By David Meyer
November 27, 2018

Good morning. David Meyer here, filling in for Alan from Cape Town.

Fortune’s Shawn Tully has a great piece out this morning on Delta CEO Ed Bastian, who—incredibly—only set foot on a plane for the first time at age 25.

That’s a fun detail, but the article also provides a deep and fascinating primer on where Delta is at in relation to the industry at home and abroad, and the challenges faced by the values-driven Bastian. Here are a few tidbits that really stood out to me:

  • Thanks to aggressive pricing from budget carriers, 2014-2018 saw an across-the-industry drop of around a quarter in business fares. But rising oil prices have forced the budget carriers to raise their prices, and Delta has now recouped half of the drop.
  • With revenues flat-ish, Delta has quite a lot riding on its co-branded credit cards with AmEx, as well as its switch—in common with much of the industry—to larger planes that are also more fuel-efficient.
  • The importance of Delta’s overseas growth is also notable; it’s extremely reliant on the future of the carrier’s partnerships with Air France-KLM and Virgin Atlantic (where a merger of the joint ventures should make Delta a much more attractive choice for corporates), and with Korean Air (which is helping Delta escape a sticky situation with the repurposing of a Japanese hub.)

Bastian’s challenges range from rising fuel costs and the specter of a U.S. slowdown or recession, to Brexit and competition in that credit-card market. He may be popular with his staff now—don’t forget Bastian was on Fortune‘s list of the World’s Greatest Leaders this year—but there may be strong turbulence ahead.

More news below.

David Meyer
@superglaze
david@dmeyer.eu

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