Delta Air Lines (DAL.US) has once again drawn attention to its in-flight internet strategy. Elon Musk has warned that Delta Air Lines' decision to choose Amazon (AMZN.US) Leo instead of SpaceX (SPCX.US)'s Starlink could cost it a large number of customers. These remarks come as rival United Airlines (UAL.US) is expanding Starlink coverage across its fleet. Meanwhile, BMO Capital lowered its price target on Delta Air Lines, citing rising aviation fuel prices.

Musk Warns: Delta May Lose Customers Without Starlink

SpaceX CEO Musk responded to a post on X platform that highlighted the growing adoption of Starlink service on United Airlines aircraft. Musk wrote that Delta Air Lines "will lose a lot of customers," intensifying the debate over whether in-flight internet connectivity affects passengers' choice of airlines. According to the post Musk responded to, United Airlines has equipped over 600 aircraft with Starlink service, accounting for approximately 36% of its fleet. The airline expects Starlink service to cover its entire fleet by the end of 2027, making it easier for passengers to use high-speed internet during flights.

Delta Bets on Amazon Leo: In-Flight WiFi to Launch in 2028

Meanwhile, Delta Air Lines has chosen a different technology provider. The airline plans to launch WiFi powered by Amazon Leo starting in 2028, rather than using Starlink. This sharply different approach has put Delta Air Lines and United Airlines under stricter scrutiny, as airlines are competing around passenger experience beyond ticket prices and flight schedules. This year, turbulence across the aviation industry has intensified due to rising fuel costs, aircraft delivery delays, and spillover effects from the U.S.-Iran military conflict. These pressures have squeezed profit margins across the aviation industry, especially for airlines that rely on low-fare ticket sales. However, Delta Air Lines shares have risen 21% year-to-date, outperforming peers.

BMO Cuts Delta Price Target, Market Sentiment Remains Optimistic

As the in-flight internet battle intensifies, Delta Air Lines is also facing the challenge of rising operating costs. On Monday, BMO Capital analyst Michael Goldie lowered his price target on Delta Air Lines from $105 to $100, but maintained an "Outperform" rating. The new price target still implies 19% upside from the last closing price. Goldie noted that the ongoing conflict in the Middle East is one of the factors driving aviation fuel prices to $4.30 to $4.50 per gallon, a level close to spring highs. BMO said that meanwhile, demand across different passenger groups remains resilient, allowing airlines to continue raising ticket prices, although the pace of increases has slowed compared to April and May. On Stocktwits, retail sentiment on Delta Air Lines shifted from "neutral" the previous day to "bullish." Despite BMO's price target cut, TipRanks data shows that Wall Street analysts overall still give Delta Air Lines a "Strong Buy" rating, with an average price target of $106.78, representing 27% upside from the latest closing price.