To Hear CEO Ed Bastian, It’s Delta’s World, We Just Live In It
For Delta Air Lines, a lot of things changed in the pandemic, but one thing stayed the same: CEO Ed Bastian still touts that his carrier leads the U.S. airline industry. Here’s his most recent proof. Delta has signed its pilot contract, while rivals teeter as they approach the finish line. Also, Delta has decided that the major airlines will have free Wi-Fi. And Delta generates half of the industry’s profits.
Speaking this week to a J.P. Morgan investor conference, Bastian said that after signing a pilot deal, “We’re now focused on the marketplace. We’re no longer focused on how to get the contract done.” When it took effect on March 2, the Delta contract was immediately recognized throughout the industry as the template for all future contracts, and while both American and United have publicly committed to move quickly, both carriers are still negotiating with pilots.
As for Wi-Fi, on Feb. 1, at the Consumer Electronics Show in Las Vegas, Bastian announced that Delta would offer free Wi-Fi on all its flights. Like the pilot deal, that set the template for the industry, as Delta became the first of the big four carriers to promise free Wi-Fi, long offered by JetBlue. But the quality of airline Wi-Fi often leaves passengers unsatisfied. “With all the innovation and investment in air travel and our industry over time, there’s one unmet question that still remains to be solved: ‘Why does inflight Wi-Fi suck so bad?’” Bastian said Tuesday.
“The reality is, it’s hard,” he said. “It’s a tough thing. It’s great when you’re sitting on the ground and you’re able here in this room to call up anything you want and be connected to anywhere in the world you want. You go up in the sky and you’re traveling at 500 miles an hour, it’s a little more difficult.” During the pandemic, Bastian said, Delta switched its service provider to ViaSat. The carrier now provides free Wi-Fi for 80% of its domestic seats and plans to have Wi-Fi on all international flights by the end of 2024, he said.
It seems clear that Bastian and Delta have spent time thinking about free onboard Wi-Fi. On Tuesday, Bastian discoursed on why it’s important. He said Delta is in “the experience business, we’re in the connected world, (and) the only place you’re not connected is in the sky.” Some people like that, he said: “They don’t want to be found by their boss, they don’t want to be bothered by their spouse or whatnot. We’ve ruined it for them.” But in general, people especially younger people want to be connected.
Delta carries 200 million passengers a year, most for several hours, “We have them seat-belted in, facing forward, they can’t move and they’re bored out of their minds. This to me has always been the gold mine.” Over the past three years, he said, Delta has invested $1 billion in updating its Wi-Fi capabilities. Starting in April, it will upgrade content to include the Paramount Plus library, along with New York Times puzzles and Atlas Obscura, a travel website. To access content, passengers must join Delta SkyMiles.
Delta has about 25 million annual passengers whom it knows little about, Bastian said. But now it can learn. Since November, when Delta started a soft launch of its new Wi-Fi programming, 300,000 people have signed up to be SkyMiles members. Their average age is 32, six years younger than overall SkyMiles average. “We know that we’re building loyalty that’s going to last generations by doing this, which is another reason why it’s free,” he said.
To symbolize its place in the world, Delta has taken to being the first airline to report financial results each quarter. On Tuesday, Bastian was the first airline CEO to present at the J.P. Morgan conference, where the top airline CEOs all gathered. “Somebody asked me this morning why Delta usually has the privilege of going first,” said JP Morgan analyst Jamie Baker. “I explained it’s comparatively simple. As an airline, you need to generate half of the industry’s profit, you have to pay out more in profit sharing than every other US airline combined, and then you get the opening slot.”Subscribe Now to Airline Weekly
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