it should come as no surprise to anyone who travels by air with any regularity that the airline industry has been possibly the worst hit business sector due to the worldwide COVID-19 pandemic. Air carriers around the globe have spent the last year trying to survive, with any thoughts of profitability being immaterial. Multiple congressional cash infusions have kept the U.S. industry afloat and saved tens of thousands of jobs, but thousands more have been lost, possibly permanently.
Industry behemoth Delta Air Lines is no exception, even with a strong balance sheet entering 2020, and big plans to grow its fleet and route structure. LIke every airline around the globe, keeping the doors open has been the 24/7 priority since March of last year.
Now, with a glimmer of light at the end of the tunnel primarily due to several effective vaccines now being administered, Delta is adjusting who they will be in the coming years. A majority of airlines will come out of the pandemic with a smaller footprint, and Delta is no exception. While there’s no doubt that the Atlanta-based carrier will continue to be a world leader, it will also be smaller, at least until demand recovers. Industry experts don’t expect to see 2019 levels of air travel return before at least 2024.
Delta’s President Glen Hauenstein recently advised investors that just two of its five “focus” cities, Austin and Raleigh-Durham, will retain that designation. Nashville, San Jose and Cincinnati will be the losers in this realignment, with fewer flights planned. He also confirmed that the airline’s primary hubs in Atlanta, Detroit, Salt Lake City and Minneapolis-St. Paul, will continue to play key roles as the airline charts its future course. Other strong performers including Los Angeles, New York (LGA and JFK), Boston and Seattle, are beginning to see a domestic recovery as well. Returning to some sense of normalcy, whatever that means, will be a long, drawn out process that will undoubtedly take years.
Because AUS and RDU are strong business travel destinations, it is expected that capacity will return slower than at the other hub and primary airports. Delta’s system capacity was down 36 percent in the first quarter of 2021, but capacity at Austin was reduced 38 percent, and at Raleigh-Durham, a startling 50 percent.
Certainly, the other mega-carriers, United, American and Southwest will also be making major adjustments post-covid, and the airline industry and route systems that we have known so well, will look very different come 2022. Most airlines appear to have survived, but merely surviving isn’t going to cut it in the exceedingly competitive recovery years.