Delta Air Lines President Glen Hauenstein has stated that recent strikes by Hollywood talent and United Auto Workers (UAW) union members are negatively impacting business travel demand. Delta has a significant presence in the automotive and entertainment industries, with a 70% market share at Detroit Metropolitan Wayne County Airport and a nearly 20% share at Los Angeles International Airport.
The UAW strikes, which started after failed labor negotiations with major Detroit automakers, have been ongoing for four weeks and are escalating. These strikes have curtailed a significant amount of business travel to and from Detroit. Meanwhile, Hollywood writers recently ratified a new three-year contract after a 150-day work stoppage, but actors represented by the Screen Actors Guild-American Federation of Television and Radio Artists are still on strike. Talks between the Alliance of Motion Picture and Television Producers and the actors' union have been suspended, with the two sides far apart on a deal.
Despite these challenges, Delta has seen double-digit growth in demand from technology and financial services customers in the third quarter, contributing to an overall rebound in business travel. A company survey of corporate customers indicates that a majority expect their travel to either remain the same or increase in the last three months of this year and into 2024.
This situation highlights Delta's vulnerability to strikes in the automotive and entertainment sectors. The airline's exposure to these industries makes it particularly impacted by labor disputes in Detroit and Los Angeles. However, the positive growth in other sectors suggests that business travel is recovering overall.