Delta President Peter Carter Talks Premium Travel

**Peter Carter** (0:02)
Bloomberg Audio Studios.

**Lisa Abramowicz** (0:04)
Podcasts, radio, news. I am here in Rio de Janeiro at IATA's annual meeting with Peter Carter. He is the president of Delta Airlines. Thank you so much for being with us.

**Peter Carter** (0:15)
Well, thank you for having me. Good afternoon.

**Lisa Abramowicz** (0:17)
Good afternoon. I want to start with the question that was on a lot of people's minds about consumer demand and how it's holding in given some of the increases in prices, given some of the questions around stress. How resilient have consumers been?

**Peter Carter** (0:30)
We are seeing very strong demand, Lisa, in every region, every region in the world, which has been very, very great to see. The consumer is strong.
The economy is doing well. It's one of the things that we pay very close attention to, and whether it's the US economy, certain economies in Europe are doing better. We see that in our consumer.

**Lisa Abramowicz** (0:57)
Certain economies in Europe, that actually flies against what some people seem to think, where you've seen sort of some of the numbers fly down. Where are you seeing actually growth in Europe?

**Peter Carter** (1:04)
Well, the UK is an example. They're doing a little better than they have in the past, for sure. And I also think that the EU, in light of their investment in defense, we're also seeing some subsides there.

**Lisa Abramowicz** (1:21)
How much have you been able to pass along the increases in price from fuel to consumers? I mean, is it even pretty easy? We've been surprised at how little pushback you've gotten.

**Peter Carter** (1:29)
Our consumer is resilient.
We really focus on the premium customer. And roughly 40 to 50% of the increase in fuel costs, we've been able to recapture through pricing, which really becomes about 10 to 15% on the price of a ticket. So fine is still affordable. And again, we've seen strong demand, despite the need to recover some of our costs. We also have a refinery, which has been a terrific hedge for Delta through this, because we pay less for jet fuel than any airline in the world.

**Lisa Abramowicz** (2:07)
Has there been any pushback at all to higher prices?

**Peter Carter** (2:11)
We really haven't. I think in part because we haven't seen it. I think in part, Lisa, because when you look at inflation since COVID, it's roughly been about 25%. But when you look at inflation around the price of an airfare, it hasn't been anywhere near 25%, even with this increase to recovered fuel. So it's still very affordable, and especially for the premium passengers, the premium leisure traveler, the corporate customer that we really focus on.
So this is going to be our busiest summer in the transatlantic. We are doubling down on our global network and global expansion. We already have the world's, I think, most connected network, but we are continuing to invest. We just launched our Hong Kong route yesterday with, I guess today technically, with our inaugural flight. So there are so many exciting things happening. And again, we follow demand. You know, we launched seven new flights in Europe because our customers are saying they want to go to places like Porto and Malta and Sardinia.
So we are taking advantage of that.

**Lisa Abramowicz** (3:20)
How much, are there certain places that you've identified that you want to create routes to that are harder to break into, that might be really popular, but there are obstacles that have kind of emerged?

**Peter Carter** (3:32)
Well, I think the best example of that right now is probably India, because we cannot fly over Russian airspace. But as we all know, India is the fastest growing economy, the biggest population, the largest democracy in the world.
And someday, we will serve India, but it's very difficult to serve India profitably without flying over Russian airspace.

**Lisa Abramowicz** (3:55)
I know that later this year, you were planning to launch a flight to Riyadh, direct to Riyadh. Is that still planned for later this year?

**Peter Carter** (4:02)
It is planned for October 23rd. We're very excited. We met with Riyadh earlier today. They're our partner in that region.
We think that is such a strong growth market. It's a country that's gone from the Middle Ages to the modern age in about, you know, a handful of years. 40 million people live in Saudi Arabia. It's a large geographic area. They've got a lot of business travel, obviously. Oil and gas is huge there.
So we're going to start that flight. We know, obviously, with what's happening in the Middle East, that folks in America may not see that necessarily the place they want to go right away. But as these new routes develop, it takes time. And we want to be there for when the day comes when they're ready to travel to Saudi Arabia.