Delta Air Lines has cast doubt on hopes of opening an air “corridor” on the lucrative route between New York and London, saying it would be easier to relaunch transatlantic flights to “just about any” other European capital.
The route has been among the busiest and most profitable for carriers including British Airways and Virgin Atlantic, and is a priority for US airlines working to open up such corridors, which could exempt passengers from quarantining on arrival.
But Ed Bastian, Delta’s chief executive, told the Financial Times that it would be easier to open such a corridor to almost any other European hub than London.
“I think you will find on the continent several countries that are more open,” he said, pointing to parts of southern Europe that rely more heavily on tourism revenues. As most domestic passengers flying into New York also face a 14-day quarantine “I think New York-London is complicated”, he said.
Testing passengers so governments felt safe to lift quarantine restrictions was critical to reviving demand for international flights, Mr Bastian said, adding that some corridors to Europe would already be open had Covid-19 cases not climbed so steeply in recent months.
On November 16 United Airlines began offering free rapid tests before some departures from Newark to Heathrow, pitching the four-week pilot programme as “a good proof-of-concept for governments around the world.”
Passengers on the flights are still subject to UK quarantine rules, though the UK government is expected to announce plans to cut quarantine for incoming passengers from 14 days to about a week in the coming days.
US airlines have seen a stronger recovery on domestic than international routes, but Mr Bastian said Delta’s US traffic around Thanksgiving on Thursday would only be 35-40 per cent of last year’s level. The US Centers for Disease Control and Prevention on Thursday recommended that Americans not travel for the holiday, which is usually one of airlines’ busiest periods.
Mr Bastian cautioned that traffic could remain subdued throughout Christmas and New Year because of recent rises in coronavirus cases. “I’m not sure we’ll see as much of an increase as we were expecting a month ago,” he said.
He struck a more optimistic note on business travel, where demand remains depressed and Microsoft co-founder Bill Gates has predicted that the post-pandemic era will see more than half of business trips “go away”.
Video conferencing was “a forced substitute” to doing business face-to-face, Mr Bastian said, and smaller business owners still needed to travel to find new customers. “I think business travel’s going to be strong on the way back,” he said: “Bill Gates is not a road warrior . . . he’s not the person to be forecasting that.”
Delta was still burning through $10m of cash a day but had reduced this rate from $100m a day in March, Mr Bastian said. He predicted that it would be generating free cash again by next spring, and would not need to raise new debt or equity even if talks on new stimulus measures remain stalled in Washington.
The airline raised $30bn earlier in the crisis and has cut its labour bill by almost 40 per cent thanks to 40,000 employees taking voluntary leaves of absence and another 20 per cent taking early retirement.
Delta did not have Boeing’s 737 Max in its fleet when it was grounded after two fatal crashes but Mr Bastian offered a vote of confidence in the model as US regulators cleared it to return to service.
“We’re talking to Boeing about lots of different things, the Max included,” he said: “If there is an opportunity where we would feel comfortable acquiring the Max we’d have no hesitation doing that.”
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