2021 was a bridge year for the aviation industry. As vaccines became widely available, people began to feel comfortable flying again….eventually.
It took some time for travelers, in general, to return to airports, but by January 2022, demand for flights had increased by 82.3% from the same time period a year ago.
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The demand for travel continued to build throughout 2022, as it was clear that after a year and a half, at least, of being stuck inside, people wanted to make up for lost time by seeing old friends and exploring new places. By the end of the year, the International Air Transport Association reported that total traffic rose 64.4% compared to 2021. In North America in particular, annual traffic rose 130.2% compared to 2021, and capacity increased 71.3%.
Delta Is About to Up its Premium Seat Availabilities
Now, Delta Airlines (DAL) is betting big that the demand for travel will only increase -- and that people will be willing to spend more to make those flights as comfortable as possible.
Delta Chief Executive Ed Bastian has said that the airline will have premium seats on every plane it flies starting this summer, reports Skift, which notes that at the moment, dozens of Delta’s 50-seat planes, or about 2% of Delta’s fleet, do not currently have that luxury feature.
A number of planes are currently being retrofitted to add more platinum seats, and the airline plans to offer 15,000 more premium seats a day than it did pre-pandemic.
Delta Is Betting Big On Premium
Like every other airline, Delta has to shell out to attract and train a new generation of pilots and flight attendants, to replace the people who retired or quit during the pandemic. The airline is also being hit by both the rising price of jet fuel, increase in labor costs, and other add-on effects of inflation, which is causing ticket prices to increase.
But Bastian thinks the demand for premium seats is durable, and can help the company weather economic headwinds, as he expects revenue to increase by 1-2% each year for the next several years due to premium cabins. Premium seats are often twice as expensive as regular ones, and can be seven times more profitable for airlines than any other cabin.
Premium cabins will soon make 30% of seats on Delta’s flights, up 2% from 2019. When Boeing's new 737-10 planes arrive, and they are scheduled for delivery starting in 2025, then Delta’s fleet will be 35% premium seats.
The downside of this is that something has to give, and Delta will be reducing the amount of low-fare basic economy seats it offers, which now make up less than 5% of Delta’s seats. But luckily for budget travelers, Spirit is rapidly expanding, so you can always just suck it up and go with them.
