Delta Air Lines executives on Tuesday reported a “modest improvement” in corporate demand, though third-quarter business travel volumes remained a small fraction of pre-pandemic levels.

The carrier reported $3.1 billion in operating revenue for the third quarter, down 76 percent year over year. That demonstrates a “steady improvement” from the second quarter, when revenue was just 10 percent of 2019 levels, Delta CEO Ed Bastian said in an earnings call. Bastian said that trend will continue into the fourth quarter, projecting revenue rising to reach about a third of 2019 levels.

A rebound in business travel remains necessary for a “meaningful step up in demand,” along with a loosening of local and national quarantine and travel restrictions, Bastian said. Third-quarter business travel volume was about 15 percent of its prior-year level but was “trending up across all industries,” which is expected to continue into 2021, president Glen Hauenstein said. Similar to numbers reported by Southwest Airlines’ sales leader last week, Bastian said about 90 percent of Delta’s primary corporate customers “do have travelers who are traveling … in small numbers, but they are getting a new sense of the travel experience.”

Those returning business travelers are contributing to increasing overall levels of comfort with returning to air travel amid Covid-19, buoyed by the industry’s track record during the pandemic, Bastian said.

“With over 1 billion air travelers worldwide in 2020, there have only been 44 documented cases of suspected Covid transmission onboard an aircraft, and virtually all of them were in the early months of the pandemic before masks and revised safety protocols came into existence,” he said, citing data from the International Air Transport Association. “We carry at Delta over 1 million people a week and have had no documented transmission onboard any of our aircraft.”

As that confidence improves, Delta eventually will be able to lift its policy of blocking middle seats, which Bastian said he had “no doubt” would happen within the first half of next year.

Delta reported a net loss of $5.4 billion for the quarter, compared with net income of $1.5 billion in the third quarter of 2019. Cash burn for the quarter averaged about $24 million per day and $18 million per day for the month of September. By the end of the year, that should be down to $10 million to $12 million per day, according to Delta CFO Paul Jacobson.

Earlier in the pandemic, Delta had hoped to reach a breakeven point by year-end, but “we are not surprised to see the target slip, given where we are today in terms of demand,” Cowen analyst Helane Becker said in a research note. “Ultimately, the company needs revenue to recover, as there is likely little more they can do on expenses given the massive restructuring of the business.”

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