Delta CEO Projects U.S. Summer Travel Will Fuel Return to Profit
Delta Air Lines Inc. expects that domestic travelers will return in sufficient numbers this summer for the carrier to become profitable in the third quarter, Chief Executive Officer Ed Bastian said.
“I really do believe it’s going to be a robust travel period,” he said in a Bloomberg Television interview Thursday. “There are great bargains out there for consumers.”
International markets, however, are about a year away from being able to reopen “at any scale,” Bastian said. Varying travel restrictions and quarantine requirements worldwide have made corporations and individuals hesitant to resume cross-border trips.
The CEO’s comments build on a broad industry expectation that Americans weary of a year of coronavirus-related restrictions will return to the air as more people are vaccinated and infection rates slow. Domestic travel remains at about 40% of 2019 levels, extending airlines’ losses as most carriers continue to spend millions more dollars than they bring in on a daily basis.
While it’s “a little early” to know for sure, Bastian said he’s optimistic that Delta will hit its projections of breaking even on cash flow in the second quarter and reporting a profit in the third. That assumes, though, that “vaccinations continue to roll out.”
“We know that consumers in the U.S. have a considerable amount of pent-up demand,” he said. “We know many of them have also been able to accumulate some additional savings over this past year as they’ve suspended many of their activities. I expect they’re going to be ready to get their lives back this summer.”
This article originally appeared on Bloomberg