How Delta made itself America’s luxury airline — and what United wants to do about it

by | Jun 25, 2024 | Business

An Airbus A330-323 aircraft, operated by Delta Air Lines.Benoit Tessier | ReutersDelta Air Lines is the country’s most profitable airline. CEO Ed Bastian’s challenge is to make sure his carrier stays on top.The airline’s unit revenue, the amount it brings in for every seat it flies one mile, outpaced its competitors’ last year. Delta’s share price has soared almost 23% in 2024, more than any rival in the rocky airline sector, in a rally that’s outdone the S&P 500’s. It expects free cash flow to rise as much as 50% this year to between $3 billion and $4 billion, and is eyeing a return to an investment-grade credit rating. And a stat any traveler would appreciate: Delta came in first in punctuality last year, with more than 83% of its flights arriving on time, according to the Transportation Department.Rival United Airlines — second to Delta in net profit margins — is circling. It says it could grow profit even more this year.”Knowing that there’s someone that thinks that they can take that mantle from us, that keeps us on our toes and keeps us continuing to drive hard,” Bastian told CNBC.Ed Bastian, chief executive officer of Delta Air Lines Inc., during an interview in New York, US, on Monday, Nov. 7, 2022. Bastian said that he sees ‘strong demand’ for flights carrying into 2023. Jeenah Moon | Bloomberg | Getty ImagesDelta has fashioned itself as America’s premium airline. It has won over hordes of splurging travelers, many of them carrying American Express cards, Delta’s cash cow of a partner that generated almost $7 billion for the airline last year. Sales growth of Delta’s roomier and more expensive seats continues to outpace revenue from standard coach.As they vie for luxury flyers, both Delta and United have added more high-end seating to their planes to cater to travelers who deem worthwhile a $300 surcharge for a few inches of extra legroom on a cross-country round trip, or 10 times as much for a seat in business class.Bastian, a former auditor who said he took his first flight at age 25 for a business trip (New York to Chicago), is in charge of ensuring Delta lives up to its brand luster.On Wednesday, Delta will take its next shot in the battle for high-spending flyers when it opens its newest, highest tier of airport lounge at New York’s John F. Kennedy International Airport for passengers in its Delta One cabin, its top product that features lie-flat beds for longer flights.At more than 39,000 square feet it will be Delta’s largest lounge, accented with pillows that have the iconic zigzag motif of Italian fashion house Missoni, its new amenity kit partner. It features complimentary spa treatments, like ice globes and serum for jet-lagged eyes, along with showers, a full restaurant, and a deck overlooking the airfield, in a bet that travelers’ desire to treat themselves is here to stay.Delta is taking a page from the playbooks of United and American, which already dedicate their swankiest lounges to customers flying in long-haul busines …

Article Attribution | Read More at Article Source

[mwai_chat context=”Let’s have a discussion about this article:nnAn Airbus A330-323 aircraft, operated by Delta Air Lines.Benoit Tessier | ReutersDelta Air Lines is the country’s most profitable airline. CEO Ed Bastian’s challenge is to make sure his carrier stays on top.The airline’s unit revenue, the amount it brings in for every seat it flies one mile, outpaced its competitors’ last year. Delta’s share price has soared almost 23% in 2024, more than any rival in the rocky airline sector, in a rally that’s outdone the S&P 500’s. It expects free cash flow to rise as much as 50% this year to between $3 billion and $4 billion, and is eyeing a return to an investment-grade credit rating. And a stat any traveler would appreciate: Delta came in first in punctuality last year, with more than 83% of its flights arriving on time, according to the Transportation Department.Rival United Airlines — second to Delta in net profit margins — is circling. It says it could grow profit even more this year.”Knowing that there’s someone that thinks that they can take that mantle from us, that keeps us on our toes and keeps us continuing to drive hard,” Bastian told CNBC.Ed Bastian, chief executive officer of Delta Air Lines Inc., during an interview in New York, US, on Monday, Nov. 7, 2022. Bastian said that he sees ‘strong demand’ for flights carrying into 2023. Jeenah Moon | Bloomberg | Getty ImagesDelta has fashioned itself as America’s premium airline. It has won over hordes of splurging travelers, many of them carrying American Express cards, Delta’s cash cow of a partner that generated almost $7 billion for the airline last year. Sales growth of Delta’s roomier and more expensive seats continues to outpace revenue from standard coach.As they vie for luxury flyers, both Delta and United have added more high-end seating to their planes to cater to travelers who deem worthwhile a $300 surcharge for a few inches of extra legroom on a cross-country round trip, or 10 times as much for a seat in business class.Bastian, a former auditor who said he took his first flight at age 25 for a business trip (New York to Chicago), is in charge of ensuring Delta lives up to its brand luster.On Wednesday, Delta will take its next shot in the battle for high-spending flyers when it opens its newest, highest tier of airport lounge at New York’s John F. Kennedy International Airport for passengers in its Delta One cabin, its top product that features lie-flat beds for longer flights.At more than 39,000 square feet it will be Delta’s largest lounge, accented with pillows that have the iconic zigzag motif of Italian fashion house Missoni, its new amenity kit partner. It features complimentary spa treatments, like ice globes and serum for jet-lagged eyes, along with showers, a full restaurant, and a deck overlooking the airfield, in a bet that travelers’ desire to treat themselves is here to stay.Delta is taking a page from the playbooks of United and American, which already dedicate their swankiest lounges to customers flying in long-haul busines …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
Share This