DAL - Earnings call transcript Q4 2019

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Operator

Good morning everyone and welcome to the Delta Air Lines December Quarter End Full Year 2019 Financial Results Conference Call. My name is Shannon and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation.

As a reminder today's call is being recorded. I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. ma'am. ahead go Please

Jill Greer

morning quarter thanks end Good on joining our December full everyone Shannon. for and us Thanks year call.

Atlanta Hauenstein; Paul from our us today CEO, our Joining Ed President, Glen and Jacobson. CFO, our are Bastian;

our Our a and give us [Operator our contain or All flow. performance will the forward-looking the with to materially statements the environment, and for expectations events. actual address of does cost overview Today's discussion cause Paul team differ risks from review Delta's cash entire conclude Instructions] future that involve call that Glen beliefs Q&A. forward-looking and the could and the will results is then leadership uncertainties forward-looking represent the in statements room about here open statements. of an Ed with financial will performance, revenue

cause Some can at non-GAAP measures. non-GAAP differences the page such ir.delta.com. are of described results discuss Investor that, measures otherwise And All and that exclude unless factors our also of Ed? financial Relations our filings. a items reconciliation noted the We'll may on SEC with in find special you

Ed Bastian

quarter full Jill. us today. our year. last you Good appreciate including billion year is of profit joining results million morning, a reported Delta Thanks, compared to $X.X Earlier everyone. December which pretax $XXX We up

more X.X% billion top with an history. largest $X.X with carrier flow. truly pretax and announcement best was completion the year improvement in a points the operationally Up world. was billion billion, for revenue over in over $X.X XX.X%. share owners. as returned performance renewal work and with of grew in be We possible factor December what industry. $X and quarter Delta with XXXX and Express improved record without of employees' $X.X financially our The could The Our cash industry and the for EPS revenue new a the year of Strategically, Full Delta leading outstanding in This XXXX, we'll These sharing. Delta year free in profits not of Delta's results is and and or consecutive to positioning more billion expanding the cash of prior best-in-class flow our finish performance, with the in airline LATAM Wheels quarter all generated increased than we in fronts. profit the to XX% billion I setting to profit by delivered to American margins XXX pleased performance on-time the We to simply people. $X.XX our year line would the highest $X with partnerships, basis billion profit the year recognize pretax earnings $XX and sixth great incredible team. in on am was an income, be XX% per the marks sharing U.S. happier sharing. history billion not $X XXXX our

of with Delta's quality in a brand is more in X% for excess the flew customers, along expect with is decade, and last named we tripled. culture we In climbing than by are Show, of by For with investment Delta. year And pipeline our we Delta's journey across than XXXX. a plan future off had X%. we the have XXX entire where Delta to has we delivering plan opening of nearly performance leading was operations, to customer to we honor and innovative representing ever ahead. a XXXX. is come, over airline. of zero think employees service, operational and address remain month's five use we of XXX Investor X% strong and will the to tools outlined Day fly industry an technologies Consumer year why the years, XXXX. at choosing anniversary. with This Last how is last reliability is momentum, daily, and airline support as perception two through years. our performance service grow Delta we satisfaction top more our Exceptional Domestic the of customers short every of delivered on to world's best improved for week, people our in the The system XXXX to Score that GDP. reliable to regularly customers, but XX% better consumer Consistent in scores have the even a outlined XXX XXXX, On-Time days XXXX operations. row. amazing North record XXXX's cancel-free XXXth in Promoter growth brand of initiatives improvement keynote Delta vision of over days Most more operations, airports mainline Delta that keep we've most our the growth over powering a American customer In branded We significantly the continue far we've set celebrate month, give with of the the we've the the our Recently, in that Flightglobal our revenue by unmatched the and And travel, to worth I to It's our last to on world. canceled at that the our another its run the and to serve technology. XXs, entire over ended Electronics year service unveiling dimension. travel continues demand exciting customers look revenue result, are increase good course our Delta's technology of now point U.S. healthy, reshaping continued over the million improve in Net the five products, improvements third commercial start.

our flow of to of Delta's increasingly remain building straight three an over sixth demonstrating profits of bring solid are momentum, year is year. Delta excess the cash earnings diverse full level outlook $X the for cash billion pre-tax reinvestment flow I'd combined brand cash and $X.XX expected industry. very to us owners. meaningful at the a share leveraging would and customers, over brand cannot This our year year This engine to powered the in the per advantages This drive Our by also Free we this strong extending in XXXX. value and with our this With for billion. of with end $X.XX positions By for the flow consistency call of billion others streams competitive a revenue unprecedented earnings Glenn free foundation the like cumulative free to is financial Paul turn to and in of $XX details to $X reinvest have when enabling great that, long-term go in level match. at our that the by we to to to a business, and is employees our people quarter. best business through

Glen Hauenstein

Thanks, Ed, and good morning.

loyalty improvements unit cost in and outpacing in growth more broad-based entire the our of to domestic than prior delivering and of an enabled strength over double-digit more industry in work billion I'd record leisure, international, growth Delta their to than year X%. revenue growth with for year. team sustaining business both It's XXXX. like non-fuel in that X.X% revenues MRO. hard premium improved $X XXX% increase was First, and the X.X% revenue, a of billion The Total unit thank and $XX in and

On to $XX We to with XX% invest on and revenue our products, fly average the affinity. billion. we in in of generated experience premium product or customers that year improve premium and purchase and equal of products better X% the seeing We've product in revenue increasing continue an sources. revenue top product diversify future trip. the premium a are other to line grew by continued XX% non-ticket loyalty Premium

miles We contributing Members more a than million providing Since use capabilities, preference to with incremental ability continue X.X miles, bag are stronger most expand a launching, fees Delta and the for with use ago is of miles. they ever. year revenue upsell options using for million pay to little customers miles redeemed recently Brand over $XXX cash Delta. we SkyMiles to have anywhere can with

SkyMiles are the with business distribution million our Delta, airline year. News Members customers We directly momentum Mobile a grew number the More grew history added interact We new XX%, row. by customer fastest-growing Travel in driven best named from Business purchased Digital trips highest an Total for in world's customers. XX% active to channel. of for XX scores is enrollments. of our with us the X seeing with million year in revenues and choosing XXXX revenues over during by in ninth Delta base are travel satisfaction of the directly XX%. loyalty over user

year of spend. of We is growth $XXX grew fifth portfolio advantage customer than drive billion. strategic total for Express is contract in relationship new new unique. by co-brand our by million Delta's spend. We In XX% XX% record to In XXXX, renewed approximately with marking is a million. million and redemptions the a to XXXX, This revenue consecutive cards co-brand deepened also American American setting third the co-brand year with in that benefited Express double-digit X.X close $X.X mileage acquisitions. X our engagement growth the acquired more truly contributions

redesigned we rewards the their customer customers offerings. loyalty momentum heart portfolio Later expect XXXX The will launching to we acquisitions. this Enhancing continued $X and and to and our new card improved on and that with of reach acquisition by in American drive cards loyalty. XXXX nearly continue to combination of future innovative our this richer month trust are growth. for and of business. is to and together finding We deliver new Express increase billion building a $X.X new customer be at benefits reward ways card billion grow rates, And will spend

in ahead business and the between Premium quarter in Christmas. of strong leisure domestic up sequentially. strength growing improvement top was guidance top Internationally, our with with revenues. point PRASM. marked Corporate improvement with Turning and margin We XX% revenue X% the point XX% key sentiment peak the quarter, entity driven In yield saw growth Holiday in XX% delivered strength year up premium booking at in sequential X% and on unit grew travel of Total we travel year-over-year. Domestically hubs. growth. X.X% over Passenger gains. X.X% up year. revenue of consecutive and XXth December came Brazil quarter outpaced beat and core revenue condensed X.X% by a contributor, PRASM every was a by strong expectations Mexico hub domestic prior expectations, was best-performing on of led to a and solid on delivered a improvement. strong X% to LATAM. almost revenue our both revenue products with X% up hubs remain revenue September and year by PRASM close PRASM Atlantic, year's to of unit X.X% stabilized Domestically, consumer the revenue product improvement on demand Similar on revenue coastal driven line X.X% a demand gains improvement Specific flat PRASM growth the unit in in declined a FX. improvement, three in quarter. last in double-digit X.X%, was entirely saw LATAM days. period the revenue X.X%. prior December over three we and and up Thanksgiving

we suite revenues have China Select performed in last year's in of our MRO due on the sequential unit revenues and our American new increase revenues continue we and Premium to is The transformation. volume in March up One we on Premium to Pacific routes, quarter and and improved fleet by While X% now from to Express benefits the unit In trends as product place. Delta to contract timing. XX% expect the X% X%. up remains lapping Delta unit Select change aircraft total products soft, quarter flat reconfigured engine With December and Japan well

our growth Importantly, better XXXX. to and X.X% In service of preference, consistent at India. revenue X% four XQ remains XX% remain maintain driven driving or win and growth increased loyalty expected spend with approximately in travel year with of X% plan PRASM of most selling capacity the recent their products, outlook demand The both March is servicing strengthening travelers brand points and our trends continuing business overall In and for our more to survey to XXXX. corporate increase to XXXX, growth areas; of by launch is includes customers. corporate leap Corporate XQ of managers expect healthy. and quarter in approximately leisure XXXX positive. travel and two

we in sell and momentum in revenue While products. continuing how ongoing product our the XXXX and premium modernization premium is with in distribute wide-body improvements of fleet

from we Express developing personal In growth our in expanding additional service LATAM. and opportunities more American our We refocusing hubs, core rate than MRO are a network also with moderate XXXX. on and expect albeit at our partnerships in and

the December of We trends and expect in begin service relationship Mumbai to to new In quarter. our JFK March forecast. Co-Chair we are from revenue launched ahead

approximately a at the In half year. as consolidate point transatlantic year in Airport. the throughout operations Tokyo the Delta expect pressure preferred of We the one unit route revenue will Haneda the the downtown develops first

also to in service shift new Daxing the strategically steps the These in moves the will important multiyear restructuring Beijing and final Pacific. Beijing Airport. our are We journey are

next the decade Delta portfolio a transformation an in advantages. Delta's mature of an technology. around partnerships we through our advantage for established and returns continued and evolution Over we partners, ensures world. scale investments that extend has a fleet, the foundation leading unprecedented global investment of facilities and decade building grow as competitive network acceleration This the the provides last over by

operational balance off And leadership now culture, and closing, industry. loyalty an a to very turn in Paul. Our we to start XXXX retain global sheet over In in I'll strong outstanding position network, customer the reliability, and it delivered are to XXXX. investment-grade an our

Paul Jacobson

a pre-tax thank than flow billion margin key to We continuing expanded all Thank the and return free and strong $X.XX capital XXXX $X more improvement prior Delta's to returns partners, nearly generating cash In $XXX of also and basis gain revenue, and XXXX doubling selling Good GOL grew capital unit quarter, our fleet, delivered an Cash on highlight. million lower with joining by margin points XXX billion while improvement our fuel, to also in technology. was December after-tax pretax since Pre-tax us. In was of net over Glenn. above everyone, relationship. year unwind These than This are in flow per record. you invest people, expanded billion points our our XX.X%. from that invested XX% investments of basis to XX.X% resulted prior versus represents for morning, XXX share. while XXX $X.X we in stake and XXXX. basis in higher to million stronger on $X you, guidance over our $XX beginning points invested Earnings our XX.X%. generated This base. a performance income

grew margin $X.XX. points and this earnings consensus beat approximately XX Excluding gain, basis pretax by

which half was the on increases profits. from lower markup Non-fuel were with expense grew $XXX expense fuel were million, total quarter market expense, due cost These balance sheet of partially benefit-related to growth costs While by the X.X% obligations, in primarily in lower our X.X% pension in fuel profit up line quarter of that the and offset sharing prices. guidance. in declined the growth unit

the we cost consistent unit target, For X% half the back in non-fuel at the long-term full year, of the with despite pressures came our year. in saw

For X%. non-fuel to the to March X% quarter, we increase unit expect cost

March line based on slightly quarter last provided, over the While flat to the pretax $X revenue of to in yesterday's on fuel be Combined roughly outlook quarter prior year-over-year. per month, to price, price with year. Glen expect $X.XX been we gallon March volatile fuel margin has above we expect

of cash billion to cash nearly net XX% the flow, XXXX, Free balance billion $X.X to generated resulted cash invested the flow. back of converted business. of Turning $X.X and cash operating into we $X.X in sheet free flow during and billion income

at transforming durations seats, was the are of we higher range issuance complete, unsecured replace investments acquisition five of of these will we to drive XX% Delta's and capital goals. the adjusted the support we these benefits is debt satisfaction, on increased in now line in of the The Delta's tender fleet and planning of the XXXX margin of non-operating Returns the These in end. in stake half to two is invest up leverage at billion X.X proceeds and compounding low benefits times majority Day, strong lowest reinvestments are X.XX% of growth. The quarter, debt year billion remains a a Bad history. as Including investments of LATAM and Investor $X.X the the and March and for during our the puts debt efficiency advantage. our drive balance through targeted technology. LATAM. at made and notes. half customer XX% premium fuel outlined As significant XX-year product fleet $X.X continue funded of quarter. our begin in recognizing sustainability sheet our end unsecured us was equity debt-to-EBITDA long-term of times. investment-grade competitive helping Delta's blended raised spending in to This an to earnings which LATAM's one With improvements important ratio we beginning are rate

and our we pension, $XXX Moving the XXXX bringing contributions million actively we a through combination elective contributed billion. obligation into asset of $X incremental to In quarter, to contributions managing in plan, are the returns. funding December of voluntary an

year. unmatched deliver we the on share this prior that Delta to XX.X% liability people planned basis were our And collective In deliver status equity will the fueled allow our we expense. providing Delta's discount long-term our well cash to dividends per also XXXX, billion make total impacted repurchase ended in billion, Consistent XXXX. For airline continue our in again a asset of the $X.XX strategy million a results truly us the million with And ahead. but strong this markets And about end competitive relief sheet to complete returning We are EPS, year strength in to all and flow of balance are values contributions with I'll quarter, returned which in our we and customers plan by $X improvement with by back remaining improve guidance is strong and powerful $XX owners, funded in liability, shareholders. year returns another over and no elective lower billion. middle brand, in Day, to of the year, We December In rates our to at the This expectations $X while $X on for we returns favorability to track to XX%. and obligations consistently while capital and And XXXX. XXXX the also longer double XXXX. helped unfunded for drive cumulative contributions nearly turn authorization, announced of I'm of billion bringing pension XXXX. in earnings $XXX mandatory year XXXX our free repurchases year, of in to by full industry-leading through people. to Under over our Jill our XXX and funding cash cash improved per business, excited which $XXX the we the share Investor expect XXXX. funded It flow over the for advantages, $X.XX call changes the no of drive for XXXX. begin of free generation the simultaneously the efforts these us $XXX three-year expect total status by is with Strong billion reinvest point addressing that, to recall, $X share million have Q&A. U.S. in allows quarterly year for

Jill Greer

could ready some give we're on for Shannon, get analysts, into if instructions question-and-answer Paul. how period queue. the the to you Thanks, with

Operator

Vernon [Operator first question from our Bernstein. come Instructions] David And will of

David Vernon

morning, time. good the guys. Thanks for Hey,

do over the maybe on the of these rideshare kind capital in of CES? in you even of sort executing Or of kind experience at think expect of the some this activities kind years are partnership decision as about the laid revenues existing that investments after Delta out next more Ed a and funded little you couple spend look be through vision the envelope? and maybe to within to technology going to thing going you So, you is – accelerate of the as kind adjacent bit

Ed Bastian

and CES with envelope in The displayed that Hey, David, spoke we've technology David. at working within the that we that thanks. been technology. of the we Yes. capital is

One at years investment $XXX level last of the the on million running upped technology. in over done things we're our now a about that capital in we've technology, several a year is and

data that, the However, on for and be able architecture infrastructure finally sets first couple type now lot starting data focused seeing. to was in you're of and produce and of innovation to that's the years a of that it of resiliency technology the

heavily more as business And we've weight envelope towards application But and the so it's it been going to to using. forward sits commercial compared within be infrastructure. going

David Vernon

as incremental you it's the cost to this earn? quick just along think of of you to premium a the sort opportunity is Or material do to within maybe follow-up changes kind a return revenue of or investment you see enhancement revenue years? way that about gradual And this as the going on step some five three sort opportunities next out in the whether be

Ed Bastian

I do to support Certainly and opportunities think and the go a David. opportunities whether of and And our $XXX that significant front what past about able tools long using with year utilized are minimized. as shopping million we currency estimate in better the also IROPs downtimes that our ensure SkyMiles could revenue, at list I we and year. there's go new-generation investments are the thought incremental booking a we the digital this it generated of cost this have. in best to new are fleet decision making optimizing sit through have. we Opportunities offerings any We and crew upsell, be that we're and we on it's both, on product that looked revenue certain

level the we're brand them The our digital only So with I personal can the and a and think be customers enhancement with you is great connections connection a we closer to both opportunity cost way that as well year. digital XXX customers, start. it's off as closer to million going build build to they strong at a as that a choose

David Vernon

guys. Thanks, right. All

Operator

Becker question Cowen. of next from will Our come Helane

Helane Becker

and that thank time. I'm and your some you from you and very the demand strong corporate said everybody they're side much Glenn, But Hi, employees hear top Or just seeing group? corporates? strength, you're sure I expenses true. particular you some thinking if operator. starting and if a for you're on seeing that if industry seeing that any to about I'm the that's asking maybe cutting know much of where rethink among I'm to signs very it's your their mention could Thanks companies travel wondering you're

Glen Hauenstein

I XXXX. And are No, we're some we to time of last see we lap that as time head weakness into fact, manufacturing heard starting that little momentum sector. worried of seeing starting and this and board. a think And see a to we're the strength across we've corporate a out spend as that to we're matter year of about did coming people seems but good positive be from position in to in travel very but it bit

So signs generally, very from we're some good seeing our corporate.

Ed Bastian

bled over of the in of U. corporate U.S. of in is weakness is on think that's economies. discussions Yes China But few a into tariff with fundamentally right, seeing certainly Asian Glenn the some doing other the this S. only and our I Ed, add health some the that Helane, is businesses quite and well. touched Glenn's thing we're the as to Korea the Asia and issues I'd

Helane Becker

see then faster Would corporate Okay, in okay. a to in Thank you that. traffic growth or follow-up you. just faster rather growth traffic? leisure And as

Glen Hauenstein

We've experienced both.

an who higher U.S. better separation quality leisure really for what people into upsell in seeing in is the I – highest both airline products or like fares are looking is think of willing I really we're services and think at we to And interesting them pay what quality and the leisure in equally.

in industry. an is yields, see leisure for very the good in we which increase So

Helane Becker

Right.

up So economy comment? interpret basic seeing buying bucket, and to you're leisure in what is is that way people your that a fewer travelers

Glen Hauenstein

That's a way it. to look at

Helane Becker

thanks All your Great. appreciate help. right. I for Okay. much it. very Well, okay,

Operator

Hunter question Wolfe with will Research. And come next our from Keay

Hunter Keay

good Thanks. actually. my just Hey, segued question Helane, morning. into nicely

doesn't fit higher leisure point mentioned Glen, brand maybe seeking point you really as quality. basic economy as is where to the the dilutive Delta on there it to that concept You guys view you being try where a focus quality? anymore

Glen Hauenstein

no needs the products best-in-class from we've always there. travel I are. services clear And have sensitive customers that only who and see that your want best-in-class the for would price we we I entry-level are to to we beginning really think what been matter would think have

the the a provide overinvestment might of our see in is point. quality And that's And life economy, highest continue the entire cycle. us fact entry matter I product of people throughout they stay us service an they As you but think to their maintain. once and important for basic Delta that think with that's

Hunter Keay

the the for picture Okay. airline? change value think flying think the so a pretty big feel a be get the as premium, few And -- so to you you take if loyalty your down then drive the comfortable years, yourself you intentionally idea would of brand proposition second, step load feel to an really would with back ever factors, over crowds a five next less yield XX your and driving to with much and premium a just with experience points volatility really which RASM pricing entirely on differentiate driving truly through eye less overall and

Glen Hauenstein

I is. structurally. what we're taken looking that I And always think at steps think really we've

comfort plus invented we say in domestic the Let's arena.

see that include fly is builds more would we which think that product I take continued what I can't demand of would we and fleets, more time for might existing over density the that demands on create premium maybe out. to have sell see the base a adoption plane customer the meeting to today. wanting even might is empty seats. wanting our ever us I of that we us see than can't that with

Hunter Keay

you. Okay. Great. Thank

Operator

Didora of of Bank from come will question America. next Our Andrew

Andrew Didora

investments. million I CapEx, order relative on new good do plane on on tech question a spend ROI Hi, plane the I that refresh? say everyone. think the you're about morning, how the tech you a spending to actually follow-up had needed on $XXX or guess

Glen Hauenstein

we we're to need right? not not -- do Well, technology This is off Andrew both, trading planes. for

going So modification and technology we to we be airplanes fleet bulk those technology aircraft. goes also is And enhancement fleet. our year. this our new board investments fleet. That's clearly new of the but We're into where the continued bring CapEx the on of have our the need -- XX those into fleet of facilitating taking are as fleet to our then

So look trade-offs. that don't the stay plus threshold how XX% We at operating overall or of to get I within at we differentiated minus a them look budget as an there. try that's We've we cash. or CapEx company. as And got

say certainly we'd And and initiatives. returns investments we of ROI I'm capital digital every Now do the to at results they've our one expect. on pleased and largely been look producing

Andrew Didora

I release you. And hubs. and and in the core you've domestic Great. coastal been Glen the both results breaking know by hubs out Thank press

just think about over two you can the what next growing you do are your coastal do segment as but -- markets years, see core Minneapolis, opportunities the Detroit, see capacity And core Atlanta, and the Salt bucket assume those you follow-up of then hubs anytime you. moving any the soon? biggest into to I in? Lake, one network you Thank of As a the

Glen Hauenstein

just think they're not centered. I core; Well, geographically they're

is named. Lake when connect when than to ones Atlanta you're or City or traffic other Salt you're in ability a less lot your you Seattle So, in the

key hubs. positions bit But to the post-merger Boston, like advantage growing opportunity York. to of little connectivity interior expense New we that So, Los in our first-mover Seattle, take advantage of coastal used did of consolidate markets in really have the Angeles, having the our a we at some

the improve to growing the bit working but on continuing we And we'll so hubs, the a little years, products to on airline. really refocusing the improve and the services at hubs offer several coastal next of the connectivity interior over be

Andrew Didora

Thank Great. you.

Operator

Deutsche question Bank. next Michael comes Our of from Linenberg

Michael Linenberg

heard two quarter, it but guess right just the good I in that? Hey, I the you quarter, late to morning fourth P&L. sure March I in shows Is the the did up through you just right ones I running I guess LATAM really beginning make it quick closed here. the that want Paul in fourth on nothing quarter. everyone. hear I know

Paul Jacobson

That's March correct in Beginning quarter. Mike. the

Michael Linenberg

or the don't whether know getting Okay. there to board of not have at respect And it out? the sort that? about if or better to with Has I Do whether a as a seats. of two figured sense? XX%, a then be know board or one have that to seats you two conversation you result was not been was LATAM as going Do recall, you I

Ed Bastian

Yes.

We have board Mike. seats two

Michael Linenberg

quarter. Great you. great. Okay, Thank

Ed Bastian

Thanks you. Mike. Thank

Operator

we'll hear of from JPMorgan. And now Jamie Baker

Jamie Baker

good everybody. morning Hey

to outlook discussed follow-up shows topic of potential it's an point. regard. the regarding specific a year should potential I'm last full the Or RASM quarter international the results as if that upside premium the Glen any or to for to assumptions? question an any RASM guide? first generate does we a international quarter First secondly guide fourth and at some quarter the we have evidence in progress And treat any premium this curious

Glen Hauenstein

what -- we XXXX continually We yet I and the hopefully moving and we right and I opportunity performance increase first think trends our competitors unit what improve international the performance in we're relative this can't doing, quarter. to to I through in revenues see as those but continue was fourth we we're into plan. to beyond continuing our quarter working have go think our we are think our see an our have and absolute direction

Jamie Baker

Okay.

letter fleet coming Larry this to ESG. topic topic examples sure age saw know consciousness. for not you running how the we're to but about you fleet. than how turn to if that with in quite fleet keep specifically struggling spoke the and not I the of growing mandates? average is some that? Ed. ESG back It's what related you gave has whether fleet I your Second which I'm down higher you competitors. a ESG We've possibly I if CapEx Investor commended haunt strategy environmental respond just at Fink's time necessitates I'm morning. Delta's you that have on now for with of on this bringing I is strategy compliance somebody your wonder telling cusp mean you phrase your How to to some about Day; question, incompatible would the implications. sure age

Ed Bastian

we that our plays interesting Investor sustainability hopefully take environmental like to more levels. part topic at also at It's goals CES is something that that ways and I even an is than this opportunities It's but solution, And requirements airline and Day Listen, of is more that. did can the way little plane Fleet think hearing and Larry's – very more we you planes move to us Jamie. of think looking at only an XXXX in year. specifically about fuel-efficient older fleet faster closed a not more be has we're we engage. put we part of fleet is back and important done me given at fleet specifically. about terms that at aggressively. put our letter in XX% We're the big you're us the And footprint a candidly has of this by others, we're many And somewhat go Delta than hear the only anything but XXXX get actually over our chance every how on in – other we're I to heard more the I an No his being heart. capped space didn't though to I only planes of there to I XX our retiring. maybe message are in right. new going having see that it course the bit morning. which in. And to airline it a that things We talk voluntarily ESG carbon putting

Jamie Baker

letter morning. I you That's yet. it. not helpful. the know having calling appreciate I for really been seen wasn't a I And it's up busy

deal to things bigger great got again quarter. Bye-bye. Thanks You with.

Ed Bastian

Jamie. Thanks,

Operator

Pfennigwerth question And our will Duane from next ISI. of Evercore come

Duane Pfennigwerth

is It that Is RASM guidance you lower on whereas for implied questions. Thanks showing versus revenue growth clarify your guidance schedules accounts up are what what Hey. difference? for into your the based feels guidance like first refinery Can one. the a your just the that year-over-year? RASM explicit is Or quarter? flattish, RASM taking guidance

Jill Greer

Hey, Duane, but anyways. it's from Jill. TRASM slightly The lower exclude year-over-year, sales refinery those are we

so X% solid factor revenue X% total schedule, that in to a to growth. to at just they're is have growth scheduled. a the make There's I looking – adjustment but we're the completion think you're revenue And you quarter, the first

Duane Pfennigwerth

XXXX this Okay. XXXX? it about expect taking the pension, understand pension on for explicitly and in talk the what year. just you And you in you a Thanks I just be questions. Great. to was But expect can expense what then tailwind

Glen Hauenstein

Yeah.

pressure thanks we So, of the that going a about million XXXX. Duane. pension in of year-over-year mentioned in had returns in We result XXXX had as $XXX

haven't given we – I were XX% about guidance XXXX. up think year-over-year, specific While we if you at look in we

look that. can and you back the sensitivity see So, around

Duane Pfennigwerth

Okay. Thank you.

Operator

of Our Suisse. come Joe Caiado from next question will Credit

Joe Caiado

in if here it much. the on partnership, Good Can just missed share think and question begin very everyone. Glen, some just I the may My have the apologies LATAM is you first us Thanks QX. estimate update you where with XXXX launch a rough that? government there think from when QX you approvals are as just those And could an to that expected quick share on give you with in it, you morning, of slated I about Hey. to contribution a on and LATAM? can us talked but follow-up you revenue affiliates with code that,

Glen Hauenstein

by that week to second it's I'll country. Colombia. start the No that. in which share the ability to And we're issue And is we first one, the believe is this going I received today. code easier with not

then the tent shortly. pole. expect – And and the We little longer to a longer in Peru bit Ecuador follow

longer all bit So we year. in up and little be the later Brazil expect is those like which Chile, pole running and in XQ. A this tent should

Joe Caiado

one with CASM-Ex, Should your trajectory? right year? big through to expect swings Got we QX in the loaded X% the year that of that guidance be you on any X% And moving fairly for that in the you could then Paul line for it. Thank there that pieces in that. just expect a year. to Or drive full some sort are level quarterly quick

Paul Jacobson

pretty on quarterly the give at rule, if rest is to with general intentional. a as volatility. that throughout to the in year that's more we're in XXXX you a for cost obviously performance been what look say taken Yes, conscious I a of of But skewed across CASM would CASM it's balance Joe make lot year. trajectory not to and We've the going disciplined effort years our very try past guidance to that

Joe Caiado

that. appreciate Thanks, everyone. Okay. I

Operator

question Barclays. from Our of Brandon will next come Oglenski

Brandon Oglenski

morning, good on congratulations Hey, and pretty everyone impressive a quarter.

flow be here. a had strong guys cash too differentiated have your you And much to but not experience really it Paul, is carrier. a of So cheerleader on

I this capital positive CapEx, So you to more? Does maybe it in over there balanced hey a airport the we say, fleet to or technology very here guess, actually where strategic? Or want bit reprioritize over allocation with little spend you'd is want momentum do stay strategy? any trends

Paul Jacobson

Brandon. the first comments Well, of you thank for all

the constituencies, return and the it's We having It's has you and and have demands flow balanced results. pace well do. when obviously very the I deploy enterprise that. sure multiple into is we it's us It's important capital. just the that capital make cash a the always the space things to delivering an capital across benefits implementation to an in think to on on driving approach worked lot the effort for balance and of look very, performance piece but whether that that capital. of want Prioritization not of resources invested

do over we allocation of opportunities balanced seen hold do over room are take out you've – advantage some that time. us want I'd around say while edges, have do have the to to that we that roughly We So time, there.

Ed Bastian

the I'd the was we'd we very it's Ed. in could We're And that also had if the in get I Brandon, that a opportunities infrastructure we look any buildout. weigh if of area and clearly accelerate say, airport construction. significant the to in can somewhat, done there better. it's sooner midst

be place I not using was be suggesting So change we going that to CapEx available to had that would we're allocated the that one for to but extent it. look capital any assumptions any

Brandon Oglenski

you. Thank everyone. Okay,

Operator

Syth next of James. hear Savi we'll from Raymond And

Savi Syth

is you kind I pretty tough a from the regional had perspective? Glen trend everybody. you, as we morning, start wanted wondering trends. the versus a where kind what of just there I'm bit seeing on At you are but is more region good. Good ask tougher performance look Glen. little still to forward, just XQ LATAM, comp? Hey, a on of, come And to generally comp any

Glen Hauenstein

big them issues currency the seeing transatlantic. some poised there's had of seen maybe I think we're And the is year, after we're restructuring in shoots moves really I in us be move. That's the years. over to We've through going as last the are U.S. multiyear green news being uncertainty we're in years the that this and seeing us. are this since around nice We've almost the run transatlantic. move Narita moves continued great trans-Pacific have. domestic for that arena. XX some we XXXX. And there to good last piece really for going a That's after So, airport for strength think a a now major two we airport in Tokyo and that couple the well we're closing Those lapping for

I so people airport ultimately that how we are confident prefer better Haneda But than very think will many over Narita. Haneda. serve a very, And uncertainty to is Tokyo

right the capital. move period short that time. us again airport But superior at our because ripples in would to there may of moving be footprint as a the largest And so long of a headwind then, a to far that be little towards be in think we might the it And bit course, there be connectivity run for the of we and unique going have that's some Beijing for is Haneda. to us Daxing

And been the Pacific signing really for of us. capacity encouraged upside agreement for in the at China the if reductions Today's the an in to Chinese, phase there's to a or no to capacity bring time China the the think So U.S. signing one with signs. the is agreement going I there be thing years. we're to is first good

to China continues capacity reduced. build into traffic is and So being

a always both year. with in to and really And that airline can LATAM, LATAM throughout expect the begin accelerate then good as good we the continue code to in that's we then So and thing industry. strength we've seen Mexico for Brazil and

encouraging. which got we've a is direction sequential improvements think international, are really in the and the I base the for for So us. moving trends all And good right

Savi Syth

quickly has And are expecting Paul and you. general? your could for quick Thank steel and what ask Trainer expectations on trainer, just on just if helpful. that XXXX thoughts I very what generally And you're IMO some come especially now in That's gone.

Paul Jacobson

Sure Savi.

sit strong spreads to saw the we've at in free a where and story. produced obviously, Trainer today million at XXXX last at seen a significant positive really In over year. cash our refinery $XX profit contribution So fuel improvement crack XXXX, flow least relative we overall

about We expect $XX loss last compared to breakeven million performance a about year.

terms So and refinery commercial of the as in sizable procurement. overall the the space fuel our we're both to of performance as the across contribution forward looking another well contribution

Savi Syth

Thank you.

Operator

And our Myles UBS. next of question Walton will come from

Myles Walton

lot delivery has the Thanks. rates. in the line since shut out month Analyst Max changed slower the Good down A the likely morning. Day a there, continued push on

passive through capture behavior let So active curious, I'm pretty way? to I'm curious as you it look Thanks. just management you're your place come ecosystem, view come are a how decisions versus lot you? thinking of much much revenue benefit active some of of more having to at premium about simply to the a taking that? your the in Or you is this

Ed Bastian

the story crystal news year We're operating plan. Myles of We've MAX deviating and plan ball. the our flow. good all not for Ed. based been on on the have this watching We're is us very a last none

long stays as revenue very the of been caution some pools. I revenue pick strong revenues think year important beneficiary up that's extent we're as We the not other continue airlines would a plan I And sky, clearly marginal out we premium up their we'll on job one. everyone most done to the covering that XXXX. guess, have a that's But have of for I MAX nice great. Again, be a we've suggest have this the clearly would I we which to and picking because margin, the

Myles Walton

And work rate? you've XXXX? got what's running on the benefit hot get deceleration I MRO you growth the baked in aftermarket said you know from further might a what's for the growth rate follow-up

Ed Bastian

in Growth rate XXXX?

Myles Walton

Yes.

Ed Bastian

the growth I for MRO the and but do disclosed that's revenues growth really of to is the about story from to service MRO term. that. as to we've couple double don't And some level. think today's more longer a and start three platforms enter platform roles to mature next over two is we big talked There start gear the years out. What years expect the where in we turbofan

Myles Walton

thank you. Okay,

Jill Greer

time one have for analyst Shannon, going the to from question community. we're more

Operator

Stephen final question Certainly. with our Citi. Trent We'll take from

Stephen Trent

time. Good and for much taking everybody my morning thanks very

credit Just should what by mentioned To you're growth your you brands driven card introducing? first through Amex new XXXX. growth degree the revenue the be

Glen Hauenstein

of component $X is year have We we good don't plan. it of disclose the grow said a what $X.X makeup XXXX. the to increases. expect But And billion we very this construction by we from that the have billion to

that growth, any those three changes up the the And outlined card included those new and I include three contract. pieces think make in that we components. core spend acquisitions,

Stephen Trent

little Mike that quick away there one at question business very follow-up LATAM When just follow-up And perhaps about a in think I see early helpful. this are back. that might color, than be you stage a the airlines, any ask. are but expected? little able as to very appreciate stronger you you challenging us not much I just bit Okay, or a Linenberg's you to give you more than I'd maybe things thought expected

Glen Hauenstein

No, this have be some and in optimistic has changer key America. the in going a are the seen great a we these see are as little expectations we agreements. have and that excited is in our to exceeded game going relationship starting what us about put very very, and Latin and to bit just think only we But days just with it's we're starting the very of early place for is interline to early components we're days the long-term partnership can We very that benefits.

Ed Bastian

very we're a echo group. leadership at impressed Cuetos, entire I team with team If the could Glen's first-class the is comments Roberto, LATAM.

the There's to really see faster to a Americas. focus the you're throughout out other lot to opportunity going than our both JVs. start we're appropriate There's carriers alignment. we think probably of I as regulatory good growth up approvals of for the find build going spool there's JV with and this any

very So very, we're pleased.

Stephen Trent

helpful. Thanks I’ll thank it leave Okay. again. very you And there.

Ed Bastian

you. Thank

Jill Greer

portion Chief call. Mapes, I And now the going will our turn Marketing to and it That's over of wrap-up Tim Communications the analyst to Officer.

Tim Mapes

try one to as a can. short many you. as then of brief Thank hold follow-up just So Jill's we I'd these we few your we'll to questions through the with minutes to more have get please team, a reiterate maybe comments earlier

Operator

Leslie will And our from Josephs first question of come Instructions] [Operator CNBC.

Leslie Josephs

Thanks Hi. taking question. Good morning. the for

like platform question, if On my the do travel Thank any that? AmEx pilots And travelers investments tech, something or Concur then on and on a corporate what's an mediation. going like for guys like the sort with sort see of have you of you. Delta becoming second you update just a on

Ed Bastian

other we extended extend to from Leslie outfits and partners by ourselves have of application, get an consumer absolutely experience going all as the to on and app I message bringing the becoming your which first received was experience. ways other we the was easier take see through for so That the digital be the an platform. are at end-to-end to to to But to it going comment customers travel stress not it We're through pilot not on as do what more CES, in the concierge is looking such we're where can brand making compete question app partners closer out Delta space our that's looking like TMC travel as on consumers well way the think going. of Lyft the doing negotiations. standpoint, Fly or with into a a hotel we Delta continue and Concur. and – using We're

pass on your question. second So I'll

Leslie Josephs

consumers individual that's – corporation Okay. rather? for platforms corporate apps more And not just on the

Ed Bastian

is This we're on very really serving some individual but corporate focused on much customers. consumers. clearly focused right is There now all benefits,

Leslie Josephs

you. Thank Okay.

Operator

Schlangenstein question Bloomberg from next come Our will of Mary News.

Mary Schlangenstein

to not Mediation whether seeking confirm National negotiations? by Hi. try in or the on pilots. I the intervention Would again wanted just Board you you're at least the

Ed Bastian

pilots state We the any going comment of the negotiations not are any to questions. on with on

Mary. Sorry,

Mary Schlangenstein

Okay. Thank you.

Ed Bastian

about it's best opportunity they're to be it. to just We think us it's for to a It's not work sure do. clarify. obviously compensated great talking Delta a that rewarded – what pilots appropriate for make and think they together We to publicly our and

Operator

And come Reed our will next Ted of from question Forbes.

Ted Reed

to for this question I'd you in Boston grow American that to coastal so they're imagine XX% I know, morning. new the and star three there that Thank they in added very would like Glen. growth hubs, growing rapidly includes is anticipated fast you. if and routes Boston My

Glen Hauenstein

Yeah.

Boston. dead the an a we've revenue had – the in customers out Jet think choosing Boston, success as I virtual carrier quarter data Boston matter government a and in third fact at us Blue largest just and we incredible with of as are came the in heat from were

So I I we've great think will made us. with stick and progress think customers

the we'll so a ultimately I Boston. be we'll and know who winners And in see are losers winner. But

Ted Reed

American that might to start there? Do you anticipate grow

Glen Hauenstein

to I don't else going know do. anybody what is

shrink. And so think long that I the is and very and a And competitive as think what the we've we going win. in the this we're products long term industry consistently can better ultimately as people products and grow provide what we is services best said to

Ted Reed

All right. you. Thank

Operator

question next Insider. will from David our Slotnick Business And come of

David Slotnick

Or just if about for you the Thanks waiting you're XXX my XLR? XXX NMA? you on Boeing's question. wondering think everybody. replacement. I consider offering the starting taking Hey, Are was to for are the starting to

Ed Bastian

on times many spoken have we David, topic. that

yet. to Airbus that looking at we're decisions NMA. We're We the not Certainly offerings. are close on at looking any

David Slotnick

Okay. that Do to replace those you have timeline having anything planes? anticipating a or you're

Ed Bastian

on commented not have timelines We even.

David Slotnick

very Thanks Okay. much.

Operator

Travel Weekly. next of hear from And Silk Robert we'll

Robert Silk

Yes.

you At stuff. really put lot a exciting about wanted to things quite exciting. as that CES aren't I of ask you a But lot. the Ed some out So spoke maybe of technology,

in system any improvement? just technology your you -- coming me For update can on your Also your how what and core Atlanta distribution -- improvements PSS? to example, you're also

Ed Bastian

sorry. I'm

up. broke maybe. question Could simplify Your you

time a hard lot had We had there. hearing? in a You

Robert Silk

Yes, can me hear you now?

Ed Bastian

Yes.

Robert Silk

along? in Your core just PSS coming core much that? and investing systems, you distributions the – are how improvements And that your how also technology to is

Ed Bastian

interact amount significant investing ways trying us to the giving been and more money Well, continue more digital customers improve we've clearly with on optionality. to system the and experience a and of more distribution choices to

have app. now million this new continued believe we downloads delta.com. just are of the at on We year I past to X updates the release And

are be distribution work to done partners we longer evolve green capable describing that to customers, any of and on our which products continue in to with systems sure space we to work that making and can't screens. in to we're really So all the of sell our that continue trying continue the

services So products evolution bringing the we've to to the that's GDS's working been partners and and products differentiated the all market. all continual what of the been are we're distributors that with highlight a and and our try

Robert Silk

or the systems the Thanks. to Okay. or And related core else anything – improvement? PSS

Ed Bastian

We hard can. Could you you. hearing repeat that? Had a time

Robert Silk

systems? the the related any additional improvements sorry. to Anything PSS core I'm or else with

Rahul Samant

do, I'm which core Samant. here. we that CIO mean is think this PSS I I – Rahul the engine is own. And our Well, the we Deltamatic,

improvement Glen's We then and have an own channel with because advantage the to better We experience entire we end-to-end to because own us And technology. the we it. it point, allows experience. control customer the do

Robert Silk

Thank Okay. all. you

Tim Mapes

Yes.

time for final have one We question.

Operator

our And will final Dan of Forbes.com. come from question Reed

Dan Reed

to share guys hard guys that put It's the data are the gaining that share? in see Where above on competitive metrics you to number. the yield premium a or you actually segment. average finger obviously look can shows where Glen, premium competitive we data are gaining

Glen Hauenstein

this data out XX always U.S. for the Most in quarter. lot XXX shortage days recently in arrears. of a came arrears of data industry. days points or in here third about There's That's data no there's out there. Well, government the

we I really could that. think did well. you So at And look

look could you at could shares. at GDS's, corporate look You

So can there's you find that. plenty of up as go somebody And run data. like you'd have if could we places follow you

Dan Reed

Please. share gain? But Is government -- you're the quality what it? -- is the premium selling is it just

Glen Hauenstein

And is best brand world's airline world to that in the on of best people and emphasize delivering I have quality about service the that. every focus day. we really the XX,XXX Delta continue and the we it think providing

Dan Reed

you. Thank Okay.

Tim Mapes

call. up this With you, that, Thank will operator. I wrap

on call on see look next and everybody your Xth. remind for Thank time we'll today. being with to to you everyone again the forward Just April

Operator

your today's does teleconference. all participation. that conclude for Thank And you

Delta Air Lines (DAL) 14 Jan 202019 Q4 Earnings call transcript