Delta Airlines’ Q3 Profit May Signal Wider Takeoff of Pent-Up Travel Demand 


Delta Airlines achieved a greater lift on third-quarter financials released Wednesday (Oct. 13), reporting a profit of $1.2 billion in a positive sign of recovery for the entire airline sector.

In its earnings announcement, Delta CEO Ed Bastian said, “Our September quarter marked an important milestone in our recovery, with our first quarterly profit since the start of the pandemic.”  

During a Q&A with investors and analysts, Bastian said, “Our revenue recovery in the September quarter reached 66% of 2019 levels, progressing from 51% in the June quarter and just 25% at the start of this year.” He also noted that “last week was our top corporate revenue booking week since the start of the pandemic, and with the announcement that U.S. borders will open in November, bookings from Europe and Brazil to the U.S. are rapidly improving.” 

Delta’s uplifting earnings are affirming for the downtrodden travel sector — and the good news didn’t stop there. Bastian also said that “more customers are engaging with Delta than ever before, driving record downloads of our Fly Delta app and record signups for our SkyMiles loyalty program.”

The Delta-American Express co-branded program “continues to show strong resilience, with card acquisitions nearly 95% restored and card spend 115% recovered to 2019 levels. As a result, remuneration from American Express in the September quarter exceeded 2019 levels, totaling just over a billion dollars in the quarter, demonstrating the durability of our brand preference as we continue to deepen our customer relationships.” 

The results align with PYMNTS’ research, which finds that consumers are eager to board planes and book hotels again. The latest in the Pandenomics report series, The Post-Pandemic Consumer At 18 Months: Spending Now, Worrying Later, found that 27% of consumers surveyed “plan to travel more within the U.S., suggesting that the country could soon see a surge in domestic tourism.”

Read the studyThe Post-Pandemic Consumer at 18 Months: Spending Now, Worrying Later  

A Big Week Ahead as Other Carriers Report 

With major carriers including United Airlines and American Airlines releasing quarterly earnings on Oct. 19 and Oct. 21, respectively, there’s a growing sense that pent-up leisure and business travel demand will help overcome rising fuel costs and remaining COVID restrictions. 

Unknowns still loom over Delta and its competitors regarding what form business travel recovery will take after 20 months of Zoom calls replacing zooming flights to conferences.

Bastian addressed this, saying, “In the September quarter, domestic corporate volume was 40% recovered, up 10 points from the June quarter. With the spike in case counts delaying office reopenings, we did not see the progression we had expected at the start of the quarter, particularly after Labor Day. But as the variant recedes, business travel has picked up over the last month, with volumes now reaching the highest level we’ve seen in the recovery. In the last week, our domestic business volume was close to 50% restored.”

As for the leisure side and the overall outlook for the balance of 2021, Bastian said, “We anticipate our revenue momentum to show good progress through the December quarter, finishing the months of November and December combined at a 75% recovery. This 10-point improvement from current levels is driven by offices reopening, international restrictions easing and our expectation that consumer strength continues into the holidays.” 

See also: Wanna Jump-start Travel? Pile on the Perks and Memberships 

The Vaccine Effect, and Other Signs of Recovery 

With PYMNTS’ study, Post-Pandemic Consumer at 18 Months, finding that 50% of all consumers “now plan to shop, travel, dine and attend social events more often in the next three months,” Bastian’s outlook is more than wishful thinking.

Vaccines are central to the return of travel, and most other outgoing activities. That same PYMNTS study notes that “vaccines have played a key role in alleviating consumers’ fears about how the pandemic will impact their health and the health of those around them. As more consumers get vaccinated, the less worried they become about contracting or spreading the virus. Seventy-one percent of all adult U.S. consumers have received at least one inoculation — three times as many as had done so by February 2021.”  

More or less confirming this, Bastian told analysts that Delta expects “continued improvement as offices reopen at the start of the new year, and we anticipate a meaningful acceleration in business travel starting at that point. That sentiment is coming through loud and clear in our most recent corporate surveys. More than 90% of our respondents mentioned that they expect travel volumes in the December quarter to either be the same or to outpace the September quarter.” 

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