Delta Air Lines on Wednesday painted a stark picture of increasing business travel demand, noting “sustained acceleration” of corporate sales and expressing optimism for continued growth throughout 2024, executives said during the carrier’s quarterly earnings call.
First-quarter managed corporate sales—tickets sold to contracted corporate customers—increased 14 percent year over year, “with technology, consumer services and financial services leading that momentum,” Delta president Glen Hauenstein said.
“The outlook for corporate travel is positive,” Hauenstein added. “Ninety percent of companies in our recent survey intend to maintain or increase travel volumes in 2Q, putting us back on track to deliver record corporate revenues in the back half of this year.”
Hauenstein later added he was “really encouraged by what we see in terms of corporate bookings as we look forward through this quarter and as we look forward into the next couple of quarters.”
Aeromexico Appeal
Meanwhile, Delta has “engaged” with the U.S. government about the January tentative decision by the Department of Transportation to dismiss the renewal of the antitrust immunity between the carrier and Aeromexico, which allows the carriers to operate a joint venture, effective in October.
“We are currently engaged with the administration and discussing, I’ll say, less punitive solutions than the tentative order that was proposed,” Delta executive vice president of external affairs Peter Carter said during the call.
“We’ve had hundreds of our allies with respect to the connection between Mexico and America weigh in, in support of this joint venture,” Carter continued. “We think this is going to take some time before the DOT issues a final order, a number of months, but we’re cautiously optimistic that they are going to come up with a better solution.”
DOT in January cited a reduction in capacity at Benito Juárez International Airport in Mexico City as well as the Mexican government’s shift of cargo operations away from the airport as part of the rationale to deny the ATI renewal. Delta and Aeromexico appealed DOT’s decision in February.
Q1 Metrics
Delta reported first-quarter passenger revenue of $11.1 billion, up 7 percent year over year, and total revenue of more than $13.4 billion, up 8 percent.
The carrier posted first-quarter net income of $37 million, compared with a loss of $363 million one year prior.
Overall first-quarter capacity increased 6.8 percent year over year, led by growth on transpacific and Latin American routes. Capacity on domestic U.S. and transatlantic routes each grew 2 percent. Delta projects overall second-quarter capacity to increase 6 percent to 7 percent.
Delta said its average first-quarter fuel price was $2.79 per gallon, above the range of $2.50 to $2.70 it forecast the prior quarter. Its projected Q2 fuel cost is $2.70 to $2.90 per gallon.
The carrier projected second-quarter revenue of $15.3 billion to $15.6 billion, which would represent a year-over-year increase of 5 percent to 7 percent.
