Delta CE relaxed about risk of recession

Delta CE Ed Bastian said the carrier had not seen any signs of waning demand for travel despite soaring inflation and that he was relaxed about the impact of a possible recession. “I am not worried about it,” Bastian said in an interview when asked about recession risks. “Should demand drop, we would take measures to adjust supply or capacity to accommodate . . . but I’m not anticipating that.” The airline “is already pretty disciplined and conservative going into a potential recessionary climate”, he added, noting that seating capacity was still at 82% of 2019 levels. An economic slowdown would also reduce the cost of jet fuel, providing a tailwind for airlines contending with prices that have roughly doubled since 2019. Bastian said the Atlanta-based carrier, the third largest in the US, had seen “very healthy” demand from customers for flights throughout the rest of the summer and in the early autumn, as well as promising signals for the holiday season. US flight schedules were thrown into chaos during May and June after thousands of delays and cancellations caused by staffing issues, bad weather and air traffic control problems. “It was our rough patch . . . a function of an enormous surge in demand” that Delta struggled to meet, Bastian said. The airline — which was the hardest hit over the busy Memorial day weekend — “didn’t do as good as we could”, he added. Bastian said avoiding a repeat of the havoc was the airline’s “number-one challenge”. Despite the tumult, the surge in demand resulted in a profitable second quarter for Delta, which generated adjusted net income of $921m on operating revenue of $12b. However, profit and revenue were down 40% and 1% respectively versus the same period in 2019.<br/>