July 20, 2024

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Delta, United compete to be America’s luxury airline

2 min read

A Boeing 767 passenger aircraft of Delta Air Lines arrives from Dublin at JFK International Airport in New York as the Manhattan skyline looms in the background on Feb. 7, 2024.

Charly Triballeau | Afp | Getty Images

Delta Air Lines is the country’s most profitable airline. CEO Ed Bastian’s challenge is to make sure his carrier stays on top.

The airline’s unit revenue, the amount it brings in for every seat it flies one mile, outpaced its competitors’ last year. Delta’s share price has soared almost 23% in 2024, more than any rival in the rocky airline sector, in a rally that’s outdone the S&P 500‘s. It expects free cash flow to rise as much as 50% this year to between $3 billion and $4 billion, and is eyeing a return to an investment-grade credit rating. And a stat any traveler would appreciate: Delta came in first in punctuality last year, with more than 83% of its flights arriving on time, according to the Transportation Department.

Rival United Airlines — second to Delta in net profit margins — is circling. It says it could grow profit even more this year.

“Knowing that there’s someone that thinks that they can take that mantle from us, that keeps us on our toes and keeps us continuing to drive hard,” Bastian told CNBC.

Ed Bastian, chief executive officer of Delta Air Lines Inc., during an interview in New York, US, on Monday, Nov. 7, 2022. Bastian said that he sees ‘strong demand’ for flights carrying into 2023. 

Jeenah Moon | Bloomberg | Getty Images

Delta has fashioned itself as America’s premium airline. It has won over hordes of splurging travelers, many of them carrying American Express cards, Delta’s cash cow of a partner that generated almost $7 billion for the airline last year. Sales growth of Delta’s roomier and more expensive seats continues to outpace revenue from standard coach.

As they vie for luxury flyers, both Delta and United have added more high-end seating to their planes to cater to travelers who deem worthwhile a $300 surcharge for a few…

2024-06-25 12:05:17

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