Citing big client wins,
particularly in the banking sector, and a growing presence in New York, Delta
Air Lines reported that December quarter corporate revenue jumped by nearly 10
percent year-over-year. In a Tuesday conference call with analysts and media,
president Ed Bastian said that performance came "against a marketplace
that was pretty flat in terms of overall corporate travel spend."
While Delta "saw strong
growth across most industry sectors," Bastian pointed to an astounding 31
percent increase in revenue from the banking sector, "the result of new
contracts that were effective in the December quarter and our buildup in New
York."
Bastian said the carrier in the
past six months signed a new corporate deal out of New York with "one of
the largest banks in the world," a client that was not identified, with
which Delta "never previously had a corporate arrangement."
While new facilities in New
York and investments in premium products should appeal to banking clients,
Delta executives claimed the pending transaction with Virgin Atlantic would "further
enhance our position in New York."
In particular, the joint
venture addresses Delta's service gap on the New York-London route, perhaps the
most heavily trafficked in the world by lucrative banking clients. Executing
the deal with Virgin Atlantic, however, likely will eat up much of the 2013
calendar.
Senior vice president and
general counsel Ben Hirst during the conference call said Delta and Virgin
Atlantic expect this month to file their antitrust immunity request with the
U.S. Department of Transportation—one of several regulatory bodies that would
have to sign off on the deal. The carriers also must undergo competition
reviews by the U.S. Department of Justice and the European Commission, as well
as a U.K. review of Delta's agreement to purchase a 49 percent stake in Virgin
Atlantic.
"We're hoping that these
reviews all come together within a six-month timeframe," said Hirst, which
would keep the carriers on track to launch the joint venture by year-end.
The airlines by the end of
the third quarter expect to share codes and begin frequent flyer program reciprocity,
said executive vice president of network planning and revenue management Glen
Hauenstein.
In other improvements to
entice the New York-based baking sector, Delta in May expects to open its new
terminal at New York JFK. The carrier also upgraded facilities at New York
LaGuardia, where it recently connected its Terminal D to Terminal C, which
houses operations using slots acquired in 2011 from US Airways.
Delta by the end of the year
also expects that 85 percent of its international fleet will be outfitted with
lie-flat beds.