Flying coach? Your dollars mean less to Delta Air Lines than they used to.
The economy class cabin is generating about 48 percent of Delta's revenue, down from 63 percent six years ago, Delta told investors on Thursday. While coach is still the largest source of the airline's revenue, the share of revenue generated from premium cabins like first and business class has nearly doubled to about 32 percent. Revenue from Delta's co-branded credit cards with American Express has also climbed.
"The margin that we get on all those products are substantially higher than the overall system average," CEO Ed Bastian said at Thursday's investor day, referring to premium cabins. The second-largest U.S. airline is investing more in its premium seating, adding suites with closing doors at the front of planes used for international flights.
Business travel spending in the U.S. last year increased 3 percent to $292 billion, and will likely expand around 4 percent over the next five years, according to the Global Business Travel Association, an industry group.
Delta is reaping the benefits of that robust corporate travel demand and a strategy of selling seats at the front of the plane, instead of offering them as free upgrades.
The carrier used to sell about 13 percent of its first-class seats and now sells 60 percent, Delta's president, Glen Hauenstein, said during an earnings call in October.
