Delta Reports: Automobile and Hollywood Strikes Denting Business Travel

The airline industry has seen its fair share of turbulence over the past few years, especially in the wake of the pandemic. Now Delta Airlines has reported that strikes in the entertainment and automotive industries are further impacting their business travel numbers. Delta has been hit particularly hard by the pandemic, with its corporate revenues down over 50% year over year in its 2021 fiscal quarter. However, the airline reports it is seeing some recovery in that area. Yet Delta has mentioned that strikes plaguing the entertainment and automotive industries in particular have been a significant challenge to their recovery from the pandemic-induced slump in air travel. According to Delta’s CFO, Paul Jacobson, the company estimates “it is directly experiencing a 7.5% reduction in corporate revenue due to these strikes”. The airline has cited the Writers Guild of America-East and SAG-AFTRA strike as well as a recent strike at GM as the two of the biggest culprits. The WGA strike began at the end of 2019 and has resulted in production delays and stoppages for multiple television shows and films. The SAG-AFTRA strike was over songwriter royalties and similarly resulted in delays and stoppages of production. The strike at GM has resulted in tens of thousands of workers off the job, impacting delivery of cars and parts, cutting into the number of people making business trips. Delta has made a number of other changes in response to the drop in business travel, including reducing its flight offerings, job cuts, and unpaid leaves of absence for those who remain employed. While the strikes may be proving to be a major challenge to their recovery, Delta is still hoping for the best and has put several safety measures in place to allow customers to travel with peace of mind. By taking such proactive steps and gaining a better understanding of the factors contributing to the current declines in business travel, Delta remains solidified as a leader in the airline industry as it weathers the storm caused by pandemics, strikes, and other industry disturbances.