Skip to content

Delta bullish on the return of business travel, despite 'alarm bells' of skeptics

Jan. 14, 2021
5 min read
Delta bullish on the return of business travel, despite 'alarm bells' of skeptics
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Not so fast on those predictions about the death of business travel following the coronavirus pandemic.

Delta Air Lines aggressively forecast that corporate travelers would return in the second half of 2021 and credited its strategy of keeping the middle seat empty for luring an ever-increasing share of them.

“I think business travel has a very strong opportunity to return over the next two years and we will be well-positioned to get it,” CEO Ed Bastian said Tuesday on Delta's earnings call as the carrier led off airline industry fourth-quarter reporting.

Bastian continued his assault on tech-inspired predictions of a permanent business travel decline due to the rise of Internet video conferencing. Notably, billionaire Bill Gates has pontificated that more than half of business travel "will go away" following the pandemic.

Want more airline-specific news? Sign up for TPG's free new biweekly Aviation newsletter!

Delta does not share that view. When an analyst questioned the carrier's strategy of adding more premium seats as it rebuilds its fleet, Bastian responded, “I wouldn’t draw the conclusion that corporate travel is impaired at all."

“I don’t think we should be worried or ringing alarm bells as to the future of corporate travel,” he said, noting that cost-cutting Delta has 200 fewer airplanes than it did at the start of the coronavirus crisis.

Bastian said Delta expects that “sustained recovery will begin in the second half of 2021.” The carrier will be at breakeven or better by the second quarter, he said, after suffering a $755 million net loss in the fourth quarter. For the full-year, Delta's loss was a staggering $12.4 billion. Daily cash burn was $12 million in the fourth quarter and will total $10 million to $12 million in the current quarter.

“Demand will start to accelerate as vaccinations become more widespread,” Bastian said.

Sign up for our daily newsletter

Guide: Which US airlines are blocking middle seats?

Delta President Glen Hauenstein said that keeping the middle seat empty is boosting Delta’s reputation among business flyers.

“The brand was never stronger (and) our revenue premiums have never been higher,” Hauenstein said. “Customers value the Delta difference (including) the least amount of sellable capacity,” as well as the carrier’s safety standards during the coronavirus crisis and its workforce.

Hauenstein laid out a scenario for a three-phase recovery.

In the first phase, which continues fourth-quarter trends, demand choppiness will continue, with ticket sales down 50% from 2019. In the second, likely to come this spring, customers will start to regain confidence and will buy tickets for travel farther into the future.

More: Delta moves up Boeing 717, many 767 retirements amid coronavirus fleet reset

In the third and final phase, which Hauenstein put in the second half of the year, vaccines will become more widespread and Delta will see “sustained improvement of demand and yield," he said, adding that leisure travelers will return before corporate travelers.

During the call, Hauenstein recalled a Delta slogan, “Delta Is ready when you are,” to indicate that Delta “will be ready to serve our corporate customers.”

Bastian cited a survey of Delta’s large corporate customers, which showed that 40% anticipate being fully back to 2019 business travel levels by 2022. Another 11% anticipate a full return by 2023. In contrast, 42% said they aren’t sure when they will be back and 7% said they will never be back.

Farewell: Delta says goodbye to the Boeing 777, the one-time ‘queen of our fleet’

Despite “all the dialogue and speculation about the death of business travel,” at least 51% say they will return by 2023, Bastian said. If just half of those who are reluctant return, “that gets you 75% of the way back no later than 2023,” he said, noting “that’s a very pessimistic view.”

Bastian was non-committal when a reporter asked when Delta will again begin to sell middle seats. So far, the carrier has said it plans to block them through March 30.

Hub outlook: Delta Air Lines ‘committed’ to new Boston hub; Austin, Raleigh focus cities

“We've not made a decision beyond the end of March relative to when to unblock the middle seats," Bastian said on the call. "We have some time to continue to look at that. I think it's going to be very much driven by customer demand, customer input, the confidence customers have in those seats."

Empty middle seats are “one of the important reasons why Delta has been able to earn an even higher revenue premium than we’ve always had,” he added. “We want to be very careful as we make that decision.”

Featured image by Alberto Riva
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

TPG featured card

OFFER ENDS 5/3/23
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards

2 - 6X points
6X6x Marriott Bonvoy Points on each dollar of eligible purchases at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.

Intro offer

Earn 125,000 points75,000 points
Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. Offer ends 5/3/23.

Annual Fee

$125

Recommended Credit

670-850
Excellent/Good
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6 points per dollar on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4 points per dollar at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2 points per dollar on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. Offer ends 5/3/23.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • 6x Marriott Bonvoy Points on each dollar of eligible purchases at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
Apply for Marriott Bonvoy Business® American Express® Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards Rate

6X6x Marriott Bonvoy Points on each dollar of eligible purchases at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.
  • Intro Offer
    Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. Offer ends 5/3/23.

    Earn 125,000 points
    75,000 points
  • Annual Fee

    $125
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6 points per dollar on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4 points per dollar at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2 points per dollar on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. Offer ends 5/3/23.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • 6x Marriott Bonvoy Points on each dollar of eligible purchases at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.