Turmoil over US trade policy is not clouding Delta Air Lines’ outlook for a recovery in corporate revenue. The airline believes it is well on its way to recapturing corporate fares that plummeted during the last three-to-four years after peaking in 2014.
Speculation is growing over the possible effects oft the US-China trade spat on long term business travel. The US is seeking to impose up to USD60 billion in tariffs in Chinese goods, and China has also threatened to retaliate with its own set of targeted tariffs.
At the beginning of 2018, Delta Air Lines had a bullish view on corporate travel prospects for the year, concluding a survey of its corporate travel managers showed more than 88% forecasted their spend would be maintained or increase this year. It was the most positive outlook Delta expressed for corporate travel prospects in three years.
In 1Q2018, Delta’s corporate revenues were up 7% year-on-year, and with domestic fares up 2.8%, the company stated: “We have now recovered a quarter of the decline in domestic average corporate fares versus the peak in 2014.”
Delta is fielding questions over when it can recover the remaining 75% of corporate pricing declines, and company executives stated the airline was working everyday to bolster its corporate performance. “…we don’t see any real impediment to be able to get back there over time”, said Delta President Glen Hauenstein.
As the airline continues work to restore corporate revenue to 2014 levels, “I think we’ve shown in the first quarter, anyway, what I would consider to be some industry-leading results in terms of our ability to capture that,” said Mr Hauenstein. “And we see that momentum continuing into the second quarter.”