Delta CEO expects holiday travel demand to set 'record for the company'
Delta Air Lines estimates it will fly over 6 million passengers over the Thanksgiving holiday.
Holiday air travel bookings are expected to cap off a strong year for Delta Air Lines (DAL).
“I expect our fourth quarter to be a record for the company both in revenues as well as in demand,” Delta Air Lines CEO Ed Bastian told Yahoo Finance Live (video above).
Delta estimates that 6.2 million to 6.4 million passengers will fly using its service during the Thanksgiving holiday travel period between Nov. 17 and Nov. 28. For comparison to pre-pandemic demand, the airline carried 6.3 million passengers during the same period in 2019.
Delta has reported record earnings in recent quarters, and the catalysts have been multifaceted, as passengers seek premium travel experiences, embark on journeys to international destinations, and exercise hybrid work policies in locations away from the office.
“As a full-service carrier, whether it's international, business, premium, we have a healthy mix of revenue streams all contributing to the record performance,” Bastian said, echoing Southwest CEO Bob Jordan's comments to Yahoo Finance about robust travel demand.
TSA passenger throughput in 2023 so far has outpaced the travel numbers in 2019 year to date. Volumes have surged as passengers travel for corporate events, vacations, and Taylor Swift and Beyoncé concerts.
Big revenge travel pop has 'come and gone'
Delta anticipates that a "new normal" will prevail in 2024 after the holiday travel surge.
While bookings look good going into the new year, January will offer the next test for the airline industry, given the cyclical lulls until President’s Day weekend and then until spring break travel reignites annual high volume through Labor Day weekend.
“I think we're entering the period of the new normal for travel,” Bastian said. “The big revenge travel, I would say, is behind us, but the big pop has kind of come and gone.”
“As you're looking at pricing, as you're looking at trends, we're coming off a peak last year, where people just needed to go,” Bastian added. “They didn't care what they paid or where they went, they just needed to get out. We're now back into a more normalized pricing environment, but we still have a great outlook on our revenue.”
While consumers visited a range of destinations during the year, some signs of weakness are beginning to show among the lower-income consumer cohorts.
“In our industry, on the lower end of the pricing curve, there is some stress with some of the low-cost airlines and low-fare airlines,” Bastian said, acknowledging some of the financial pressures that consumers are facing.
While a softening demand environment for value fares and a late summer market downturn have created turbulence for air carrier stocks, Delta has managed to slightly outpace industry competitors.
Year to date, Delta stock is up 1.8%.
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