

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