Delta Air Lines is doubling down on more profitable premium travel as it looks to shore up its defenses against an economic downturn.
Chief Executive Ed Bastian told Reuters the U.S. carrier will have premium seats on every plane it flies starting this summer. Currently, dozens of 50-seat planes, accounting for about 2% of Delta's fleet, don't have those seats.
It is betting that spending by affluent leisure customers, who have been flocking to premium cabins, will be less impacted in any potential downturn. Last December, President Glen Hauenstein called them a "great shock absorber" in the face of weak corporate bookings. This growth is coming at the expense of low-fare basic economy seats. That opens up avenues for the carrier to grow revenue through non-ticket sources like loyalty credit card fees, checked bags and extra legroom.
The success of this strategy depends on providing reliable on-time operation in terms of arrivals and departures, said Robert Mann, a former airline executive who now runs a consulting firm. "It's kind of a litmus test," he said. Delta aims to build on that performance, Bastian said. "It doesn't matter if you create a premium product that customers are going to be late or they're going to be canceled on," he said.The quest for premium revenue has its underpinnings in the post-pandemic travel patterns.
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