Delta Air Lines is reporting stabilizing market conditions as it moves into the third quarter. As such, it has reinstated its guidance for Q3, and is expecting better than forecasted performance through the back end of the year. However, the airline has not reached a decision on whether to mandate employee vaccinations yet, making it one of only two major US airlines to still be on the fence.
Delta CEO says conditions are stabilizing
Delta Air Lines has reported improving ticket sales and has reinstated its Q3 guidance as the market begins to stabilize again. It is targeting revenues in the quarter sitting around 30 – 35% lower than the same quarter in 2019, representing an improvement over its previous forecast.
Speaking on the sidelines of the IATA AGM in Boston, as reported by Reuters, CEO Ed Bastian commented,
“For Delta, they bottomed out in the later part of August and the first part of September. Business traffic is growing back in the U.S.”
However, one issue is still dividing Delta from its United States counterparts, and that’s employee vaccination. The airline has not mandated staff to get the shot, although it has been encouraging such action. The airline implemented a $200 monthly health insurance surcharge for those who had not been vaccinated.
Delta says that its staff vaccination rate is now up at 84%, likely driven by the health insurance premium. Bastian commented that he expects this to be above 90% by November 1st. However, he has still not reached a decision about whether to mandate vaccination for employees or not.
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Decision needed soon
With three more major US airlines joining those deciding to mandate employee vaccinations, only two remain on the fence about this issue. Delta Air Lines and Southwest are the two holdouts, both of whom are meeting some resistance from unions to going ahead with such a move.
But these airlines will have to make a decision soon. Just today, Reuters has reported that the White House is pressing all US airlines to mandate staff vaccination by December 8th. This is the date that has been set for federal contractors to make vaccinations obligatory, and given that large US airlines often have a number of federal contracts, they are being urged to do the same.
The White House COVID-19 response coordinator Jeffery Zients told a press briefing last week that,
“Employers should act now to protect their workforce. More and more companies are stepping up to make vaccine requirements the standard across all sectors.”
In a separate conversation, he encouraged airlines to act sooner rather than later, citing United Airlines’ strong message and action as a case study worth following.
Last week, Alaska Airlines and JetBlue joined United, Hawaiian and Frontier in announcing vaccine mandates, with all saying they will comply with the federal requirements. American Airlines indicated that it will mandate vaccination, but didn’t give a compliance date.
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