Leisure travel demand is good and business travel is on the mend says Delta Air Lines CFO

Delta Air Lines CFO Dan Janki told the Wall Street Journal in an interview that leisure travel demand remains encouraging, business travel is on the mend.

“It’s still not at the level we want, but it will continue to get better,” he said in the interview, noting that the resilient overall demand amid inflationary pressures is promising. Janki added that a slowing economy could be positive for the airline “as more companies might decide to send their sales and other executives to see clients in person” amid a more cutthroat competitive environment.

Further, margins are expected to improve as the company right-sizes capacity and reduces spending plans. Janki pointed to new analytics-focused programs to improve efficiency as key to achieving operating margins “in the midteens.”

He also told the paper that debt reduction plans are progressing well.

“We are keenly focused on continuing to strengthen the balance sheet and drive debt down,” Janki told the outlet.

The company plans to reduce net debt to $15B by 2024, versus the nearly $23B presently on the books. He added that the vast majority of debt is fixed rate, alleviating the risk of rising rates to a large degree. WSJ