Delta Air Lines expects second quarter revenue to be completely recovered versus 2019 levels as air travel demand snaps back faster than anticipated and the airline continues to raise ticket prices.
“Recovery is exceeding my expectations,” chief executive Ed Bastian told an industry conference on Wednesday. “Demand is off the charts” and there is “a lot of pricing momentum”.
The updated guidance came even though Delta admitted the level of seats available for sale was only 82 per cent of what it was pre-pandemic. Last week, the carrier cut its summer flying plans.
The airline industry has struggled operationally as demand surges amid staffing shortages at airlines and airports, as well as inclement weather.
Thousands of US flights were cancelled over the Memorial day holiday weekend, with Delta the most-affected major domestic carrier. “This weekend was disappointing,” said Bastian.
“The only thing we can do in this environment in order to protect seats and protect inventory is pricing . . . or else we’d sell everything out,” he said.
Ticket pricing for this summer is expected to be 25 per cent to 30 per cent higher, on average, than 2019, a scale Bastian said Delta has never experienced.
The Atlanta-based carrier also raised cost forecasts for the June quarter, which will be up 20 per cent to 22 per cent for non-fuel expenses compared with 2019, and increased its expectations for fuel prices.
United Airlines, Southwest Airlines, and JetBlue Airways all recently raised their second quarter revenue guidance as well.
In good news for Boeing, Bastian said Delta is “trying to get a deal done” for an order of 737 Max aeroplanes. In recent years, Delta has leaned more towards Boeing’s European rival Airbus.
This post has been amended to reflect the amount summer ticket prices are expected to be up compared to 2019