EXHIBIT 99.2
July 17, 2003
Dear Investors and Analysts,
To make more efficient use of the time allocated for this morning's conference
call, we are providing detailed variance information on our operating and
non-operating expenses to assist you in analyzing Delta's June 2003 quarterly
results. This information is intended to supplement that provided in the
conference call (scheduled for 10:00 a.m. ET today) and in the earnings release.
Please see Note 1 to the Consolidated Statements of Operations for a
reconciliation of certain financial measures including and excluding unusual
items. June quarter revenue performance will be discussed in the conference
call.
Please feel free to call me at 404-715-6679 if you have any questions. Thank you
for your continued support of Delta Air Lines.
Gail Grimmett
SUPPLEMENTAL JUNE 2003 QUARTER DATA
JUNE 2003 QUARTER VS. JUNE 2002 QUARTER
- - Total operating expenses for the quarter decreased 14% to $3.1 billion.
Operating expenses, excluding unusual items, decreased 2% to $3.5
billion on a 10.7% decrease in capacity.
- - Excluding unusual items, Delta's total unit cost increased 9.7% to
10.95 cents from 9.98 cents and fuel price neutralized unit costs
increased 7.4% to 10.72 cents from 9.98 cents.
- - Salaries and related costs increased 2% due primarily to increased
pension expense, growth at ASA and Comair, and contractual increases
for pilots offset by headcount reductions.
- - Aircraft fuel expense increased 9% due primarily to an increase in fuel
prices, offset somewhat by capacity reductions. Delta's average fuel
price per gallon, including hedge proceeds, increased 21% to 76.29
cents from 63.13 cents.
- - Depreciation and amortization increased 3% due primarily to
amortization of completed technology projects.
- - Contracted services expense decreased 9% due primarily to renegotiated
rates as well as reduced spending initiatives.
- - Landing fees and other rents were relatively flat due primarily to
increased landing fee rates offset by lower landing fees resulting from
decreased capacity.
- - Aircraft maintenance materials and outside repairs decreased 12%
primarily due to reduced maintenance volume and materials consumption.
- - Other selling expenses decreased 11% due primarily to lower booking
fees resulting from a decrease in capacity and a reduction in
advertising costs.
- - Passenger commissions declined by 44% primarily due to changes in our
commission rate structure that became effective on March 20, 2002.
- - Passenger service expense decreased 22% due primarily to capacity
reductions and other cost savings initiatives.
- - Other expenses decreased 11% primarily due to lower insurance costs due
to lower rates and capacity, as well as lower communications and
supplies costs
- - Interest expense increased 12% primarily as a result of higher levels
of debt outstanding.
- - Interest income decreased 22% due primarily to lower interest rates.
OTHER ITEMS
Aircraft Fleet
Our aircraft fleet, orders, options and rolling options at June 30, 2003 are
summarized in the following table. Options have scheduled delivery slots.
Rolling options replace options and are assigned delivery slots as options
expire or are exercised.
CURRENT FLEET
----------------------------
ROLLING
AIRCRAFT TYPE OWNED LEASED TOTAL ORDERS OPTIONS OPTIONS
- ------------------------------------------------------------------------------
B-737-200 4 48 52 -- -- --
B-737-300 -- 26 26 -- -- --
B-737-800 71 -- 71 61 60 230
B-757-200 77 44 121 -- 20 40
B-767-200 15 -- 15 -- -- --
B-767-300 4 24 28 -- -- --
B-767-300ER 51 8 59 -- 10 9
B-767-400 21 -- 21 -- 24 1
B-777-200 8 -- 8 5 20 12
MD-11 8 6 14 -- -- --
MD-88 63 57 120 -- -- --
MD-90 16 -- 16 -- -- --
EMB-120 8 -- 8 -- -- --
ATR-72 4 15 19 -- -- --
CRJ-100/200 89 122 211 15 183 --
CRJ-700 27 -- 27 31 165 --
-------------------------------------------------------------
Total 466 350 816 112 482 292
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