Delta Sees Small Uptick in Bookings, a Glimmer of Hope for Travel Industry

The airline's CFO cautioned against calling it a recovery


Key insight:

Although there’s not yet a light at the end of the tunnel for the travel industry, there are small inklings of hope. At Delta Airlines, that’s come in the form of a slight increase in bookings.

“We have seen a bounce off the bottom,” said Delta CFO Paul Jacobson at Wolfe Research’s annual (though, this year, virtual) Global Transportation & Industrials Conference today. “There are reasons to be encouraged about what we’re doing at Delta.”

Jacobson said that on some days the airline saw positive net sales, meaning more people were booking than asking for refunds, specifically pointing to an uptick in June and July travel planning.

Of those bookings, most were to leisure destinations, especially beaches, and what Jacobson called “activity out West.” Delta has since responded to the inching demand by adding back flights, but still capping its capacity at 60%.

Delta wasn’t the only one sharing some positive news. This morning, United Airlines told investors in a filing that as of this week, the airline had “seen a reduction in customer cancellation rates” and a “moderate improvement” in domestic demand as well as “certain international destinations” in the latter part of Q2.

Jacobson prefaced his comments by noting that it was still too early to tell if this was truly a sign of recovery, and that with refunds still available, the bookings don’t quite mean much until travelers are boarded and buckled in. “We’re still a fraction of where we should be,” he said. “We’re cautious.”

He also echoed Delta CEO Ed Bastian’s belief that it could take at least three years before the airline reached sustainable recovery levels. The company has seen more than 40,000 of its employees take voluntary unpaid leave, and more cuts could follow after the Sept. 30 mandate set by Congress that airlines could not lay off employees until then in exchange for federal funds in the coronavirus stimulus package.

On Friday, the Transportation Security Administration announced that for the first time since the end of March, more than 250,000 travelers passed through its gates in a single day. Previously, the TSA had reported that it had seen foot traffic drop by 95%.

For the moment, Delta is still trying to reduce its “cash burn” to zero by the end of the year, which could mean that any spend on advertising isn’t likely. As Jacobson put it, “Every dollar we save is a dollar we don’t have to borrow tomorrow.”

As far as hygiene, Jacobson doesn’t expect cleanliness to be a differentiator for airlines. Still, it’s one of the few ways airlines are continuing their messaging without traditional advertising. Jacobson joked that Delta’s old slogan from the ’60s was now more relevant than ever: “We’re ready when you are!”

@RyanBarwick Ryan is a brand reporter covering travel, mobility and sports marketing.