Taylor Swift boost fails to allay discounting fears at Delta

Taylor Swift fans travelling to Europe for her concerts helped Delta Air Lines report record revenue levels in the second quarter but failed to allay fears about peak summer travel and the oversupply of seats. The US carrier reported adjusted revenue of $15.4b in the three months to the end of June, but its shares declined after its forecasts for the peak summer travel season fell short of analysts’ expectations, raising concerns that airlines will be forced to discount airfares. CE Ed Bastian acknowledged fares had declined from a year ago as US carriers have flooded the market with seating capacity. While Delta has been relatively insulated thanks to its revenue from first- and business-class travellers, its economy class revenues have been affected. “In the domestic market, as a whole, capacity is up 8 per cent over last year, and we think that real demand this summer is probably in the 4 to 5% range,” Bastian said. “So that 3 per cent of additional supply . . . is causing a lot of discounting in the lower-fare buckets,” he said. Bastian said transatlantic travel was stronger than domestic travel in the second quarter, noting that some young US travellers were boarding flights to see pop star Taylor Swift play in Europe, where tickets were generally cheaper than in the US. He also cited the strong dollar as a driver of trips between the US and Europe, as well as continued strong appetite for travel following the pandemic.<br/>