Delta Air Lines’ second-quarter business travel revenue increased year over year, primarily driven by international demand, Delta president Glen Hauenstein said during a Thursday earnings call.
“International passenger revenue grew 61 percent, led by the transatlantic and Latin America [regions],” Hauenstein said. “On corporate, we expect steady improvement in demand. Our recent corporate survey shows businesses expect to increase travel in the second half, with several of the least-recovered sectors conveying optimism for increased travel in the fall.”
That survey of Delta’s corporate clients showed 93 percent expect their travel will increase or stay the same sequentially in the third quarter, according to the carrier. That finding has been baked into Delta’s third-quarter outlook.
“We have a continued slow and steady build in our guide,” Hauenstein said. “If it was to accelerate beyond what it’s been doing, that would be upside.”
Hauenstein added that as Delta CEO Ed Bastian previously has stated, the propensity for corporates to travel is directly related to whether employees have returned to offices. “We see more and more offices trying to reopen or reopening and corporations trying to get people back in the office,” he said. “I think that’s a great constructive backdrop for us as we head into the fall and the post-Labor Day period.”
Bastian noted, however, that the comparisons for corporate travel “unfortunately are still all made to 2019, and we lose sight of the fact that our economy is 20 percent plus or minus larger than it was in 2019,” he said. “So what you’re talking about actually is there is a lot of room to improve for Corporate America on travel. And I think that’s part of the underpinning why we think you’re going to continue to see some steady improvement here this fall, and you’re hearing it from the travel managers as well.”
Delta Q2 Performance
Delta reported record revenue and profitability for the second quarter. Total revenue was $15.6 billion, representing a 13 percent increase year over year. Quarterly passenger revenue was $13.2 billion, up 21 percent from a year prior. Net income was $1.8 billion compared with $735 million in Q2 2022. Average fuel costs were down one-third from last year to $2.52 per gallon for the quarter.
Second-quarter domestic revenue was $8.9 billion, up 8 percent year over year. The Atlantic region reported $2.8 billion in revenue, up 65 percent from Q2 2022, while Latin America had revenue of $926 million, a 24 percent year-over-year increase.
Third-quarter guidance includes an 11 percent to 14 percent year-over-year increase in revenue, with an average price of fuel of $2.50 to $2.70 per gallon, according to Delta CFO Daniel Janki. The full-year revenue outlook is for a year-over-year increase of 17 percent to 20 percent.
