Executives on earnings call see ‘choppy’ Q2
Corporate travel demand at Delta Air Lines flattened in March after strong year-over-year growth earlier in the year, according to executives speaking on a first quarter earnings call. The carrier plans to cut capacity beginning in August.
Ed Bastian, CEO, said “broad economic uncertainty around global trade” had caused the weakening of demand for corporate travel and domestic main-cabin demand. He said that international and premium-class travel has been steadier.
Glen Hauenstein, president, said that “some of the more industrial companies that have been impacted on the front end of these tariffs” have reduced travel demand. That was offset by increases in the banking and technology sectors, he said.
Delta projects “choppy” second-quarter corporate travel demand to be “flattish” year over year, Hauenstein said, “similar to what we saw in March.” But Bastian noted that economic uncertainty in the past has led to reductions in corporate demand.
“In a period of maximum or potentially maximum uncertainty all companies do what they can to make sure they protect their future,” Bastian said. “Historically, corporate travel has been the first thing, one of the easiest things to minimize if you are a company.”
He continued: “If we continue on in this elongated sense of uncertainty, no question you’ll see continued reductions in corporate travel. But I think it is premature to project too far ahead at this time.”
Delta plans to keep its second-half 2025 capacity flat year over year, “with domestic main cabin seats declining as we align supply to demand,” Bastian said. He added, “I think we will be looking at Canada and Mexico as places that we probably want to reduce our capacity levels as we move forward,” given declines in transborder demand from both countries.
Delta reported first-quarter passenger revenue of nearly $11.5 billion, up 3% year over year, and total revenue of more than $14 billion, up 2%. The carrier posted first-quarter net income of $240 million, compared with $37 million one year prior.
The carrier projected second-quarter revenue in a range between a 2% year-over-year decline and a 2% increase.
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