A Delta Airlines passenger jet approaches to land at LAX during the outbreak of the coronavirus disease (COVID-19) in Los Angeles, California, U.S., April 7, 2021.
Mike Blake | Reuters
Recent strikes by Hollywood talent and United Auto Workers union members are negatively impacting business travel demand, despite its recovery, according to Delta Air Lines President, Glen Hauenstein.
Delta has a significant presence in the automotive and entertainment industries, with a market share of over 70% at Detroit Metropolitan Wayne County Airport and nearly 20% at Los Angeles International Airport, making it the leading carrier in these sectors based on airport data.
Hauenstein mentioned during an earnings call on Thursday that the strikes, particularly the United Auto Workers’ ongoing strike and the recent strike by Hollywood actors represented by the Screen Actors Guild-American Federation of Television and Radio Artists, have had a substantial impact on business travel to and from Los Angeles, as well as Detroit. Delta is particularly affected due to its heavy exposure to these two sectors.
The United Auto Workers’ targeted strikes began after major Detroit automakers and the union failed to reach labor deals before a September contract expiration, and they are currently entering their fourth week.
Hollywood writers recently ratified a new three-year contract after a 150-day work stoppage that halted significant film and TV production. However, Hollywood actors are still on strike, and talks between the Alliance of Motion Picture and Television Producers (which represents production studios like Disney, Universal, Netflix, and others) and the actors’ union have been suspended with no deal in sight.
While the strikes have been a setback, Delta’s Hauenstein pointed out that they have seen double-digit growth in demand from technology and financial services customers in the third quarter, contributing to the overall rebound of business travel.
In a survey conducted by the company, a majority of corporate customers expect their travel to either remain the same or increase in the last three months of this year and into 2024, indicating a positive outlook for the future.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers.
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