DAL - Earnings call 4 2023 | Delta Air Lines, Inc.

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Unknown Analyst

Good morning, everyone, and welcome to the Delta Air Lines December Quarter and Full Year 2023 Financial Results Conference Call. My name is Matthew, and I will be your coordinator. Until we conduct a question-and-answer session following the presentation.

As a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

Julie Stewart

good and Matthew, you, morning. Thank us Thanks full December and our XXXX for Earnings joining year Call. quarter for

Joining us remarks, update X cost our please we'll Janki. from and After our Atlanta Glen will balance overview prepared today are our take you discuss and performance revenue Hauenstein; the with strategy. so our to environment, of the ask of you follow-up get limit open questions. We brief Dan Delta's the as yourself President, provide can CEO, possible. to move and CFO, questions. to the question our we'll will on many analyst a Dan an that Ed will we After sheet. that call Q&A, an media on analyst Glen as Ed Bastian; and

to a future and As expectations that the or statements today's involve forward-looking forward-looking risks statements results contains materially reminder, our cause uncertainties that beliefs represent statements. discussion differ events. could from forward-looking the All about actual

Some are filings. described cause non-GAAP special in such results items noted. of differences unless financial exclude SEC also discuss otherwise We'll may Delta's factors the and measures, all that

with a call page non-GAAP Investor our reconciliation at find turn over I'll measures the ir.delta.com. on can You to of Ed. And that, the Relations

Ed Bastian

billion XX,XXX their I in record add million throughout and carried more XXX,XXX that to these the X peer Well, us share operational customers quarter million the December a with outstanding results, other thank We operating per carried sincerely the this system on revenue $X.XX in everyone. reported holiday you, our quarterly than factor joining mainline XX%. serving the our XX full with Julie, earnings holiday history, year than for completion #X travelers set and was put delivering posting we period $X.X and any flights appreciate in this customers, morning. X of Delta than fewer industry-leading on and performance. we and record December want you work team or delivered amongst we good morning, Quarter aggregate. our results. our Earlier strong customers. today, quarter. To over an Fourth higher that margin I'd time of XX% in XXXX context, season cancellations Delta thank

quarter December X to a plan. our marked Our results strong year close of X-year

improvement pretax earnings billion XXXX. For flow billion, generated near XX% our of over XX.X% was income in year. an the X reported $X.XX employees XXXX. quarterly our where highest dividend. Return a on consider years a XX.X%, of invested X-point across short proud tremendous A capital sat we amount especially from ago, of progress, we billion share, improved prior and delivered was I'm so you by the and and team cash the with X of if higher second $X.X culture, announce I'm our year, full billion of well-earned on free $X.X we'll EPS history We per the back doubling reinstated and long-standing we We $X.X board. financial the our leverage Valentine's turns a on success $X while into Day. of a full investing Sharing and business, revenue be is sharing than our thrilled result pillar in profit margin to that operating Delta's rewarding our that

profit more be last of expect year's our XXXX payment sharing For will eligible payments than estimated our largest X combined. was. will I compensation double approximately our the about XX% employees, be competitors payout what

and why our yesterday lead every admired recognized Delta are the our of customer world's meaningful Our and our well-deserved made the the service Fortune, we the our bar journey deliver the the ] We was investments focus why us and to best for for the relentless long the industry-leading safe, our pay stage operations provided in most at on the our They [ Delta industry-leading our the consistently raising operational brand been XXth that known pay, In people, XXth the deliver loyalty excellence we has continuing Delta in Glassdoor caring people performance customers. as philosophy reliable reason team, named XXXX, operation, performance. of best-in-class travel with company employer In made increases investments country. that and as industry, supported by for customers. for. the operational

again week which Our most was America. by recognized in operational excellence yet airline on-time the named last Cerium us North

are customer launch as for international are foundation seats, customer XXXs Fast XX a Our are than options goals. members the with building Today, grow successful the premium WiFi and fuel These aircraft fleet for operational reliability more entertainment with an for we of sustainability engagement flying Airbus XXX-XXXX offer of experience XXXX. be strategy complement we more the our our the with SkyMiles further world-class and brand. higher over consumer announced for in-flight for replacing, will X experience SkyMiles Delta. people delivery foundation Sync, that more XX% experience we elevate Delta enhancing supporting and starting great and long-term on are amenities. These and order free travelers aircraft planes they'll gauge And the trusted also and our that efficient with premium in Delta's members. our we

year. rolled products by end out to the We this of these have expect globally

Delta we state-of-the-art a named traveler. will of City in the experience. We and world-class We schedule, provide completed facility ] Airline business our a Salt markets Lake Club generational XX On Best to new the are Sky customers this Delta transformation LaGuardia of by expansion ground, airports adding some XXXX Sky our of opened and rebuild ahead the the Lounge year. North at Angeles the of America's airport of for a phase latest our clubs complete [ including that was important building new future Los and most months the

with provide visited Fly experience. app than Delta and increase Our employees much billion X agility self-service tools year XXXX over as we our using with satisfaction. tools a higher XXx times seamless with continue our customers overall better digital the Customers investments almost last and more to more often work

As XXXX period a begins, optimization. restoration of enterprise has to moved from our

on elevating our efficiency We flow. in delivering the to are and across continued excellent and our company earnings reliability experience growth improving the support cash focused customer

We supply, growth a services with expect in restoration. corporate financial particularly travel after is to network healthy remain base demand strong to travel for is Consumer experiences our premium several provides. continues priority normalizing from continuing the to to is customer with industry demand into year-end. On of and a spend position remaining top years accelerating Delta goods improve that shift and

we and free cash guidance $X and by billion JV $X for XXXX, mix $X Delta's XXXX are higher of as CapEx positive that range X%, that leverage full we below in are industry optimize an the our as domestic the improved profitability, cash to discussed into backdrop, Free seeing is global to mid-single-digit driven our balance providing as June Domestically, are inflection we unit Internationally, at revenue rising we guidance our year and of flow plan growth. Day per we grow than of billion refined sales. capacity cash supply expect to growth adjusts in another XXXX, to up better demand coming we've X% plan. year a lower production, and we For network billion. to to partners. With share of Investor $X our earnings cost strong $X

growth will strategy for reduce and shortly, providing in to we and reduce the closing, company. creation of on XXXX. continued the our to Thank will As show advance the it quarter. In our financially, our again while including more continue the a flow XXXX, people customers. significant support our I industry in Glen. March years more that Dan the metrics. and that, outlook for remarkable for I'll Delta drive you ahead world-class grow momentum well could sheet Delta customers, come. to is debt, a to with leading our and and experience over our for am for And balance operationally positioned our I you we confident and our earnings Glen detail cash leverage about in and be investment-grade to further the new provide owners and in towards value year turn will delivered returns-focused build Delta with excited what's not earnings,

Glen W. Hauenstein

Thank want by Ed, I year. start dedication and work thanking hard and their for good to morning, this everyone. employees all you, of our

growth delivering For the X% execution billion, Strong full of $XX profits. record revenues higher above our yield above with on Premium in Delta on been led international including our also premium outpacing we reflecting and XX% about significant rollout delivered revenues Delta's is year, revenue, resulted than higher The and load the loyalty streams, record unit cabin. and with We revenue international the year generated the factors margins revenue with XX% about Premium record nearly industry pre-pandemic year has and prepandemic generation paid strategy all strategy. outperformance XXXX, levels. Diversified complete than against main Select long-haul expectations. commercial of of differentiated finished XX%

the increase segment improved As our strategy, we and X structurally continue have seat margins. the cabinet through premium mix product to our we international

up sales year-end, growth December share to December unprecedented notable acquisitions Travel growth In portfolio. the with including per and XXth this program loyalty traveler, companies, launched revenue month of of $XX.X cards increasing and in expectations million. traction XX% in further seeing for our year. Delta continued billion, medium-sized Our XX% the to Survey led business higher was than in support double-digit exceed year the to gained $XX to the the Services following sector strike News small- was SkyMiles Sky Corporate revenue and prior and XX% over corporate named our mix business media growth into during Financial quarter the resolutions. auto Technology co-brand successfully SME in December. spend year new our accelerated Business with record co-brand for premium commitment recognition providing Amex year-over-year quarter an XXXX. Total #X Delta royalty the important record Miles a was momentum in in consecutive of segment. Airline with benefits

year highest are than in this While sales cash our X% day week. experienced unit were with highest revenues in lower entering year, momentum our last had history and we the

down is on growth expect over Leap quarter revenue Day March unit This of will from to a the over includes X X%, flat basis be last We sequential which from year. point growth a of quarter. to X% on December improvement XXXX X-point year-over-year X% revenues X% implying capacity

travel to year. These quarter higher our mix, faces when from headwinds dynamics March last of lapping operational Our international challenges. the X compared and normalization credit utilization include competitors'

well shoulder capacity accounting business our the period, through the core largest in with revenues. Latin revenues These positive strong to improving the expect March unit headwinds, quarter. than perform encouraging Looking profitability headline connectivity are Pacific, of domestic lower transatlantic, our supporting numbers environment, in JV fundamentals grow the domestic expect quarter. rebuilding In growth to developments for through with in in March suggest. faster inflect are entity majority these With demand and we are partners, of the our the revenues and networks but the short-term the to with we continues unit the investments international to unit higher in March quarter. we improving The

remain Turning trends and outpace GDP outlook points. consumer X to to our continues overall to experiences on for by Premium spending travel year. X the full strong

our solid as This from more our recent survey of is to with nearly last in improvement expect survey. in XQ. We growth a travel in than XQ expecting double-digit respondents demand travel business XX% or in intentions much corporate

builds XX high Our in competitive our in investing margin network commercial Delta's by future. strategy streams growing and our revenue on optimizing advantages

optimize travel First, on JV as is further and hubs the optimize This hubs optimize able first trends. in we've to and partner Delta's strengths our have to capitalize we pre a demand set been of to pandemic core a unique evolving have opportunity to we since good now reflect time network from.

through revenue Delta. important sources for differentiator high-margin an Second, remains diversification growing

We have services. retail adding improve continue as seats and further adjacent runway our more to capabilities revenues ahead our travel we and aircraft premium loyalty expand

XXXX American Express levels. XX% over remuneration to We expect grow

transformation. the generational airport ahead. Finally, the future we experience leadership our extend and travel digital next-gen that, And in entering In through Dan the the turn With strength Delta's position incredibly momentum. to proud financials. and excited I'm our with talk to to year grow the brand builds and in closing, continued fleet, enhance about of investment, team's Delta's the lead with we're performance I'm are in in to it I'll XXXX. premium will XXXX, investing over years about opportunities new

Daniel Janki

of $X.X morning and last our the flow financial of points year. to Thank CapEx we up billion, our X you, and We another delivered Glen, everyone. of cash expected $X.X double in performance billion. nearly meaningful generated from restoring and income of $X.XX our XXXX of milestone foundation. XX.X% was operating good pretax technology. our $X people, per enabling Operating lead We and free generated reinvestment was of billion, After share year earnings in billion, fleet gross of cash industry. $X.X to last margins flow

the ended of unencumbered included During of billion billion and the $X gross $XX year, liquidity We paid debt. to assets we of $X.X of grew more $X.X accelerated than repayment debt. higher with our cost billion year billion. This

year. With X grade outlooks Our notch during leverage invested XXXX. reporting with Moody's, progress, X.X% in of our investors. out the to margins at at improved were last investment X we of Fitch X rated this in on year-over-year, we up points $X.X our and both closed share. our the of finish capital reinstated $X.XX last in away up billion appeal profit guidance. ratio second times. XX.X%, over half our December at S&P quarter X.X%, per yield-focused dividend are on Nonfuel with improved grade year strong, investment resulting line year and year, costs turns earnings improving the to unit credit the only to are from upgraded Return operating we broadening We now rating S&P pretax summer, a of

outlook. our moving Now to

For March X% to expect $X.XX per the operating margin. we earnings of share $X.XX approximately on quarter,

down We in $XXX gallon expected $X.XX more price be The expect to million be year $X.XX profit March per than XXXX. benefit. a to spreads to from is $X.XX early quarter crack to $X.XX to due last refinery with refinery elevated fuel

and X growth, full digit with With unit earnings quarter X%. efficiency unit approximately a with reliability gains to March year to be single expect to period pay moderated. has deliver on expect the XXXX we've capacity intense to we performance. The restoration per up period nonfuel the operational focus Growth core over our For network. $X training our improvement With And beginning normalizing, of full The we continued of in were up cost is year, off years and growth unnatural of last are profitable delivering low rebuild intensity $X hiring costs outlook investment most to a our high optimization. share. of and entered a restoring with reduced across the for hubs enterprise. in

over to our engine help through people, will this to expect that experiences We a we On maintenance, efficiencies heavy that number deliver earlier. the year the checks turnaround customer year, fleets. fund investments resulting have spoke of Ed deliveries in higher and of airframe driving from the the and same new constraints Flex extended the last decade, timing chain industry-wide supply times. our are of higher and time, continuing, the reactivation costs aircraft At

peak and as For $XXX the the period. summer improvement maintenance expense year, for full up to we XXXX continued be over operational million we in reliability expect our prioritize fleet reading

cost improve and from growth investments We efficiency March year. Unit lap expect second quarter of in XXXX. levels deliver part of early in made half expected be is the increase the majority of we to as the we've the the this to

Now to cash on flow.

preluding flow cash of of We flow cash $X billion driven free a lower The and to was of $X expect free CapEx of by sales. improvement mix billion higher growth $X CapEx in profitability, in cash billion. cash flow,

utilization as to debt sales normalizes. aircraft XXXX cash XX percentage for overall cash base $XX $X and a pay billion for of larger asset deliveries, We to unencumbered of credit to are growing bookings As approximately travel expected billion. our compose plan maturities

our investment-grade returning leverage the for evaluate reduce to remains sheet year we Delta we our as the under in closing, continue continuing positioned business reach well as allocation. growth focus X-year plan targeted leverage. In to We invest to while the dividend shareholder foundation. We'll our on focus final is of restore metrics, expect financial a capital with to enter balance Xx, to returns to our

capital are continuing flow cash laid durability, at we the to on an free prioritize with objectives earnings emphasis and We Day out Investor efficiency.

industry-leading I'd of With turn Q&A. and like for work every people. is of dedication Julie do of Our a to financial the performance that, like I'd Delta to and back each to they day. what it hard for thank result the operational them

Julie Stewart

please Thanks, how queue can up Matthew, the you remind analysts to Dan. questions? for

Unknown Analyst

this we'll analyst Linenberg from from Deutsche Michael be time, is Instructions] Your the question-and-answer coming first conducting Certainly. session. [Operator At question Bank.

Michael Linenberg

probably Dan a to This is question both Glen. and

extend be XXXX AXXX knowing situation to new you additional I in take the some you to have additional to through in where in think still we the years. over until going lift these see keep going fully fleet. to your XXXXs some that airplanes. to if you was are into of enough Are delivering XXX retired, that not, is be have them coming the be by and With do you maybe aircraft bigger Will a older XXXX. have I it deliveries investments Airbus maybe know that, of next widebodies running few you going to

Daniel Janki

'XX the on period the the consistent step move we expect you XXXs. through through of to while pretty As back XXX decade, the continuing time we retire a to through of that fly through basis as half XXXX,

Michael Linenberg

you'll the XXXs So to XXXX, beyond Dan? fly continue

Glen W. Hauenstein

Mike, have long and out It retired I don't grounded by by XX. think have intent to them our XXXX. international by to XXXX of was haul fleet the

Michael Linenberg

And Israel the March way restart second good that to don't Fourth Okay. my XXst. in question, was Quarter? services impact bit the Israel Glen, then services of services Makes headwind They're a think sense. is what those quarter a the by just you in the if to due And the younger. the about the cancellation

Glen W. Hauenstein

we clearly hit the to markets. because as move other greatest through we quarter, So assets redeployed the the Mike, the initial was

XQ in of in course, the and X So XQ impact and was assessing to I very really Israel. in we're point a would that And issues little revenue it goes beyond. of say about

how our April. see intent priority sale of to for manifests customers current that our move and and in always our be priority. safety is we crews, that's first. Safety going through, loaded but have We'll our Our

Unknown Analyst

from question from is Becker coming next Helane Your TD Cowen.

Helane Becker

think, especially that X sector. So in corporate, -- were you tech One improvement for Ed, on mentioned I you CNBC seeing this the questions. in morning

kind of by about maybe if region? corporate Glen wondering So I'm seeing by you talk in or sector and geographic can you're what

Ed Bastian

his Glen color Well, and add I'll well. can start as

not a And number I continued again, of And again. the being, laggards, office returned to tech had hours opening driving the offices there and it helping seeing is is to largest it the have tech traveling and a see to been number given Again, lot in the had consultancies we've travel. think somewhat office of by of board. reduced are of turn we terms seen improvement also We that is starting which corporate clients sector, essentially to had that as their some in of have companies far, we're finally laggards. well, that their across

have The also strikes the following auto auto clearly rebound was other nicely, rebounded to thing Quarter. mentioned sectors the and I in entertainment morning this entertainment and is the starting Fourth

Helane Becker

That's very And my just helpful. then question. follow-up, for

going about you're Are lower. international your you international, February more coastal just as schedules, that being your the add noticed seeing seasonally service with I in As you or elongating would in those that well months season to especially you so maybe and January hubs move extend think east. international into travel

Glen W. Hauenstein

Absolutely.

previously, is we've pretty really now seen I October is disclosed March to through think we've strong. and elongate seasons the for leisure travel that Europe this

this not as of in is strong when exists. summer. peak that, actually our our optimization and how is But is capacity shoulder Of to the of demand we course, again, fly part still to tailoring as the response

Helane Becker

nice Thanks, Have helpful. really That's a Okay. day. team.

Unknown Analyst

coming is from Baker from Your JPMorgan. Jamie next question

Jamie Baker

appreciate across cutting that's RASM, up side improvement? you're pending seeing is nearly exercise airlines your revisions on interesting question Anything growth domestic we My it in be behaving supply Or of on? capacity in the the whether inflection the simply Glen, how seeing else industry. capacity. are any should tighten the focused I plans is driving we're a

Glen W. Hauenstein

post of of ], head around environment. And pre-pandemic rebuild mentioned, just the pandemic, the contributors what pandemic [ corporate a to end slow One it. are at we think, this as in is you've the since Ed highs and we somewhere but a it's XX% right got I couple year. the Well, to conditions improving been restored levels Jim steady into

turnaround. for I that, is exciting backdrop think, an domestic a So

to to going the segmentation of forward. higher lowest year. we to we're customers our ago, Of some worried I relativity continue the only course, to we the I we now ability but those market. enlightened to to X entire working fares trying And of continued in are and drivers pricing. And have to also as were we head competitors. I led really of improvements in the And talk that's the we about now people years the through how have within and in can't ladder about just and rationalization our think segment and quality the capacity, the moving know experience that's be products. ladders this a more key way get worried

Jamie Baker

appreciate Okay. And then that. I a for second Ed. question

to a interview the Phil out factors, fast give the will thing. Delta like, year don't to outcome simply your hey, further morning, do leaned the of there I or you If you ask it that you will for think do today, the consumer been? primary sort During still mentioned that have think hope or has forward into be and or, based year. maybe holding even from with way upside $X take, indeed what I outcome, on guess the driver what been exogenous premium, know, fuel can is, do this control you're this is you we earnings better cooperated think

Ed Bastian

question. get Thanks, Jamie. Sure. the I

a into bunch see Street our we'll I to there confidence that guide, think confidence a in where wants to for which I see prudent where months, is bit know that's today. the and think last us look year, is level cautious what giving causes X I have in signaling EPS $X at And to hitting the the we great we've $X have XXXX. are to a sit that been guide we the bit level we in be is of and this including not the out. Clearly, that volatility what macros they U.S. saw the the to be quite front we And energy just fact how the supply testing, cost progress the not constraints geopolitical anything, prices, in is a we the see how me, improvements, political we the Energy volatile prices a the the season. to not play industry to and unabated. supply morning bit this chain just on continue that chain, world. that election We're every this better. continues if nearly both get making but seems are. be worse, of in that which around news -- that

and that still number myself constrains to for So said, my to growth and increased stretch team cost. That our this internal is that get all year.

now I I to get weighs think have the a same we XXXX. just that and and set by overchieve, reporting hope year We on end. like also we see possibility that we're from I of $X But And to a a gave that did think the lower way bit on that prudent, I'd $X in maybe to and macro the we type little expectations be to should a guide assessment, there. to came in top think result.

Unknown Analyst

from Research. next is Your coming Conor from Cunningham question Melius

Conor Cunningham

regions Just the in on general.

more upside in think that terms fair still international. see sound a bit obviously lot but You constructive I mentioned you -- a of you of domestically,

If would expectations think your overall I set like in helpful. could be you on level that just 'XX, regional

Glen W. Hauenstein

domestic expecting comps continue we're move think I Well, as we through get to the easier improve the year. to

there's as on transatlantic XX% pretty the place. of really our fantastic transatlantic. of through in is really bar to hoping a year we the So we exciting books the but move in we there. high What We We're bookings that, April, the year. some see we should a momentum have month had for beat about where have nice

think high expect. at most which sitting revenue single unit wouldn't digits I have We people up,

a have Latin not build we incredible as spring have where And to America being to partners, early those year. lot Of last dividends. move positive we at of our We're revenue. South we least, into sit rates capacity come we through inflect very Pacific that booking very nicely of for amount a unit that's returns down, but and an is the but the expect ambitious today. in profitability, there, absorbed summer LATAM, we course, territory our are go as with growth and paying lower in albeit improving our strong favorable

the So where year. little out as sits rationalize we're excited South move that saturated think will through about and this over beaches, we seem I America very a winter itself the

Conor Cunningham

costs. I really thoughts XXXX the was cost stuff. provide Dan, seems then, to timing And it you maintenance like type hoping could on trajectory. if has a just do shape some and the that. with of of Appreciate that of It just lot of

any Just color -- helpful. there could be additional color

Daniel Janki

year $XXX was said of up maintenance focus million first a I the Yes. the for with year. on part the

The But you we're will pilot. efficiencies be of think it is year. is just the other progress -- you about example efficiencies, is piece through we're down when hiring The on One as we're build fully staffed. one That half place the to associated the half as you year. year. -- training centric back And that summer. over from the get levels ready front XX% with historical last in with again, XX% of for normalizes down it really

of beat drum year. the steady efficiencies good pace a just through as So we

Unknown Analyst

coming question from next is Trent Your Citi. Stephen from

Stephen Trent

], AdorGlenn how for you little a stuff goes. addressed be in an earlier you bit do the but might response, but chain supply it [ This think

X First, we plug. you engine, GTF XX are have to you door X come the we've the now? the Or from to more could reached months now concerned bottom? there MAX Do be kind think of

Ed Bastian

we're to the the I is separate [ implications case. more is issue. no lot supply think to a I in through if mean I'm one-off not I chain Thanks, -- thought this X engine you hope MAX of that's referring am on issues a principally Stephen. to of we the work post-pandemic I ]. Pratt referring there's world, And lying Ed. continuing the This that business. but surprises, And issue work the saw. side that. of to there's the be I'd I the

lot a reliance have their and ] challenges on of have that [ facing We Pratt they're chronicled. been

it One have and of also strips the lot with resources resources that business see engine the existing their engine from side is on against our as a we incremental suppliers put that the work the us. resources maintenance providers of away on things their

lot sufficient working and manner were but to level, to through and amount just of the the it's of they the the causes them. on only times up. a Pratt more factor get in on not term and industry business. lost original they roles be parts So service, into with an with entry week world the due spent and taking times everybody our ] need the back get time we're to [ challenges, where down lot that And we also of and pandemic, a we this gee, higher in repair a build, to in importantly, the delays a side all not the the engine it's cost has experience suppliers experience go in time it tremendous to have turn that to of

Stephen Trent

mean, from to spooling Any correctly. appreciate you're seeing a as appreciate of versus with All I you sure deep I follow-up, the wanted is mentioned uplift I market right. up, well I respect that, And Ed. on as of short-haul the color well. but high-level make LATAM I what the that presume JBA doing LATAM? my Latin to sort to respect lot just understood

Glen W. Hauenstein

Yes.

There's and JV perfectly. was we're launching short-haul But resorts, a as prospects excited we're it incredible our described on the very Deep there. LATAM, by you coordination into really the about lot particularly with the the capacity Latin, performance long-term pressure of the of year-over-year. and the on short-term where America a think having South I little added industry

Stephen Trent

appreciate I Glen. that, Great.

Unknown Analyst

Bernstein. question is from David coming Your Vernon next from

David Vernon

led higher run of little a kind you of around you of would thought to missed as XXXX you Dan, year. the kind about have that see XXXX? and XXXX what of beginning you some for single-digit than position of that a happened maybe as creep then kind the risk think you down So as give that with CASM bit sources the might a us in that cost in a of outlook of far talk ex us as in kind low to the what to cost backdrop, of Can in

Daniel Janki

David. X yes, predominantly, Yes, I drivers. certainly

and was X, those different that. the -- the where and single focused XX% ended we're That into second And the associated the that. where lot and the up in more from are were And that, was got drive we do maintenance our that teams in hiring one. in over the drivers to of -- fine-tuning second think planning of restoration to what airline, back into a you we things to as operating are what that efficiency plus actions were look and are flew in we go off. investment we talked took a sets about growth New and as when on about to And at was were the the just teams maintenance. capacity First, those X% the biggest you year this less and and really you're on we performance kept that to growth that associated as operational you half to we the stage paying the the and the normalized with XX% and business. environment. When invest the Year to executing in X cost it backdrop versus X% less piece the we focus thinking with cost training we here, lot When a growth, really

at doing Quarter the aircraft and look the to over there's XX%; go, you If of down lot a XX%. service still down of a work maintenance cancels lot maintenance performance, Fourth but out

normalized that actions taking around us but net the in can So consistently really really around stay that they're proactive out. execution that the a that's environment, aircraft day stage time day when reliability, sets those getting touch what panties, for the the efficiency. allows that you on and you're after

Ed Bastian

the how and full is Quarter, back job David, our Fourth we a It's X.X every have results to hiring they fiber done were just to last the was bring remarkable, being of business resource at been overstate results. We're in up it you try again Quarter ahead operational our to could in Fourth and And the now, taken over phenomenal, hard here. okay? see if years. has and the of and it. that get great jump the to team best of the there hard I intensity has

the and those big we just we that efficiencies. as I tweaking return normalized to think I don't enter to posted. available that start know we And us know how is, start think, as ever year. I opportunity environment this we has much yet company to have the a

be of to X-plus is EPS been, think great $X we to that great, some going that last to opportunities. paper a number it's team my willing the to expectations number. quite opportunity can in kind think very it's to I forecast on this has years And I'm And get build. significant. put we're hoping going the to hard of I because question, but of for internal part the that different I'm above yet, there. that's some of see But earlier Jamie's confident

David Vernon

little up maybe of follow that to on Just a point bit. kind

the at going we of at Are look we set about of If kind here? of hard X are of think quantify it's all efficiency out the which gains are or give you, Is Or appreciate getting the for costs the kind just of pivotal of that side? optimization a the there large just us super that sort and working get I across of optimization sense the it business gas a some a for improving and it chasing at more sense things driver continuously the trying about around aircraft? that ahead some what you little friction can picture-wise, you of bunch be what projects? big looking to to it X I'm utilization a are of is things are these Or and about is dogs in do of business. optimized? staffing down about to

Ed Bastian

purchasing, to of have Glen want outcomes purchasing, somewhat it's revenue business. just level The point it's a we of side. same more our better using older for the to And at this amount network you David, not been essentially tremendous the we've a today XX% and on the employees fact behaviors I cost side. what operations, It's think the Consumer mentioned above. lot. this we It's point, on the cost have changed driving And also that pre-pandemic, all opportunity models in X.X than had how what line. revenue of have patterns. to team know But predict going and the the around efficient. can years and they last operators are to behavioral and start actually on with to to a efficiency. see baseline the the register his you're cash count they drive what will they've arms cost use of what when we think get got savings full the which when travel ring to And over -- they're consumers now good operation I

it's the little but a same bet at to a So it's get really I bit, on come But quantify the there. we'll optimistic know I'm hard time.

Unknown Analyst

Stanley. Your from Morgan from next question Shanker is coming Ravi

Ravi Shanker

sounds pretty summer, know the and to commentary through the good, of be the people booking bit unpack Paris a on that detail break spring the I in seeing demand maybe indicator more? [ more on you're you kind activity forward little what have you can but even of ] through forward your pick over kind might curve what traveling

Glen W. Hauenstein

Well, visibility And book for I pretty the as the a of on factor as response transatlantic well higher but X higher yields. to bookings have think we good I a the early season. it we have mentioned load as other summer questions,

will little break, see are the positive resorts a accelerate as far but And we for And buildup we probably we are the as continue capacity particularly over closer have those Inchon for, earlier, to course, the bit spring of to lap Japan the to we watch things in a transatlantic. as won't too to well the some U.S. as can strong time, out booking expect for U.S. this in things be as as [ we both out still Pacific mentioned Pacific, X closed-end the year move indicating rationalized through very to season. peak that then year, Rash, quite and move The as hub our beach as we of through those curve. much great industry look has, winter ] of get the the demand, the But a spring profitable season. So as unit revenues I

as exciting hope I can look very plan. we be our we out forward. So to

Ravi Shanker

extended missed mean, any grounding I aircraft kind for with issues in some the if but of potential of And inspections XQ you you kind apologies this are having earlier, guidance? some benefit And of is short I your -- it. of of did any -- in the Got your -- that see term? for spillover that do peers

Glen W. Hauenstein

number whole schedule we'll in right But stays for out. our significant Seattle, a for cattle. Yes. of the significant I But CL It's of minimal see grander improvements had in network. out scheme things. how of mostly seen is cancel where long that they've what say We we their wouldn't to have of significant not see a significant now, it's portion but

Unknown Analyst

question coming is Pfennigwerth Evercore from ISI. from next Your Duane

Duane Pfennigwerth

Good Or that? of second morning. spread evenly drivers maybe just pretty it the cadence on kind and non-op year? the of savings of more component throughout Is is the it weighted? the half

Daniel Janki

year-over-year targeted is delivered pension The so as benefit reduction its basis. that pension associated flat or no a the return, expense. on the million job. debt at really we that. interest $XX $XXX driver drives slightly with we've be It's And a action great by accelerated above the to driven to million, The expect team did headwind

equity little You our pretty the as bit due be get we partners, a to expect year interest through savings in the but throughout you around reduction of some to coming -- earnings the the through some consistent progress of year.

Duane Pfennigwerth

a just follow-up for then And Glen.

job entity steps nice used is of taking XQ. to and a the on done lot active normalized. to some than to to you -- is speak seasonality sequentially could by where But XQ You've where kind different maybe seasonality a be, just it capacity it

in key change you'd seasonal patterns the sort of underlying quarter? the in here into highlight any So first trends

Glen W. Hauenstein

Yes.

but norm international of is an norm is at seasons. and new what 'XX, mainly see we're new think our I different our extension I the than

that, bit little it's seem Europe, thing we'll I that and strong keeping the the capacity season, or is just trim with Europe mentioned, we're just an of And people is to through then year just So as But was those Northern up. board earlier the plan Caribbean the call I and with bit work think other look, again Southern will a catch the up on well for go that later. have XX%, little if I down the starts as are beach, very XX% year way -- a Mexican much the summer beaches used you mentioned into up let through we that imagine this up in next that particularly we margin, I October having kind those demand increase. And a through it in keeping the mentioned little through be August. March to that back too June, the peak that question now April an is a -- and moving demand earlier it the across all that year. And trouble capacity July,

think So with a spot demand. generally, here supply we're and good I in

can see. we're As every and in positive almost months with -- exception far entity future the as the lab in ]. the eye all of all almost the future [

Unknown Analyst

Brandon Oglenski Barclays. Your next from from coming is question

Brandon Oglenski

lot reach that. I you guess, And guiding the at prior your mean, here Ed give from back of are credit. Dan, I top not looking people or to effectively a XXXX I you targets, guys end think

the So of low. my your stock pretty said, that's context that question. still is valuation But in

would effectively peak about say are in profitability 'XX. year profitability seen and I that airline think flat concerned your this just versus we've investors 'XX guidance

investors maybe back can comfort business of mid-teens? give that in questions, what can control your to this coming prior is should higher, profitability this earning these be maybe that beyond get some So looking that year

Ed Bastian

set think When were in I Omicron you believe and Thanks, being we when just of target, there. Brandon. was 'XX. it was were newest December [ at I'll never right. exchange. about that the ]. as you're forget Perion And you we announced the

crazy years, news of X, had about the us to to but ahead And as to how I pause candidly of important well back put little we're not for really plan, was short we given this in changed and be just think us thing has not and along going, was a through I may and maybe And great is a what was investors level see that has out if the me to for first a was progress. it instructive that at, go thinking the them X-year are of So way. the of future our let the it for bit I if longer the knowledge plan term. kind thought but as X say we where that bit term,

I known constraints. higher supply no the cost -- higher clearly rates was inflation back knowledge -- of extent And think The chain then, the not not known back it's most the we're have not face. known were labor, certainly then. full challenges importantly, of not the we

very a macros to it's also this And think really you've of I you from targeting heard we're done that number as we But I get year. And when all job do. us control. we those facing. encountered, that we good I prudent I macros think So some the that of a think about to $X can. several think to of am that give nod the questions, we those we've controlling I things can internally still

for million at taking cash $XX derisking billion optimization is of guidance, I mentioned, with balance all that We're are is doing an the free sheet and I benefits we're we're our opportunities, quality leaders this important. delivering million working ensure to year. on $X across billion and this work of we're hard reduction and looking the with part run I optimization product, our to that single which still that a $XX think debt $XX are business. And between cash. on think down the every all track flow unleashes billion that as excellent And $X target significant, free the they

I So way. lot it of I don't noise that you're at guidance. that there's lowering -- we're think really look there's right, a

it's of estimate with And a nod some you to wanted can real deliver to this confident year the we giving give there's we to are upside prudent realities. think -- macro here. a towards I not some I what

Brandon Oglenski

here business? doing now that for offset longer. is maintenance the issues you year, maybe term not MRO probably Dan, mitigate favorable then, there present planning longer if And to have your what any I been guess a and longer-term in are over

Daniel Janki

It's that as the cost. relates XX, on only allows horizon, XX And here a And extend growth. XX get more capacity continue us more is us we're as into planning continue we but we look The in our better we're around it to get to months. how that think normalized One more our not stability balance a period plan we from certainty visibility and that where how out XX, and I fleet where think able into give we allowing to rolling we with will run to that I us back that.

sure X that do X but with has to that, closely chain this start do, an lift with our out. in the is Delta piece to supply we entire things have see that also grow, other relates execution The improve on to on platforms. that do regards focus has clarity to to as got and think, across on we're here, to start strong behalf years Delta's MRO, working continue before, to be the And can getting and need those talked and to team partners continue just grow in in then all and of we earnest I yes, there last the these been, in their improve MRO will to really continuing we've the tech that got and eye you'll to but piece to an years about opportunity and the fleet, regards time. And foundation closely as right our partners in we've business, The Delta heavy work the that we've with year, continue it on to making well positioned we'll the to that. all they ops to be over

Unknown Analyst

of is coming question Didora Andrew from next America. Your Bank from

Andrew Didora

A for Glen. question

Is what these the the of core you revenue will ramping capacity share think up kind hubs? of your what performance year growth XXXX. benefits started be back I growth over quantify middle And the you your can any way your in out to build in of hub this were this half? of growth there

Glen W. Hauenstein

core will to, I our majority think alluded just in hubs a we've be hubs. of partner or growth our to

into once-in-a-lifetime XX% process leading So in gateway and We huge dividends will we become carriers this are us markets opportunities Los our and that as to we like for ascension in head Boston, Boston probably example, XX% paying in coastal those the quarter. growth of with revenue the for leading 'XX earlier be locations. feel accelerated the Angeles growth our with to the those unit for

pleased still core we shaked to It us this with that's for it take really given probably But year we're in the lower and through have out, growth XX year have. do really, what into way hubs. rebuild the working next some we're months. next and we more our gets So XX that rates will on to the

Andrew Didora

$X Got just, helpful. billion a this year? I of payer? years of there's $X the a to cash become any thought if tax are there. when free it. curious Dan, was number Or any to out, taxes expect assuming just you cash but then That's do sort of And in flow, cash you billion it update

Daniel Janki

cash cash beyond. this XXXX year. starting we and that tax payments No, and expect don't expect taxes in would potentially

Julie Stewart

the media. to going go now analyst over we'll final Matthew, to before our then question

Unknown Analyst

Savanthi from is Syth James. coming question Raymond from next Your

Savanthi Syth

quick a me. Maybe for X

Just you talked about year-over-year, down pilot the being comments and heard from XX% industry. hiring similar you

year? to that means kind drag revenue of if or expect regional XXXX, And you that and from that can next operation cost what curious your in Just what year for of operation. a either to and much this was

Glen W. Hauenstein

potential So thanks the talked what the could for are that our upsides $X. that some other you think into themes get that question. And plan the to of we've well I plays about that towards are

instability years had months is of our X we more lot didn't many we seen really is ahead how We have in accounted What we the planned stability. really utilization we've of where regionals that there to hours know for what the of fleet. stability after X haven't time. full for And a

to -- have less we than of the airplanes ground utilization on fleet. our have So we than still we and are XX in XXX

the the be should would P&L. lower into that of that So more hiring potential availability mainline to in our translate at upside back the half year,

Savanthi Syth

Yes.

Julie Stewart

All the right. to Mapes analyst over of media I'll start will call. the wrap questions. up it Tim That the now to portion turn

Tim Mapes

of the and regard Matthew, we instructions the you, please. for reiterate media, members to follow-ups, the call Thank the accessing with Julie. if could

Unknown Analyst

we'll Certainly. Ted a is time, first from session. [Operator be question At Reed Q&A conducting Instructions] Your Forbes. from coming this

Unknown Analyst

age Delta looks I'm Glen. ] over if passenger It's asking pass the in And also the revenge travel in whether and for wondered events to passenger of [ just I are in the XXXX XXXX. we different is travel.

Glen W. Hauenstein

[ of an all mean, in opinion, aging you ] travel retirement were for demographics their that the travel, travel, years this with has particularly that and I year. right, people international. revenge the in I long-haul and to is they think, at accommodate weren't to the ability is to we When go, all Well, to years, X them able involved want years, last look

I for of think that next that we continued years, still a combination the we material. several

[ we've done think I move we're once us ] we our the travel domestically, that gives kind the to as and in early opportunity forward. in new was equilibrium, of process, and optimize

Unknown Analyst

more we more that they're a for else? As or the unique transatlantic looking or something in destinations, transatlantic at are it is more traditional -- unique

Glen W. Hauenstein

are Greece Spain, traditional -- hotspot. more [ ] Spain Italy, of tourist hotspot Italy, it's Italy, portal the are think as I two those a Spain, those the are the X of

in the that and during us allow the SAS along think Europe in with about have peak I we more bringing even than Stockholm and really today. will serve having of to now us summer, we're Copenhagen excited hubs destinations prospect

Unknown Analyst

question is next Atlanta from Constitution. Your Yamanouchi Kelly Journal coming from

Unknown Analyst

opportunity of level? was or efficient having get driving operations pre-pandemic the potentially that operations essentially employees growing level number you the means and staffing same XX% I cutting the than of today employees to and same if wondering Ed, the with mentioned more

Ed Bastian

that because added no, Kelly, just garner employees experience being staffing a about no plans cut the is over our to we've at people all. to of last efficient lot people. new more there's levels and make able to more to This be and we continuing reductions few staffing in years a to any no But the in adding are XX% productivity that intention have levels. the no, bit

Unknown Analyst

CNBC. from Joseph question is next coming Your from Leslie

Unknown Analyst

had this Wondering think were done bookings in you to you of United the busy. and so to that terms going to be increased offer you Alaska Glenn. seeing to currently. ground and seats market the a enough since then separately, SkyMiles program any for sort And year more maybe to if is with MAX if have take is you do last you're this [ question has premium the of But the ]X and since had year combat lounges crowding measures

Jamie Baker

is industry-leading most that experiences. could our you the take as we changes programs to take the right those changes category announced be kinds fall, that done I while were put in them we people And to so question, estimated -- think premium they first of serious what until I'll deliver second Well, into in don't were And should major of some the we've that effect XXXX. the our know, to that made programs. designed really right is with we should

changing. the programs will changes much moving be forward think I course, more minimal. Of But those are always

that So end plays out -- 'XX. I the was? think of We'll that's how end and at by this behind us. other see of into year the And your question

Unknown Analyst

bookings. [indiscernible]

Glen W. Hauenstein

entire in specifically a uptick but Seattle our of small Seattle, portion a seen small is system. We've

relevant the it's scheme in of grander in minimal of kind but things, Seattle. it's So

Unknown Analyst

Bloomberg Schlangenstein News. coming from is Your next from question Mary

Unknown Analyst

was question My Yes. asked.

Unknown Analyst

Sider Your next Wall question Street coming from from Alison is Journal.

Unknown Analyst

Delta do same reliability wondering, was in the on? kind And still that advantage is over its think working of that of terms I has you rivals operation? in still you're something just

Ed Bastian

operational is customers this our competing think And Ed. for better. whole. that a the over improved. reliability other even -- great. may industry the carriers people I And as than The I to a And outcome other I against. that's pushes Ali, industry which And increasingly is been in has the X performance great are great the years, the it's that focused we've that have couple us of things some has over it be think think thing past seen for last overall been rather in

ever definitely more competition maintain lead that still reliability sector. its the Delta before, and I yes, focused than premium So expect is to on in

Unknown Analyst

And then head starting shortages. impact the to to you at a if shortage come to of I feel that could ask concerned sort expect or labor this all you of of maintenance about year? something workers. Is Are the

Ed Bastian

that's maybe at experiencing not in. But like some the have still are new where places. around particularly gain isolated we in We very And less people we'd bring need we any additional a continuing labor And brought us, it's the to in more We we are be. for about to shortages, issues small to big it's deal, experience. about shortages, on, area. people that the maintenance

Tim Mapes

we have Thank Ali. X you, please. for Matthew, final time question,

Unknown Analyst

Your Travel question last is from Silk coming Robert from Weekly.

Unknown Analyst

was Glen, the you year. elaborate that, mentioned And main share it? some think, that by there have might if -- come of gained you wondering you you all had on I'm what this could the removing how gained from caused corporate your channel from competitors? GDS it traditional other fares you an

Glen W. Hauenstein

Yes.

to capacity. where the on the customers level yields noncorporate were get our have inventory those were significant. And industry additional And now leisure yields pre-pandemic XXXX issues differential on days, were is of on the the what's in the and those constrained pre-pandemic as we segmentation X we versus the caught back these high-end the aircraft enabled behind I we very to think corporate say more about that corporates seeds up before a of XXXX, closed. different I'd the in of before rebuild. in between And basically pandemic were and

the seats think can didn't And of pre-pandemic. demand. accommodate between X as sector seats the I premium getting in them, you key priorities that we for exciting manage available X all for categories more that but us those so we premium now exist is that's have So competition the

Unknown Analyst

Okay.

based strategy any upon in your shift fares of seeing all leaving your a about what sort So available of GDS. share defect traditional

Glen W. Hauenstein

is Yes. it, it. clearly, we of think we quantify that's strategy part our more customer don't that I'm but sure and friendly,

Tim Mapes

that Matthew, the we'll call. wrap up

you to close up. If want it

Unknown Analyst

conference. today's for concludes participation today. Thank That you your

Delta Air Lines (DAL) 12 Jan 242023 Q4 Earnings call transcript