Delta eyes business seat pivot amid 'demand erosion'

Delta is considering marketing premium seats normally targeted at business clients to high-end leisure customers after the sector helped drive third quarter revenue gains.

"I think the big epiphany for us was there is a much broader demand for this than just business travelers," Delta president Glen Hauenstein said today. "And if we have to pivot to demand sets for high-end leisure to fill those seats, that trade is a trade-off we'll make and I think that we could be quite profitable with under any scenario."

The new demand signals not only that consumers have more savings, but also that the public is eager to buy seats previously snatched up by business clients and that hunger for premium services is growing, Hauenstein said.

While Delta is optimistic that business demand will return to 2019 levels by the second half of next year, that demand is going to come back "differently" due to the convenience of remote work for some companies, chief executive Ed Bastian said.

"We're optimistic that [demand] is going to come back plus, but I think it's also safe to say it's going to come back differently," Bastian said. "And there's going to be some level of demand erosion and some element of behavioral change, no question about it."

Despite plans by some companies to cut down on travel spending, hybrid working modes should also allow workers to stay plugged in while on the road for personal travel, opening up a new form of business travel, Bastian said.

Delta's business and premium cabins generated third quarter revenue of $2.5bn, up more than four-fold from the same period last year, but down by 38pc from two years earlier.

The company posted third-quarter profit of $1.2bn, marking its first quarter in the black since the fourth quarter of 2019.

By Dylan Chase