Delta Air Lines CEO, Ed Bastian, says sustainable operations can be combined with good business decisions and a strong response to demand. Interview by Perry Flint.
Has the recovery been quicker and stronger than you expected and how are you coping with returning demand?
If you think back two years ago, the entire airline industry was forced to put down our operations essentially overnight as travel demand collapsed. If you flash forward to today, we’re seeing an entirely different picture.
Our customers are more excited than ever to be traveling and are looking to reclaim their lives after this challenging period. We’re currently seeing demand for consumer domestic travel that exceeds our 2019 levels, and we continue to see the acceleration and recovery of business and international travel as offices reopen and travel restrictions are lifting.
At Delta, we’ve been working hard to prepare for the months ahead. We’ve hired around 15,000 people since the start of 2021 to meet the travel demand. We’ve invested in digital tools that will help both our employees and customers navigate their needs efficiently. Lastly, we’re committed to investing in creating a more seamless travel experience that prioritizes well-being every step of the way. Our goal is for flying to be just as enjoyable as the destination.
What do your first quarter results tell you about the outlook for the rest of 2022?
Our March quarter results marked another important step in our recovery. In fact, the month of March brought the best cash sales we’ve seen in Delta’s nearly 100-year history. We’re optimistic about demand for summer travel but will remain nimble on capacity for the second half of the year. Overall, we are confident in our outlook for a meaningful full-year profit for 2022.
Have there been fundamental shifts in demand, markets, or business models over the past two years?
We’ve seen many shifts over the past two years. One area where we’ve seen significant growth is our premium products. They continue to lead the recovery, and we expect this seat growth to continue to outpace main cabin over the next few years. The introduction of Delta Premium Select on Transatlantic flights has been successful and exceeded our expectations.
Can you discuss how the Sky Way project at Los Angeles (LAX) fits into your hub strategy? What benefits will it bring for the airline and the traveler?
This past spring, we officially welcomed customers to Delta’s latest airport investment and expansion—the completion of Phase One of the Delta Sky Way at LAX project—a premier facility designed to meet the needs of modern travelers.
We’re very proud that this project was able to be completed 18 months ahead of schedule due to lower passenger volumes during the pandemic. Customers can now enjoy a centralized check-in lobby, security checkpoint, and baggage claim. We also just opened the first of three gates in the new Terminal 3, just in time for the busy summer travel season.
I encourage customers to stop by the new state-of-the-art Delta Sky Club as well. It’s one of our largest, complete with a Sky Deck that has an indoor and outdoor double bar, premium showers and more.
Delta’s infrastructure investments continue to roll out as our new Terminal C headhouse at New York-LaGuardia will open to passengers this summer. It will also feature a centralized departures and arrivals hall that will simplify the check-in, security check, and baggage claim touchpoints. The new Delta Sky Club at Terminal C officially becomes the largest we have at 33,000+ sq ft, which is only a tad bigger than the new Club in LA.
We’ve also had major airport projects coming online in Salt Lake City and Seattle. Needless to say, no matter what coast you’re traveling to or through, we’re delivering an elevated experience on the ground and in the air.
Has the crisis changed the relationship with your partners in the aviation value chain? What more can they do to aid industry recovery?
COVID has been incredibly difficult across the entire aviation industry and for so many businesses. I think we’ve all learned to appreciate those relationships, especially the value of face-to-face communication. Working with partner organizations is vital to our mutual success, and we’re all focused on recovering together.
Given the direction of the current US Administration in terms of its Competition Policy, are there any concerns that airlines could face potentially harmful government intervention in the market?
Competition in the US airline industry is as fierce as ever, with a diverse array of carriers offering record levels of service and benefiting the traveling public.
As our nation recovers from the pandemic, we are proud to continue offering competitive fares, unprecedented choice, and industry-leading customer service to travelers who are returning to the skies.
Can environmental sustainability be integrated into a positive business strategy?
It has to be. Protecting our planet for future generations is vital and needs to be integrated across all aspects of our business. We can’t walk out of this pivotal time in our history without a renewed commitment to safeguarding our world for the future.
Aviation is a hard to decarbonize sector, which is why we must all come together to create meaningful solutions. I strongly believe in the social good that travel produces by bringing people and communities together, while creating opportunities and connecting the world. That’s why we never want travelers to have to choose between seeing the world and saving the world.
In particular, what can be done to scale up production of sustainable aviation fuels?
Right now, sustainable aviation fuel (SAF) costs considerably more than conventional jet fuel, and the market is underdeveloped.
As an industry, we need the government and energy producers to help us ensure the advancement of production. This can in part be accomplished with a robust, long-term SAF-specific Blenders Tax Credit (BTC), which Congress and the administration must come together to pass.
We’ve set an audacious goal to replace 10% of jet fuel with SAF by the end of 2030, and we’re working with suppliers to secure nearly 400 million gallons over the next few years. It’s ambitious, but we envision a future of net zero aviation and are actively advancing policies and partnerships to get us there.
Do you see future generations still wanting to travel by air at the same level/frequency as we see today?
The world has become smaller and more accessible for every generation. I hear from young people every day who want to invest their time and resources in travel because they value the experience. It’s hard to see that changing—you can’t replicate the energy and feeling you get from traveling to new places or reconnecting with friends, family or business partners.
That’s why we’re committed to a vision of net zero aviation. We are working within our industry and beyond to help build a new future for aviation where travel and sustainability are not mutually exclusive.
How is Delta tackling diversity and inclusion?
At Delta, we’re boldly on the pursuit of equity through our actions and influence. We’ve been listening and learning from our people to become a better, more equitable company.
A recent initiative that I’m proud of is how we’ve committed to removing unnecessary barriers, like degree requirements, from our hiring process. This is happening through a “skills first” focus, and these programs give our employees the resources to develop and excel.
Beyond this initiative, we’re sharing ongoing progress reports that detail our actions to end systemic racism. I’ve also been having important conversations to learn more about what I can be doing through our Gaining Altitude discussion series, meeting with our Black Employee Resource Group and with our Diversity, Equity & Inclusion team. We’re focused on specific, measurable goals and being transparent with our people and stakeholders about our progress.