The war in Ukraine has so far had no impact on the transatlantic traffic of Delta Air Lines and Virgin Atlantic and the carriers can “deal” with high fuel prices.
However, Delta Air Lines president and chief executive Ed Bastian said the increased fuel price would “have to be borne by customers at some point”.
Bastian insisted: “Delta is firmly in recovery mode, but we need to recognise the hardship we’re seeing [in Ukraine].”
Asked whether US travellers were worried about travelling to Europe because of the war, Bastian told an Aviation Club lunch in London: “US travellers are not worried about coming to Europe on Delta Air Lines.
“We’ve not seen any impact at all on US travellers to Europe.”
He reported: “On Tuesday last week Delta had the highest number of bookings in its history and the day after was the second highest.”
Bastian said demand had held up despite the rise in the fuel price, noting: “We’re not hedged on fuel. None of the major US carriers are hedged, so we need to pass that [increase] along in the market.”
He added: “There is a lot of pent-up demand, and customers are accepting higher prices.
“We’ve seen a $100-a-barrel oil price for a number of years and we’ve been quite successful.”
Shai Weiss, chief executive of Virgin Atlantic, Delta’s transatlantic partner, agreed: “We’re seeing very good signs despite Ukraine. Our bookings right now are back to 2019 levels on the [transatlantic] joint venture.
“UK-US traffic is very robust. There is very strong pricing.” Weiss added: “This industry has a proven ability to deal with high fuel prices.”
But he said: “The fuel price is at a 10-year high and a high fuel price is not good for the industry. It has a major impact. It means we need to think about pricing.”
Both airline bosses forecast business travel would return. Bastian reported: “Our corporate travel is already 60% back, with the US at a higher level than Europe or internationally.
“You can find as many reasons why business travel will be enhanced in the next years as hindered. We all reference back to 2019 as a benchmark, but we believe the economy is going to be meaningfully larger.”
Weiss said: “Corporate travel overall is up to 50% of the 2019 level, way ahead of what we were expecting. We forecast it would be back to 2019 levels only by 2024.”