EXHIBIT 99.2
January 20, 2005
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 December 2004
quarterly results. This information is intended to supplement that provided in
the conference call (scheduled for 9:30 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. December 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.
Laura Fuselier
SUPPLEMENTAL DECEMBER 2004 QUARTER DATA
DECEMBER 2004 QUARTER VS. DECEMBER 2003 QUARTER
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o Salaries and related costs decreased 1%. This decrease is primarily due
to a decline in benefit expenses resulting from our cost savings
initiatives, contractual pay decreases for pilots and lower Mainline
headcount, offset by higher pension expense and growth at ASA and
Comair.
o Aircraft fuel expense increased $385 million or 75% due primarily to
higher fuel prices. Delta's average fuel price per gallon rose 68% to
$1.42 driving approximately $360 million of the increase in expense.
o Contracted services increased 15% due primarily to increased volume and
TSA security fee reimbursements in the prior year.
o Contract carrier arrangements increased by 6% primarily due to
increased fuel price and higher capacity under certain of these
arrangements, partially offset by lower costs from the ramp down of our
arrangement with Independence Air (formerly Atlantic Coast Airlines).
o Aircraft rent expense decreased 6% primarily due to lease restructuring
efforts as part of our transformation plan.
o Other selling expenses decreased 5% primarily due to lower advertising
spend, partially offset by increased credit card charges.
o Passenger commissions expense decreased 28% primarily due to lower
incentive commissions.
o Passenger service increased 7% primarily due to increased traffic
partially offset by lower expenses from our cost savings initiatives.
o Other expenses rose 95% primarily due to increased professional fees,
higher insurance costs, higher fuel taxes and the sale of certain
assets in the previous year.
o Interest expense increased 12% primarily due to higher levels of debt
outstanding.
o Gain from sale of investments increased significantly primarily due to
the sale of our investment in Orbitz.
OTHER ITEMS
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FLIGHT EQUIPMENT
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The table set forth below shows our aircraft fleet at December 31, 2004.
CURRENT FLEET
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CAPITAL OPERATING TOTAL AVERAGE
AIRCRAFT TYPE OWNED LEASE LEASE LEASE TOTAL AGE
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B-737-200 6 12 34 46 52 19.9
B-737-300 - - 26 26 26 18.1
B-737-800 71 - - - 71 4.2
B-757-200 77 10 34 44 121 13.3
B-767-200 15 - - - 15 21.6
B-767-300 4 10 14 24 28 14.9
B-767-300ER 50 - 9 9 59 8.9
B-767-400 21 - - - 21 3.8
B-777-200 8 - - - 8 4.9
MD-11 1 - 3 3 4 12.1
MD-88 63 16 41 57 120 14.5
MD-90 16 - - - 16 9.1
ATR-72 4 - 13 13 17 10.7
CRJ-100/200 106 - 123 123 229 5.2
CRJ-700 58 - - - 58 1.3
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Total 500 48 297 345 845 9.6
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