Delta CEO Ed Bastian on Where the Airline Is Headed

(Bloomberg Businessweek) -- Delta Air Lines led all U.S. carriers in net income last year, and CEO Bastian is intent on expanding its global reach. On Sept. 26, Delta agreed to pay $1.9 billion for 20% of Latam Airlines Group, Latin America’s largest.

What’s one thing that excites you, looking ahead five or 10 years?

International. We’re a great U.S. airline now. I want to be a great international airline. As the investments in our international partners take root … I think we have the opportunity to be that.

What’s Delta’s take on airline partnerships and code-sharing and frequent-flyer alliances?

One of the things that’s not been successful in the airline world are the alliances, and I’m being self-critical. [Delta leads the SkyTeam alliance.] So we’re going at this in a very different approach, through Delta making bilateral investments in the most important partners. They want to know what Delta has learned about operating efficiency and prowess and premium [service]. And we want to learn what it takes to win in those local markets. Over time, while we can’t own them, we can have meaningful enough investment that we create an international network of carriers that will be uniquely tied, with Delta as the centerpiece. That’s our goal.

You’ve won plaudits from customers. What’s the story for investors?

While the airlines may have performed [well] at certain periods of time, they also spent back what they made on labor, technology, capital, and fleet. We’re doing that but also returning a meaningful amount [to investors]. So this year at Delta we expect to make over $5 billion for the fifth year in a row in terms of profits. But we’ll also have free cash flow to liberate this year of over $4 billion. I think that performance and that consistency is rewarding.

How have your customers benefited?

Consumers are getting great value. Airfares at Delta are down 40% in real dollars over the last 20 years. It’s remarkable—and another reason travel’s booming.
 
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