Delta Air Lines is trying to protect itself against a possible economic downturn.
Airline CEO Ed Bastian told Reuters News Service he will use one of the oldest tricks in the business book. That is, he will charge more for seating.
To that end, as soon as this summer Bastion said, every Delta flight will carry premium seating.
It’s just one way for the airline to protect against what is expected to be a further economic downfall. Bastian said Delta will offer about 15,000 more premium seeds per day than it usually does. Jose, which reports earnings on Thursday, has, for years, been the most profitable major U.S. carrier.
"It also takes us out of the commodity trap, where we're just trying to win this battle based only on price," he said in an interview with the news service.
In effect, he is willing to bet that any increased income from people who are willing to pay more for a premium seed will offset those who will not pay for a premium or decline to pay for even an economy seat. He is not the only one.
United and American Airlines will both increase premium seating but plan to do it by 2026. Only Delta is more ambitious and sees an economic downturn ahead. "Travel at large, not just in terms of air travel, but the entirety of it is holding, if not growing as a percentage of overall GDP," Vasu Raja, American's chief commercial officer said. "It's really striking in this world that we're in where inflation is high."
To be clear, it’s a modest increase for Delta. Bastion says premium seating will only account for one to 2 percent of its total sales. But according to Reuters News Service, premium seating can be up to seven times more profitable than economy seating.
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