Business travel at Delta Air Lines is surging, exceeding expectations with “mid-teens” growth, according to a Thursday (July 11) Q2 earnings transcript.
Delta President Glen Hauenstein said during the call that Delta benefited from double-digit volume growth in this high-value segment with broad demand and growth across all sectors. He noted that the company’s premium tier continued to perform (10% year-over-year increase) admirably and helped differentiate the airline’s results.
“We have runway ahead as we continue adding more premium seats to our aircraft, improving our retailing capabilities and further segmenting our products,” Hauenstein said.
Delta CEO Ed Bastian said business travelers choose Delta because of its focus on overall reliability and service, which they believe creates a superior experience compared to competitors. That experience, Bastian said, is what sets Delta apart.
“That’s why business travelers choose Delta,” he said. “That’s why we have the opportunities internationally that we do. That’s why American Express, the top credit card provider in the world, in my opinion, chooses Delta as their exclusive partner.”
Loyalty has also exceeded expectations, with revenue up 8% as Delta’s SkyMiles member base continues to expand, evidenced by about 30% of active members carrying a Delta SkyMiles American Express credit card in their wallets.
Looking forward, Hauenstein said travel demand remains strong. PYMNTS own research confirms that prediction, expecting business travel to see an uptick in the second half of the year.
“Our core customer base is healthy, and demand for premium products continues to outperform the main cabin,” he added. “We expect the strong growth in business travel to continue, with 90% of companies in our recent corporate survey saying they intend to maintain or increase travel volumes in the back half of the year.”
Delta noted a new record in its June quarter revenue of $15.4 billion, rising 5.4% year over year. Delta predicts a September quarter capacity growth of between 5%-6%, with revenue growth between 2%-4%.
International passenger revenue rose 4% from the same period last year. Demand for flights across the transatlantic remains strong, with unit revenue in line with last year’s record performance, excluding the impact from the Summer Olympics in Paris.
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