Delta Air Lines jets are seen on a taxiway at Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia, U.S. December 22, 2021.
Elijah Nouvelage | Reuters
Because Delta Airlines, the situation of Covid is not as bad as it could be. Its outlook on Thursday is published alongside its Q4 2021 earnings report call for profit about $400 million in the second half of the year, and CEO Ed Bastian noted that would make Delta “the only major U.S. airline to turn a profit in the second half of the year.”
Delta still expects a loss in the first quarter, but Q1 was the only loss for 2022. “We’re confident we’ll generate a meaningful profit for full 2022 as the recovery continues. continued and accelerated during the spring and summer,” said Bastian earnings call.
Investors are now more confident compared to what they did in the spring of 2020 in terms of aeronautics, and Delta is feeling good enough – even amid difficult public health and staffing conditions – that they announced the payment Special profit sharing for all global employees will be paid on February 14th, $1,250.
Delta says there’s a silver layer in the omicron that hits what’s typically a less-booking season, and by the time this Covid wave is over – if it progresses as predicted faster than previous waves – there will be plenty of time for new developments. leisure travelers. Summer plans are delayed to still book vacations.
Going on a business trip is another matter, but Delta doesn’t see it the death of business travel – predicted by many at various times during the pandemic – is now more likely, even if omicrons push back the recovery a bit.
Just before its capital markets day in mid-December and just before the earnings call, the airline surveyed corporate customers. “And what we’ve seen is the percentage of customers who thought in the first quarter that they would be traveling with or more of them was down slightly. Glen Hauenstein, president of Delta Air Lines, said in the first quarter compared with the fourth quarter,” said Glen Hauenstein, president of Delta Air Lines. “The reopening of the office has been pushed out, as you know.”
However, he expects that in the spring and summer, demand for business travel will increase sharply “when people return to their normal routine and feel safe when traveling.”
Bastian describes business travel as “kind of wait and see. They’re trying to understand what’s going on with the omicron. They’re trying to understand when their offices – if they don’t come back, when will they open up. door . “
But as the omicron wave peaks in various parts of the country and declines in some places, Bastian said company executives are feeling more encouraged “that they’ll be able to come back.” and engage its people, opening offices earlier than they might have thought when the first news about omicron came in.”
Delta Air Lines saw growth in business travel in the fourth quarter, not only for the largest corporations but also for small businesses, which is an area of travel that Delta will focus on. into more.
“Small business … is something that we haven’t talked about much historically, but it’s just a big corporation because of the corporate space for us,” says Bastian. “And then when those offices open, starting this spring, we think it’ll pick up where we left off in December and grow from there.”
The airline found a correlation between office reopening and business travel.
“A lot of business travel is triggered by visiting companies, and companies have closed,” says Bastian. That makes it a little bit more difficult to do that. “It’s not a one-for-one. But the fact is, especially for large companies, the fact that the overall level of our business demand, returns on volume is actually pretty closely correlated. And whether it’s a coincidence or not, I don’t know. But the numbers correlate closely with the number of reopenings we’ve seen, suggesting there’s a real causality there.”
Delta CEO emphasized that The office isn’t the only factor in business travel. “We have a lot of people who are traveling and have yet to return to the office,” says Bastian.
But he suggested there was “a lot of noise” in the numbers due to the fact that the airline had “navigate in the process … like two or three pandemics throughout 2021 with different variations. “
“The good news is that all of our companies say they can’t wait to get back to the people and be with their own people, stay with their customers, visit new opportunities and invest in the future. And I think this is going to be a strong spring and summer,” said Bastian. “They’re just waiting for a clear indication that you don’t have to worry about a variation when you’re traveling.”
Delta has generated a domestic stock return on the corporate side of its business during the pandemic, “a significant and superior stock return,” according to Bastian, primarily, according to Bastian. is one of the largest companies focusing on premium booking. “They appreciate the work we’ve done around blocking the middle seats for the length of the pandemic while it’s been pretty active,” he said.
“We have reached a plateau at pre-pandemic levels, and we are having a significantly higher market share than our native market share in those markets,” said Bastian. “I think we’re going to work hard to make sure we maintain it. And if we can grow it, we will.”
However, Delta’s CEO said the type of additional market share growth they’ve seen during the pandemic cannot sustain over the next few years.
Follow Hauenstein, with what he describes as “big plans for our long-distance high-end entertainment.”
The new product, Delta Premium Select, will be available throughout the transatlantic market and it is designed for both high-end leisure travelers and businesses whose travel policies do not include Delta One products. flat bed.
“The early returns from that were phenomenal, far exceeding our expectations,” says Hauenstein.
