Delta boss warns of 2-year business travel recovery

The CE of Delta warned Tuesday that the airline’s recovery in the crucial business market was likely to take at least two years as the carrier’s corporate revenues plunged. The airline’s business revenues dropped 86% in Q3, while leisure passenger sales fell 82% as it burnt through more than $20m of cash a day in a pandemic savaged market. Ed Bastian said corporate travel, which provides half of its revenues, was likely to still trail behind 2019 levels by at least 20% in two years’ time. “It will take up to two years before we fully see where business travel is going to be [at] a sustained level of demand,” Bastian said. “I don’t expect it to be 100 per cent back to 2019 levels, but . . . hopefully 75-80% of it.” While some corporate travellers are slowly returning to the skies, the recovery is threatened by executives’ and managers’ growing comfort with digital conferencing. Paul Jacobson, Delta’s CFO, said Tuesday that the airline was working with airport authorities in the US and internationally, as well as the US CDC, on pilot programmes to open international travel lanes, noting that “testing will be an important ingredient in getting there”. Delta booked a $6.9b pre-tax loss in Q3, compared with $1.9b in pre-tax income a year earlier. Operating revenue fell 76% to $3b. The company reported an adjusted loss per share of $3.30, slightly more than the $3 consensus among analysts polled by FactSet. The company’s cash burn averaged $24m a day for the three months to the end of September. At the start of the pandemic the airline had hoped to reach zero by the end of the year, which Bastian called “a pretty lofty goal without any real knowledge of how the virus would be contained”. He said Delta will now reach $10m a day in December and zero by spring next year.<br/>