Air travel will not rebound to pre-pandemic levels for another three years, Delta Air Lines CEO Ed Bastian warned analysts during the company’s first quarter earnings call on Wednesday. “Demand for near-term air travel dropped to almost zero in a matter of weeks,” he said.
But when travel starts to return, Bastian predicts Delta will be a different airline. “Safety will not be limited to flight safety, but [will expand] to personal safety,” Bastian said. “People will pay a premium on service excellence like never before.”
Flights, which before the pandemic were operating 80-90 percent full, may only be 65-70 percent full. Although Bastian did not speculate on whether airfares will rise, he stressed that the airline will be “different” than it was even 60 days ago and will focus on a premium experience, inflight and in airports. “I firmly believe people will pay for premium service.”
For now, Delta is attempting to assuage passengers’ concerns by blocking middle seats and increasing social distancing at airports, security lines, and at the gates. It is investing heavily in cleaning aircraft, with disinfectant fogging and more rigorous cabin cleaning, including of tray tables, seat-back pockets, and inflight entertainment screens. It is too soon to determine if these measures will be permanent, he cautioned. “This recovery will take years. We will spend some time in the future to figure that out.”
Like all U.S. airlines, has seen an astonishing collapse in demand. Bookings in April evaporated, and Delta saw its revenues for the month fall by 90 percent, compared with the same month a year prior. In response, the company has slashed its second-quarter schedule by 85 percent, which translates into 80 percent fewer domestic flights and 90 percent fewer international flights for the quarter.
Delta predicts domestic demand will return sooner than international demand, which Bastian says could take “years” to recover. “Forward bookings are bumping along the bottom,” Bastian said, noting a 95 percent drop in travel. “Demand questions are hard to answer, because there’s not a lot of data.
