US major Delta Air Lines is maintaining a reasonably solid outlook on demand, especially among corporate travellers. However, the airline admits leisure demand is somewhat fitful.
Despite uncertainty over Brexit, the US-China trade spat and the possibility of a recession beginning later this year, most of the large US airlines have a positive outlook on demand. But both Alaska Airlines and JetBlue Airways have recently lowered their 1Q2019 unit revenue forecasts due in part to weak close-in pricing on trans-Atlantic routes.
Delta has maintained its first quarter unit revenue forecast of 2% growth to a flat year-on-year performance. The company also pledges to return to margin expansion in 2019. Recently, Delta CEO Ed Bastian stated corporate demand has been strong, with growth of 7% during 1Q2019.
“Leisure demand has been a bit choppy,” Mr Bastian concluded. “We’ve had a government shutdown that’s influenced the results. We’ve had Easter shift, which I think you’ve heard from others is influencing some of the leisure demand within the quarter, a shift between first and second quarter.”
The US carrier has also cited headwinds in trans-Atlantic markets, citing domestic unrest in France, Brexit and currency challenges. The airline has forecast a negative unit revenue performance in the trans-Atlantic for 1Q2019.
Based on early bookings, Delta believes it should post a strong performance in the trans Atlantic for the US summer high season, but also cautioned that it was watching the region closely, and would adjust its capacity during the shoulder periods if necessary. Even with the challenges in the trans-Atlantic makes, “we’re coming in at the top end of the total revenue that we anticipated for the quarter,” said Mr Bastian.
Delta is now seeking to tap into young minds to bring innovation to customer experience, leveraging out-of-the-box thinking. The airline is tapping into the creative Forbes under 30 community of “young game changers” to develop new and thoughtful flight experiences. The individuals represent a diverse set of young innovators, entrepreneurs and risk-takers who are already lending their propensity for disrupting a variety of industries.
Commercial and operational representatives of the US carrier have already started collaborating with them to reimagine innovative products, experiences and offerings across the entire journey – from shopping online and traversing the airport, to the in-flight experience and beyond.
Delta’s new under 30 advisory board is part of its ongoing work to develop innovative solutions to enhance the customer experience. While the global airline regularly connects with customers to shape experiences, it has also partnered with higher education institutions including the Savannah College of Art & Design and Georgia Tech to think critically and creatively about what’s possible.