Delta CEO sees ‘great bargains’ spurring spring travel rebound

Delta Air Lines Inc. expects low ticket prices to be widely available as vaccines begin to corral the coronavirus pandemic over the next 90 days, triggering a spring surge in travel demand for the battered industry, Chief Executive Officer Ed Bastian said.

“There’s going to be great bargains,” Bastian said at Bloomberg’s The Year Ahead conference Wednesday. “When the demand comes, that’s when there will be an opportunity to firm up pricing. But for now, it’s OK. Pricing is going to lead the recovery,” including at hotels and cruise lines.

Delta has led U.S. carriers in emphasizing an upbeat outlook once it gets through a bleak winter, forecasting that it will halt its cash burn in the second quarter and have a “good shot” at turning a profit in the third. But with domestic travel stuck at about 40% of 2019 levels, the timing depends on growth in coronavirus vaccinations. A resurgence of international demand, which has been harder hit, is about a year off, Bastian said.

The U.S. on Tuesday began requiring negative coronavirus tests for anyone flying into the country from abroad. That’s creating some “choppiness in demand,” especially for popular beach destinations in Mexico and the Caribbean, because of a lack of widespread testing capacity, Bastian said.

In the longer term, the requirements are a prudent measure to give travelers confidence that it’s safe to cross borders. A testing mandate domestically wouldn’t be practical because of the large number of travelers, he said.