Delta Air Lines has placed an order with Airbus for 20
A350-1000 widebody aircraft with an option for 20 additional widebody planes,
the carrier announced Friday. Deliveries are expected to begin in 2026.
Financial terms of the agreement were not disclosed.
“These planes complement our fleet strategy and will
offer a world-class customer experience for international travelers with more
premium seats, higher gauge and great customer amenities,” Delta CEO Ed
Bastian said during a Friday fourth-quarter earnings call. “These aircraft
are over 20 percent more fuel efficient than the [Boeing] 767s they will be
replacing, further supporting our long-term sustainability goals.”
The aircraft primarily will be operated in long-haul markets
and international hubs to support Delta’s international expansion, according to
the carrier. Each aircraft will have about 15 percent more premium seats than
previous planes, be quieter, and have high ceilings with expanded overhead bin
space.
With the new agreement, Delta has 284 narrowbody and 48
widebody aircraft on order for delivery in the coming years, according to the
carrier.
Steady Corporate Demand
Delta saw the corporate segment gain share during the year,
Delta president Glen Hauenstein said. “Corporate sales accelerated into
year-end, including double-digit year-over-year growth in the month of
December,” he added.
Technology and financial services led the corporate momentum
for the quarter, with media and auto sectors “seeing notable
traction” following the resolution of each industry’s strikes.
“We had a number of [corporate] laggards, technology
being by far the largest in terms of having not returned to travel, and we are
finally starting to see tech companies traveling again,” Bastian added,
reiterating that entertainment and the auto industry also are “starting to
rebound.”
Bastian credited a return to office for some of the
corporate travel growth. He also noted that consulting companies had also been laggards,
saying that clients have had their offices somewhat reduced, but that office
hours opening is helping that sector.
Overall, Delta’s corporate business is at “post-pandemic
highs,” according to Hauenstein, and is “somewhere around 90 percent
restored to pre-pandemic levels as we head into this year. That is an exciting
backdrop for a domestic turnaround,” he said.
Further, in Delta’s most recent corporate customer survey,
nearly 95 percent of respondents expect to travel as much or more in the first
quarter of 2024 as they did in the fourth quarter of 2023, Hauenstein said.
“This is a double-digit improvement in travel intentions from our last
survey.”
Q4, Full-Year 2023 Metrics
Delta reported record fourth-quarter operating revenue of $14.2
billion, a 5.9 percent increase year over year. Full-year 2023 revenue was a
record $58 billion, up 15 percent from the $50.6 billion reported in 2022. The
quarter’s passenger revenue was $12.2 billion, up 12 percent year over year. Full-year
passenger revenue was $48.9 billion, a 22 percent increase from a year prior.
Net income for the fourth quarter was $2 billion compared
with $828 million a year prior. Full-year net income was $4.6 billion, up from
$1.3 billion reported a year ago. Average fuel costs were $3.01 per gallon for
the quarter and $2.82 for the year.
Delta first-quarter guidance projected revenue to be up between
3 percent and 6 percent year over year, or between $12.2 billion and $12.6
billion. Capacity is expected to be up 6 percent compared with Q1 2023, while
full-year capacity is projected to be up 3 percent to 5 percent versus 2023. First-quarter
fuel costs are estimated to be $2.50 to $2.70 per gallon.
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Q3 performance
