According to a recent survey from Delta Air Lines, half of the corporate travel managers responding say they are expecting between 50 percent and 100 percent of their domestic travel to come back to pre-pandemic levels by the end of 2021.
In addition, the survey found up to 50 percent of international business travel could return to its 2019 demand by the end of the year, according to Ed Bastian, Delta’s CEO.
While corporate demand remains depressed, the airline’s corporate revenue was higher than in the previous quarter, “with small and medium accounts which make up half of our corporate revenues recovering five points faster than large corporates,” Bastian said.
“These are small business owners who need to get out to their customers, who have to work hard every single day to keep their sales and their business moving. And we do see a meaningful continued improvement in small business traffic.”
The survey results were revealed on the airline’s quarterly call with analysts Jan. 15. The research found 40 percent of big corporate customers expect they will be fully back to 2019 levels by 2022 and another 11 percent by 2023. Only 7 percent of respondents said there would never be a return to 2019 levels.
“Our corporate accounts are telling us that they largely anticipate returning to their offices and travel in the June and September quarters,” Bastian noted on the call. “What our corporate travel managers are telling us is that 50 percent expected to be fully back by 2023. The other 50 percent is largely uncertain, but we expect a meaningful amount of that travel to return as well.”
Also on the call, executives said they expected the airline to see a return to profitability by summer as they continue to limit cash burn and see what Bastian called “an inflection point” that would allow the airline to break even or better by summer.
The statement reflects Bastian’s message in a New Year’s memo to Delta employees in which he outlined a year that would likely unfold in “two distinct phases.” The first, he predicted, will “look a lot like 2020,” while the second phase will begin “only when we reach a turning point with widely available vaccinations that spur a significant return to travel, particularly business travel.”
The airline remains the only US carrier to continue to block middle seats and limit capacity through March 30. When asked on the call about when a decision might be made on unblocking middle seats, Bastian said, “When demand returns, that will inform our decision around what to do with the middle seats.”