Delta is launching new business class cabins. Why is it betting on the premium segment?

American carrier Delta Air Lines, the country's largest airline by market capitalization, has unveiled an updated version of the Delta One business class. The company is betting on the format, which in recent years has become a key for the industry, Bloomberg writes.

Delta One passengers will receive increased sleeping space, improved lighting and additional storage space. Business Class cabins will feature 24-inch 4K screens, Bluetooth connectivity and wireless charging.

The new business class cabins will appear on Airbus A350-1000 aircraft, which will begin entering service in 2027.

Almost half of the seats in the new configuration will be reserved for premium passengers - the company expects to expand its presence in Asia, Africa and the Middle East, Bloomberg notes.

Delta is also upgrading economy class: the company said all seats on the Airbus A350-1000 will feature cushions made of memory foam material, improved power outlets and larger screens in the seatbacks.

Shares of Delta at trading on April 13 fell by 2.3%, since the beginning of the year they are in minus by 4.6%. At the same time, the broad market index S&P 500 has lost only 0.3% since January this year.

Delta Air Lines and other airlines leading the industry in profitability are renovating cabins and increasing the share of higher-priced - and marginal - premium seats, as affluent passengers are the ones who continue to fuel revenue growth, CNBC notes.

The company said revenue from premium tickets, including first class and other more expensive fares, rose 14% year-on-year in the first quarter. At the same time, revenue in economy class increased for the first time since the end of 2024, the channel said.

Competitor United Airlines on March 24 unveiled its redesigned Polaris Business Class, including roomier Polaris Studio seats and 27-inch OLED screens.

Jefferies on April 13 raised the target price of Delta Air Lines shares from $78 to $81 and maintained a buy recommendation. The analysts' target implies a 19% increase in the airline's shares relative to the last closing price.

The consensus of analysts on shares of Delta Air Lines remains positive: 25 out of 26 analysts recommend buying them. Only one recommends selling, no "hold" recommendations.

This article was AI-translated and verified by a human editor