Delta Air Lines' corporate travel booking volumes rose 3% year over year during the second quarter, though "that was largely offset by fare pressure," President Ed Bastian said during a Wednesday earnings call.
The weakness in corporate pricing aligns with Delta's broader results for the quarter. The airline has continued to benefit from year-over-year declines in fuel expenses, but passenger unit revenue for the quarter fell almost 5% year over year, and passenger yield, a representation of fare paid per mile, fell almost 4%.
Delta executives called out Chicago, Dallas and Orlando as underperforming markets for yield. Bastian, meanwhile, also highlighted yield weakness for close-in bookings, which business travelers tend to make at a higher rate.
"If you look at where the weakness is, it is not in corporate demand," Executive Vice President of network planning and revenue management Glen Hauenstein said. "It is in the yield that we're obtaining from corporate demand. Corporate demand remains very, very strong even out of these cities that have had this yield impact."
For the three months ending June 30, Delta's total passenger revenue fell 1% year over year, as total expenses, anchored by declining fuel costs, fell 9%. For the quarter, Delta posted a $1.5 billion net income, up from $801 million for the prior-year period.
Meanwhile, to "stem the erosion of unit revenues," in the words of Bastian, the airline plans to hold capacity levels flat during the fourth quarter of 2015 compared to the same period in 2014.
Source: Business Travel News