Delta expects robust demand in 2024, including business travel

The plans include a renewed focus on its longtime hubs, and a lot of anticipation for overseas travel — but a less-than-bullish view of perhaps the summer’s biggest global event.

Want more airline-specific news? Sign up for TPG’s free biweekly Aviation newsletter.

Travel demand remains strong

As the calendar shifted to 2024, travel industry watchers wondered if the “revenge travel” craze witnessed ever since 2022 might finally begin to subside — or if the packed airport terminals and tourist hot spots seen the last two summers might be here to stay.

It appears to be the latter, at least as far as Delta is concerned.

During the first three-plus months of 2024, Delta has recorded its 11 highest sales days ever, CEO Ed Bastian noted during a conference call with analysts Wednesday.

Business travel finally rebounding?

Part of those surging sales, no doubt, are thanks to what Delta is characterizing as a “meaningful” step forward for business travel.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Ever since pandemic-related restrictions were lifted, travel’s resurgence has been led by leisure travel and, more recently, “group” travel (think travelers headed to conferences). Classic, last-minute, one- or two-day business trips have consistently lagged behind pre-pandemic levels, though.

And the travel landscape’s recovery across the U.S. has been uneven, as hospitality analytics firm CoStar noted in a February report. In 2023, the study showed, per-room hotel revenue surged over 2019 levels in some popular conference destinations like Las Vegas, Phoenix, Tampa and San Diego … but lagged far behind in the likes of San Francisco, Minneapolis, Philadelphia and Los Angeles.

Might 2024 be different?

“Since the start of the year, we’ve seen a sustained acceleration in business travel,” Delta President Glen Hauenstein said Wednesday, noting ticket sales via corporate accounts rose 14% during January, February and March over that same period in 2023.

Leisure travel not fading, either

But it’s not just business travelers giving Delta reason for optimism this year.

“Delta’s core consumers are in a healthy position, and travel remains a top purchase priority,” Bastian added on Wednesday’s conference call.

More broadly, there are signs of another big year for air travel; the Transportation Security Administration recorded its 10th-busiest day ever at U.S. checkpoints leading into the recent Easter weekend, suggesting a continued demand for leisure travel like weekend getaways and vacations.

A big part of Delta’s summer 2024 plans involves international flying.

In June, July and August, Delta’s seats to Europe will be up 11% versus 2019, according to aviation analytics firm Cirium (though by a more modest 6% over last summer), reflecting the sustained interest in overseas trips.

This summer, Delta is also planning year-over-year seat growth of more than 20% to transpacific destinations in Australia, New Zealand, South Korea and Japan collectively, per Cirium.

“For many, many years, the Pacific was a drag on our earnings,” Hauenstein told investors at an industry conference last month, noting transpacific travel is among the factors Delta leaders are “most excited about” this year.

When you combine big overseas plans with a sustained appetite for travel, Delta must be ecstatic about the upcoming 2024 Paris Olympic Games … right?

After all, among the Big Three U.S. carriers, Delta has a bigger presence in Paris than American Airlines and United Airlines combined, with 2.3 million seats to Paris-Charles de Gaulle Airport (CDG) scheduled for this summer, per Cirium.

Let’s just say, the prospects are a little more lukewarm than you might expect.

“Generally, the Olympics are not good for airline revenues. And this year, I think, is no exception to that,” Hauenstein said Wednesday, noting that business travel typically takes a back seat during the weeks surrounding the games.

“So I wouldn’t say that’s going to be a windfall,” Hauenstein said. “It’s actually going to be a bit of a head wind for us.”

Despite that, Bastian was quick to say Delta is firmly behind the U.S. Olympians.

“We’re very excited as a sponsor for Team USA,” he said. “We’ll get through it.”

Last month, Delta leaders reiterated a factoid that’s both a common talking point and a staggering statistic: If you add up all the spending every Delta-Amex customer charges to their card, the total approaches 1% of the U.S. gross domestic product, the company says.

Delta also noted how the company has worked with Amex to expand the number of retail locations where the issuer’s cards are accepted, sometimes a pesky hurdle bemoaned by Amex cardmembers.

Amex cards are accepted at an “all-time high” number of mechants domestically, Hauenstein said. And increasingly, Delta and Amex have focused on this in cities overseas — particularly where the airline flies its SkyMiles members.

“We worked with [Amex] on prioritizing those places that Americans like to go for vacations,” Hauenstein added.

That could mean even more places abroad where you can swipe your Delta SkyMiles® Reserve American Express Card when buying a souvenir, or earn 4 Membership Rewards points per dollar by charging your dinner out to your American Express® Gold Card.

The aviation industry has faced its share of negative attention in recent months, ever since the midair blowout of a door plug on an Alaska Airlines Boeing 737 MAX 9 jet in January.

The incident reignited a spotlight on quality control at Boeing, helping fuel a major leadership shake-up at the plane-maker.

Recently, United has also been at the center of attention amid a series of maintenance problems that prompted Federal Aviation Administration scrutiny (though a top aviation expert TPG spoke with questioned whether the series of incidents on United truly strayed from the routine).

Those events led United executives to pen letters both customers and staff reaffirming the carrier’s commitment to safety.

Asked broadly about maintenance challenges elsewhere in the industry, and whether Delta has plans for any similar communications, Bastian said this:

“Safety is job one at all times, every single day. We don’t send out special messages around safety. Every day is safety day around here.”

For its part, Delta said it had already committed significant resources to maintenance over the last year, and noted Wednesday that maintenance-related flight cancellations were down significantly, year-over-year, in the first quarter.

Over the last few years, Delta has grown at a breakneck pace at Boston Logan International Airport (BOS), solidifying itself as a top player in the market after first announcing the city as a hub in 2019.

In 2024, Delta’s domestic seats out of Boston will be up a striking 34% from 2019, Cirium data shows.

But it’s come at the cost of restoring capacity to its longtime stalwart cities, Delta executives said Wednesday.

“Coming out of COVID, we had to allocate the resources we had available.” Hauenstein told analysts. “And those resources went to our once-in-a-lifetime opportunities to take leading positions in places like Boston and Los Angeles, at the expense of rebuilding our core hubs.”

To his point, 2024 domestic seats from Hartsfield-Jackson Atlanta International Airport (ATL) and Minneapolis-St. Paul International Airport (MSP) are down more than 5% versus 2019 levels, Cirium shows. They’re down by 13% at Detroit Metropolitan Wayne County Airport (DTW).

But that may improve in the near future.

“Our ability to now go back and put seats back into our core,” Hauenstein explained, “is where we’re focused for the rest of this year.”

Among other steps, Delta hopes to continue improving its usage of regional jets. Amid a pilot shortage at regional airlines, Delta leaders estimate the airline’s network currently has 50 to 100 parked or underutilized regional jets.

Related reading: