As a Direct Challenge to Starlink, Amazon and Delta Are Teaming Up to Offer In-Flight Wi-Fi. Which Stock Will Benefit the Most?

Key Points

Amazon's partnership is one of its prominent large-scale deployments in satellite connectivity.

Starlink's massive satellite lead creates execution and competitive pressure for Amazon.

Delta benefits through stronger customer loyalty, but the financial upside remains indirect and gradual.

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Amazon (NASDAQ: AMZN) and Delta Air Lines (NYSE: DAL) are drawing attention after the two companies announced a partnership to bring satellite-based in-flight Wi-Fi to 500 of Delta's planes starting in 2028.

This move directly challenges SpaceX's Starlink, a satellite broadband network that uses thousands of low-Earth orbit satellites to deliver high-speed, low-latency internet globally.

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Amazon's own low-Earth orbit satellite network, Project Kuiper (also known as "Leo"), will power this rollout. Unlike a limited pilot project, the scale of this deployment provides Amazon with a prominent, large-scale real-world use case, while enabling Delta to deliver standardized, high-speed connectivity across a significant portion of its fleet.

Amazon is building a new revenue stream

This partnership, a second major deal after its deal with JetBlue, provides early validation for Amazon's multibillion-dollar satellite investment.

With more than 10,000 Starlink satellites already in orbit, SpaceX's network holds a significant scale advantage over emerging competitors. However, Amazon's satellite push is not a completely new business segment, but rather an extension of its broader infrastructure strategy spanning cloud, artificial intelligence (AI), and connectivity.

Delta has also already migrated nearly 600 applications to AWS since 2020, and adding connectivity further deepens the relationship.

Amazon, though, faces significant execution risk. The company has Federal Communications Commission (FCC) deployment deadlines that require roughly half of its satellite constellation be operational by July 30, 2026. The regulatory pressures intensified after FCC Chairman Brendan Carr publicly criticized Amazon's slow satellite deployment pace and urged the company to meet its rollout targets.

However, if Amazon executes well, Leo could become a robust new revenue stream. Unlike Delta, Amazon is taking on both the upside and the risk of building an entirely new business.

Delta gains customer loyalty

The successful execution of this deal will help strengthen Delta's customer engagement and retention.

However, the financial impact for Delta will remain indirect. Airlines operate amid volatile fuel prices and cost pressures. Hence, Wi-Fi is a non-core but strategic competitive differentiator rather than a primary revenue driver. Instead, ancillary revenue streams such as baggage fees and seat upgrades remain key monetization avenues. With fuel prices volatile due to geopolitical tensions, customer retention and pricing power are becoming increasingly important.

There is also a timing factor. While Amazon's satellite service is expected to begin commercial operations around 2026, Delta's large-scale rollout will begin in 2028. That gap reinforces that the benefits to Delta will play out gradually over time.

Which stock will benefit the most?

Amazon appears to be the bigger long-term winner, since it is effectively building a new business. On the other hand, Delta's gains are incremental.

Retail investors should expect this partnership to be less about immediate financial impact and more about long-term positioning. Amazon is expanding its addressable market and can see greater share price gains if execution remains on track.

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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.