Delta Air Lines has experienced “significant” negative changes in business travel as a result of recent strikes in the U.S. auto and movie industries.
The Atlanta-based airline said in a quarterly earnings call with industry analysts on Oct. 12 that leisure travel across its network, particularly internationally, remains strong, but business travel to and from hubs in Detroit and Los Angeles remains strong. said it has been hit hard by widespread business suspensions.
Hollywood actors and screenwriters went on strike earlier this year demanding higher pay and better conditions, fearing their incomes would decline due to the increased use of streaming media and artificial intelligence tools. In Detroit, the United Auto Workers union last month launched a labor action to negotiate new contracts with three of the nation’s unionized automakers: Ford Motor Co., General Motors Co. and Stellantis.
Delta Air Lines President Glenn Hauenstein said the strikes combined had a “mild impact” on revenue. “There’s been quite a bit of change” in his travels between Los Angeles and Detroit, he added.
“We are a very large company in both of these areas,” he says. Among major U.S. airlines, “we are probably the most influenced by these two divisions.”
But while the business travel segment has struggled with the disruption, executives say demand for leisure travel, particularly to Europe, has been impressive.
“We are excited about the extended travel season in Europe,” says Hauenstein. Travel demand remains strong during the year-end and New Year holidays. “The downturn for Europe is really only six to eight weeks.”
In Latin America, “leisure remains very strong, even after the slow and slow seasons.” Mexico, in particular, has “incredible demand from the business sector” and is “a huge source of strength for us,” Hauenstein added.
In Asia, the airline continues to rebuild its network into China as demand increases four years after Covid-19 brought global flights to a near standstill. . Hauenstein said Delta Air Lines is “very excited” about its Incheon hub in South Korea, especially connections between the United States and Southeast Asia.
South Pacific was “a really big surprise” for Delta. Demand for leisure destinations continues to be high. “Like Japan, it’s doing very well, and it’s bringing in big profits,” Hauenstein said.
Delta Air Lines achieved “record profitability across all of its international operations,” Hauenstein said.
Delta Air Lines reported on the same day that its third-quarter profit rose 59% year over year to more than $1.1 billion, with revenue up 11% year over year to $15.5 billion from just under $14 billion. Passenger revenue he increased by 14%.
Delta’s domestic revenue rose just 6% in the third quarter from a year earlier, but transatlantic flights were up 34%, Latin America flights were up 20% and transpacific flights were up 65%.