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UPDATE 2-Delta Air says bookings have bottomed out, business improving

(Adds comments from Delta official)

BOSTON, Oct 3 (Reuters) - Delta Air Lines said that its ticket sales had stabilized and started to improve, putting it on course to deliver third-quarter revenue within its original forecast range.

“For Delta, they bottomed out in the later part of August and the first part of September,” Chief Executive Ed Bastian told reporters on Sunday on the sidelines of a meeting of airlines group IATA. “Business traffic is growing back in the U.S.”

In July, the company had forecast a 30%-35% drop in third-quarter adjusted revenue versus 2019 levels. Last month, the airline said quarterly revenue would be at the lower end of the forecast after a resurgence in COVID-19.

A Delta official on Monday said there has been no update to the outlook the company provided last month.

The airline is due to report results for the quarter through September on Oct. 13.

Bastian said domestic travel bookings are expected to surpass 2019 levels next year.

Later, the airline said it would boost its capacity at Boston by more than 20% next summer over the 2019 peak, by adding five new routes including two international destinations.

The company is also seeing a surge in demand for trans-Atlantic flights after the White House’s decision late last month to reopen the country to fully vaccinated travelers from around the world.

Trans-Atlantic flights accounted for 11% to 17% of 2019 passenger revenues for the big three air carriers - American Airlines, United Airlines and Delta.

Bastian said Delta’s staff vaccination rate had risen to 84%, driven in part by the company’s decision to impose a $200 monthly health insurance surcharge for those who had not been vaccinated. He said he expects the rate to surpass 90% by Nov. 1.

Delta, however, is the only major U.S. airline that has still not mandated coronavirus vaccines for employees despite the pressure from the White House.

Bastian said the company has not decided whether to mandate COVID-19 vaccines.

“We’re obviously studying it,” he said, referring to President Joe Biden’s executive order (EO) requiring federal contractors to mandate vaccinations.

“I’m not sure how far you need to go in order to be in compliance with the EO,” the CEO said.

The White House is pressing major U.S. airlines here to mandate COVID-19 vaccines for employees by Dec. 8 - the deadline for federal contractors. Large U.S. airlines have a number of federal contracts.

Reporting by Rajesh Kumar Singh; Editing by Himani Sarkar and Bill Berkrot

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