Delta Air Lines (DAL.US) chooses Amazon Leo over Starlink for in-flight WiFi; Elon Musk warns of losing a large number of customers

According to Jinse Finance, Delta Air Lines (DAL.US)'s in-flight internet strategy is once again in the spotlight. Elon Musk has warned that Delta could lose a large number of customers by choosing Amazon (AMZN.US) Leo over SpaceX (SPCX.US) Starlink. His comments come as rival United Airlines (UAL.US) expands Starlink coverage across its fleet. Meanwhile, BMO Capital has lowered Delta’s price target citing rising aviation fuel costs.

Musk warns: Delta may lose customers for not using Starlink

SpaceX CEO Elon Musk responded to a post on X that highlighted the growing prevalence of Starlink service on United Airlines aircraft.

Musk wrote that Delta Air Lines “will lose a lot of customers,” intensifying the debate on whether in-flight connectivity will influence travelers’ choices of airlines.

According to the post Musk replied to, United has already equipped Starlink on more than 600 planes, accounting for about 36% of its fleet. The airline expects Starlink to cover its entire fleet by the end of 2027, allowing passengers to access high-speed internet with ease during flights.

Delta bets on Amazon Leo: In-flight WiFi to launch in 2028

Meanwhile, Delta has opted for a different technology provider. The airline plans to roll out Amazon Leo-powered WiFi starting in 2028 rather than using Starlink. This distinct approach has put both Delta and United under greater scrutiny, as airlines now compete on passenger experience beyond just ticket prices and flight schedules.

This year, turbulence for the entire airline industry has intensified, driven by rising fuel costs, aircraft delivery delays, and spillover effects from U.S.-Iranian military conflicts. These pressures have squeezed profit margins across the sector, especially for airlines reliant on low-fare ticket sales.

Nonetheless, Delta shares have risen 21% so far this year, outperforming peers.

BMO lowers Delta’s target price, but market sentiment remains upbeat

Amid the growing in-flight internet rivalry, Delta also faces the challenge of rising operating costs. On Monday, BMO Capital analyst Michael Guldie lowered Delta's price target from $105 to $100, while maintaining an “outperform” rating. The new target still implies a 19% upside from the last closing price.

Guldie pointed out that ongoing conflict in the Middle East is one of the factors driving aviation fuel prices up to $4.30–$4.50 per gallon, a level close to springtime highs. BMO noted that at the same time, demand from different traveler groups remains resilient, allowing airlines to continue raising ticket prices, though the pace of increases has slowed compared with April and May.

On Stocktwits, retail sentiment toward Delta shifted from “neutral” the previous day to “bullish.”

Despite the lowered target, TipRanks data shows Wall Street analysts overall still rate Delta a “strong buy,” with an average target price of $106.78, 27% above the latest closing price.