“Demand remains strong, and we are seeing a record spring and summer travel season with the 11 highest sales days in our history all occurring this calendar year,” Delta Air Lines CEO Ed Bastian said on a call with his company a week ago. American Airlines and Southwest Airlines announce results on April 25.
Demand for air travel has been resilient despite persistent inflation that has weighed on household budgets, as well as a series of high-profile safety issues that have sparked congressional hearings and become the subject of jokes from late-night TV shows to TikTok.
Public and regulatory scrutiny of the industry increased after a door seal on a Boeing 737 MAX 9 exploded in January. This led to a new safety crisis for Boeing and slowed the delivery of its new planes to airlines.
United Airlines itself is under a safety review with the Federal Aviation Administration after several incidents this year, including a tire that fell off one of its older Boeing 777 planes.
Airlines, which make the bulk of their money in the spring and summer, are struggling with rising fuel and labor costs, with new contracts giving pilots and other workers big raises after years of stagnant wages.
However, demand for international flights and a rebound in corporate travel helped boost global airlines. Delta and United's second-quarter forecasts beat Wall Street estimates. Customers appear willing to pay a higher price for first class and other cabins than standard buses, executives said.
Nocella said on Wednesday's earnings call that the airline could segment the front of the plane further, as United and other airlines have done with the coach. “You have many teams of people working on how we can continue to innovate and provide more and more choice and monetize that choice on our behalf, in the future of course,” he said.
Meanwhile, Delta said premium revenue growth has outpaced standard coach sales for years.
Delta, United and American have announced upgraded first-class and business-class cabins as well as more and larger lounges to accommodate the growing numbers of travelers willing to pay for pricier tickets, elite status or high-fee rewards credit cards.
Delta is scheduled to open a new, more exclusive category of the airport lounge later this year.
Local and low-cost airlines are scheduled to announce their results in the coming weeks. Some of these airlines have suffered in recent months due to increased capacity, limited aircraft availability, and high costs.
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