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Delta’s decision to block off middle seats is paying off—for now.
Despite having 30% fewer seats available for sale than the industry average because of its commitment to keeping passengers socially distanced, Delta Air Lines earned 3% more aggregate passenger revenue than its average competitor in Q3, according to CEO Ed Bastian.
From Bastian’s perspective, who spoke at the virtual Coins2Day Global Forum on Tuesday, such a feat is a reflection of the consumer trust the airline has cultivated throughout the pandemic. But it’s also unsustainable.
“It’s going to take some time before customers are confident sitting next to people on a crowded flight, and at Delta we want to give them a little bit more time—certainly into the new year—to evaluate that for themselves,” Bastian said. The company has stated it will block middle seats through at least Jan. 6. “Obviously, our business model doesn’t work blocking middle seats forever,” Bastian continued, “but we have the ability to continue to manage that for the next few months.”
While Delta may be seeing continued improvement from the dismal 90% reduction in business it suffered in Q2, the company is still expecting to lose $10 million to 12 million a day in this final quarter of the year. And even with a vaccine potentially on its way, Bastian is wary that a return to pre-pandemic revenue levels and travel rates is not as imminent as airlines might hope.
“Unfortunately, there are a lot of people that haven’t been traveling by air for an extended period of time,” Bastian said. “And it’s going to take them a while before those old behaviors become the new patterns that we can anticipate.”
Still, Bastian is confident that neither business nor international travel is gone for good. Eventually, he believes, companies will realize that true human connection cannot be replicated over a computer screen.
“Every crisis, whether it’s 9/11 or the Gulf War in the ’90s or the recession in the 2010 timeframe, people have always said business travel is never going to return to where it was,” Bastian said. “It’s the first thing companies chop because it’s discretionary, but it’s also one of the fastest things to come back when people feel ready and safe to travel.”
As far as international travel goes, Bastian said he believes it will be the availability of point-of-care testing, rather than a vaccine, that brings back overseas flights.
“We could test you before you go; we know we could test you when you land and make it as convenient as possible,” Bastian said. “I’m optimistic that we’re going to find some solutions before the end of the year to get international flights open again.”
For now, Bastian is trying to focus on a silver lining.
“The world feels more distant and isolated than ever, and that’s our business,” Bastian said. “Our business is bringing the world together, and we know once we get through this next year, with medical advancements and technology being the key to it, people are going to feel comfortable traveling and are going to want our product more than ever.”