Looking ahead to the end of 2023 and the beginning of 2024, Delta Air Lines anticipates having something it hasn’t since the pandemic started: a good baseline of demand to plan against.
“Two years ago, we had Omicron, which ruined our first quarter; you couldn’t tell what the demand was going to be, looking back,” Delta President Glen Hauenstein said during the airline’s Investor Day. “This first quarter was really the first [with] stability, that we can now look back and base our decisions on where we’re going to place capacity and how we’re going to approach the market.”
The carrier raised its second quarter (Q2) and full-year revenue outlooks during its June 27 event, reporting robust demand continuing past the summer months. It now expects to end the year with revenues of $54 billion—up from $47 billion in 2019—projecting a 17-18% year-over-year growth in Q2 revenues and setting a goal to exceed revenues of $60 billion over the next several years.
“Travel is going gangbusters, it’s going to continue to go gangbusters because we still have an enormous amount of demand waiting,” CEO Ed Bastian said. He added, “This will be the top Q2 in our history, and we’ve got so much improvement to go.”
Noting continued “multi-year” supply constraints, executives detailed post-summer demand strength, with about 55% of its third quarter (Q3) bookings on hand now, a majority of which are for long-haul international travel. On the regional side of its business, Delta expects pilot training pipelines to begin to catch up with its hiring needs towards the end of 2024 and into 2025. Approximately 100 regional aircraft are “either grounded or suboptimized,” executives said.
Meanwhile, growth in premium cabin revenues “shows no signs of abating,” the carrier said, expecting it to account for 35% of total revenues by the end of the year, amounting to $19 billion, compared to $15 billion (32%) in 2019. The airline also described a demographic shift, with 35% growth in travel from millennials and younger, compared to 2019.
“I think many years back we had kind of a stodgy old-line view of what Delta’s brand was,” said Hauenstein. “We’ve really worked very hard to make it more attractive to the millennials and GenZ’s because we know that is the future … if we can get them young and we can keep them engaged with the brand, their lifetime value is going to be huge.”
Delta will report its Q2 earnings on July 13.
Related Content
