Delta Lowers Fares to Entice More Passengers

After having successfully cut its daily cash burn by 75 percent from $100 million at the height of the pandemic this past spring, Delta Air Lines is lowering fares as it looks to entice more passengers.

“We expect in the spring we will be back to positive-generating cash flow,” Delta CEO Ed Bastian said, according to 11Alive TV in Atlanta, Delta’s hub. “The vaccine cannot come soon enough, and that is going to be the key to getting confidence back in travel and people back out in public.”

Delta has been financially prudent during the last nine months. It has eliminated 380 planes from its fleet and has sliced its work force almost in half by offering early buyouts and voluntary unpaid leaves of absence.

“Our people have taken voluntary unpaid leaves of absence, with over 40,000 of our people taking virtually the entire summer off without pay – and that’s half our team,” Bastian said. “We had 20 percent of our people early retire, so we have clearly reduced the size of the airline by a meaningful amount.”

Now Delta’s daily cash burn is down to $24 million and Bastian says it could drop to $14 million a day by the end of the year. In addition, he expects prices to drop.

“For the holidays, I’d expect fares are actually going to be at a very good level for consumers. They actually are going to be lower than they were year-over-year,” Bastian said.

Delta will continue its policy of keeping middle seats in coach empty through the end of March.

“Having the middle seat open is really an important feature for them (the passengers), giving them more space and more distance on the plane, particularly for many of the customers who are still coming back for their very first trip over the course of the winter and into the spring,” Bastian said.