Delta Air's ticket sales improve, reinstates initial Q3 revenue view

Domestic travel bookings are expected to surpass 2019 levels next year

  
Delta Air Lines planes are parked at their gates at Hartsfield Jackson International Airport in Atlanta, Georgia, U.S., October 27, 2020.

Delta Air Lines planes are parked at their gates at Hartsfield Jackson International Airport in Atlanta, Georgia, U.S., October 27, 2020.

REUTERS/Brian Snyder

BOSTON - Delta Air Lines said on Sunday that its ticket sales had stabilized and started to improve, putting it on course to deliver third-quarter revenue within its original forecast for a 30%-35% drop versus corresponding 2019 levels.

This is an improvement from its projection last month when it adjusted the forecast to the lower end of that range after a resurgence in COVID-19 cases. The airline is due to report results for the quarter through September on Oct. 13.

"For Delta, they bottomed out in the later part of August and the first part of September," Chief Executive ED Bastian told reporters on the sidelines of a meeting of airlines group IATA. "Business traffic is growing back in the U.S."

Domestic travel bookings are expected to surpass 2019 levels next year, Bastian added.

Later, the airline said it would boost its capacity by more than 20% next summer over the 2019 peak by increasing service from Boston.

The company is also seeing a surge in demand for trans-Atlantic flights after the White House's decision late last month to reopen the country to fully vaccinated travelers from around the world.

Trans-Atlantic flights accounted for 11% to 17% of 2019 passenger revenues for the big three air carriers - American Airlines, United Airlines and Delta.

On Delta's staff vaccination rate, Bastian said it had gone up to 84%, driven, in part, by the company's decision to impose a $200 monthly health insurance surcharge for those who had not been vaccinated. He expects the rate to be above 90% by Nov. 1.

Delta, however, is the only major U.S. airline that has still not mandated coronavirus vaccines for employees despite the pressure from the White House.

Bastian said the company has not decided whether to mandate COVID-19 vaccines.

"We're obviously studying it," he said, referring to President Joe Biden's executive order requiring federal contractors to mandate vaccinations.

"I'm not sure how far you need to go in order to be in compliance with the EO (executive order)."

The White House is pressing major U.S. airlines to mandate COVID-19 vaccines for employees by Dec. 8 - the deadline for federal contractors. Large U.S. airlines have a number of federal contracts.

(Reporting by Rajesh Kumar Singh; Editing by Himani Sarkar) ((rajeshkumar.singh@thomsonreuters.com; +1-312-408-8537; Reuters Messaging: rajeshkumar.singh.thomsonreuters.com@reuters.net))


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