Skift Take
A summer leisure-travel surge could sweep Delta to profits in the next quarter. The company doesn't expect a meaningful recovery in international or business travel until later in the year, however.
With bookings rising and demand for leisure travel surging, the recovery is within sight for Delta Air Lines, which now says it will return to profitability by the third quarter of this year. But that’s the future. The present for Delta, like for all its competitors, is stained with red ink.
The Atlanta-based carrier made news earlier this week when it said from May 1 it would no longer block middle seats, a coronavirus-mitigation tactic that Delta will be the last to abandon. This, despite the U.S. Centers for Disease Control and Prevention reporting this week that an empty middle seat reduces virus transmission. Still, Delta CEO Ed Bastian believes that by May 1 enough of the population will be vaccinated to make selling the middle seat safe again.
The move to unblock the middle seat will almost immediately increase Delta’s capacity and help its bottom line. The policy cost Delta between $100-150 million in March alone, President Glen Hauenstein told analysts during Delta’s first-quarter earnings call on Thursday. When it goes back to selling middle-seat tickets, Delta will increase the number of seats available to sell by almost one-third. Because of the policy, Delta had been operating more flights during the pandemic than its competitors, so opening up the middle seat will allow it to serve the expected surge in summer capacity without having to put more aircraft in the sky, Bastian said.
A summer Surge
As to the summer, Delta i
