New Banking Clients, New York Presence Lift Delta's Corporate Revenue - Business Travel News

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New Banking Clients, New York Presence Lift Delta's Corporate Revenue

January 22, 2013 - 01:15 PM ET

By Jay Boehmer

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.

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