Delta Air sees healthy demand, especially on international routes

By Lisa Barrington and Rajesh Kumar Singh

DUBAI (Reuters) -Delta Air Lines is running its largest ever transatlantic schedule this year as it sees healthy travel demand, especially on international routes, senior executives said on Saturday.

Delta, one of the largest U.S. airlines, has forecast record high second-quarter revenue thanks to buoyant demand for spring and summer travel.

“Summer’s progressing strongly and demand is quite healthy,” CEO Ed Bastian told reporters.

“Demand is growing faster internationally than it is domestically, and Delta is very well positioned to take advantage of that with its partners,” Bastian added.

Delta says consumers are spending on experiences with travel a top priority after the pandemic.

Demand is particularly strong for premium travel, benefiting carriers like Delta.

“We have seen continued strength through the spring to early summer … our international business is quite strong,” Delta President Glen Hauenstein told reporters.

Rival American Airlines (NASDAQ:AAL), however, said this week there was still excess seat capacity in the domestic market, resulting in discounting pressure.

U.S. carriers have plans to further moderate capacity in the second half of the year, which airline executives say will underpin the industry’s pricing power.

BOEING

Delta operates a large mixed fleet including planes from Airbus and Boeing (NYSE:BA), which is engulfed in a quality and corporate crisis.

Bastian said Delta is “encouraged” by steps Boeing is taking with management changes and other adjustments at the company.

“I’m confident we will see improvement,” Bastian said, adding Delta was still committed to its order for Boeing 737 MAX 10 jets.

Delta currently does not fly any version of the Boeing MAX but has MAX 10s on order for delivery next year. The MAX 10 – the largest version of Boeing’s best-selling narrowbody jet – is still awaiting certification by the U.S. Federal Aviation Administration (FAA).

A January mid-air cabin panel blowout on an Alaska Airlines MAX 9 flight has placed a question mark over the certification.

Rival United Airlines has asked Boeing to stop producing MAX 10 for it and has converted a portion of its order to the MAX 9.

Bastian said Delta has no plans “at this point” to swap the MAX 10 for another model, adding he hopes the changes being made at Boeing will allow it to make progress on building the MAX 10.

“We are scheduled to receive them next year, I don’t anticipate seeing them for quite some time,” he said.