US carrier Delta is forecasting that corporate revenue will remain steady at about 80 per cent of 2019 levels during the first quarter of this year.
Delta president Glen Hauenstein said this prediction for business travel demand applied to both domestic and international operations, during a conference call on the airline’s full-year 2022 results on Friday (13 January).
The cautious outlook came despite a recent survey showing that 96 per cent of Delta’s travel manager customers were set to maintain or increase their bookings during Q1 compared with the final quarter of 2022.
“We are not counting [the survey results] in our current revenue forecast because sometimes they don't come to fruition,” said Hauenstein. “But there is a sense of optimism with pent-up demand for business travel that we think could potentially offset any weakness in the general economy.”
Delta CEO Ed Bastian added that the current outlook for corporate sales was also based around companies’ struggles to fully reopen and return employees to the office.
“As companies return and employees return to office, we will see a step up in more normal trends, including business travel," said Bastian.
“A lot of our accounts we serve are consultancies, legal, accounting, and it's tough for them to get on the road if offices are not open of their clients and customers. But as we progress over the course of the year, more and more you'll see business being done like it used to be done.”
Delta reported net profit of $1.32 billion in 2022 as annual revenue reached $50.6 billion, an 8 per cent increase from 2019, but passenger revenue was still down by about 4.9 per cent on 2019 at $40.22 billion.
Despite the rebound in revenue, Delta’s net profit was down 72 per cent from the $4.77 billion achieved by the company in 2019, as its adjusted fuel costs rose by 35 per cent to $11.5 billion in 2022 compared with the pre-Covid year.
The airline has forecast that revenue in the first quarter of 2023 will be between 14 per cent and 17 per cent above the same quarter in 2019, with capacity expected to be 1 per cent lower than during the pre-pandemic period.