Airline Industry Has ‘$300 Billion of Unmet Demand’ Yet ‘This is the Most Difficult Year We Ever Had,’ Says Delta CEO

January 17, 2023
January 17, 2023

Delta aircraft at Terminal 4 at New York's John F. Kennedy International Airport

The airline industry in the United States has “$300 billion of inherent unmet demand” that it hasn’t yet been able to fulfill due to the ongoing coronavirus pandemic, according to Delta Air Lines CEO Ed Bastian.

Speaking on the program “Squawk Box” on CNBC, the Atlanta-based airline’s top executive offered an upbeat forecast, saying  that “we’re going to see tens of billions of dollars of incremental demand coming into our space,” adding that this is “going to go on for several years to come.”

“This is the most difficult year we ever had,” Bastian said, citing the unexpected return to pre-pandemic travel levels.

Bastian said that the Southwest Airlines computer system meltdown at the end of December that caused tens of thousands of flight cancelations helped his airline as its schedule was largely maintained despite operational challenges from severe weather.

“There were a lot of customers looking for airlines given some of the Southwest challenges, and we got a benefit from that,” he said.

Meanwhile, the Federal Aviation Administration system outage on Wednesday, which resulted in thousands of flight delays and cancellations, showed how old industry infrastructure can be.  Bastian maintains that the FAA needs to obtain funding in order to modernize its system to prevent future such failures.

Finally, the final quarter of 2022 turned out to be better than expected for Delta and other major U.S. airlines.

Delta expects to return to a “great profit-sharing payment” for the fourth quarter.  On Valentine’s Day this year, the airline will distribute $550 million to its employees as part of the profit-sharing program it offers.

“Our team did a great job” in Q4, Bastian said, noting that the airline had a 12% operating margin, which was better than what the airline’s guidance had said to expect.  “A lot of that was cost driven” including a lower cost for jet fuel, and also included customers coming over from Southwest.

(Photo: Accura Media Group)

Source link


  • Chuck Parsons

    Chuck is Score LA’s Executive Director of Events and Marketing. He aims to help business owners and would-be entrepreneurs in Los Angeles improve their business practices.

Score LA is a website dedicated to the sprawling California city in the south, which happens to be the heart of the United State's movie and TV industry. Near the iconic Hollywood sign stands the studios Paramount Pictures, Universal, and Warner Brothers, along with others that also give behind-the-scenes tours.
Additional Information
Copyright © 2023 Score LA. All Rights Reserved. Protection Status