DAL - Earnings call transcript Q2 2024

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Operator

Good morning, everyone, and welcome to the Delta Air Lines June Quarter 2024 Financial Results Conference Call. My name is Matthew, and I will be your coordinator. [Operator Instructions] As a reminder, today's 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

Matthew. you, Thank and quarter everyone, joining for us Good earnings thanks call. June XXXX our morning, for

questions. Joining we'll Atlanta Janki. costs will our we could materially and Glen Delta's get as update Hauenstein; statements. events. future to After the brief us on our sheet. with cause differ analyst and our performance and take from Bastian; from statements call that you prepared X please We question environment, statements beliefs will a the forward-looking after our our forward-looking All to today represent discussion and And are as yourself the follow-up strategy, ask Q&A, risks balance the you CFO, or provide so overview of revenue expectations questions. Today's that discuss and that Dan move an results the uncertainties Ed to forward-looking media can analyst Glen open about Ed will many remarks, of CEO, an we'll actual President, involve Dan the and to contains possible. limit that

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

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

Ed Bastian

us invested quarterly today. progress $X.XX margin posting dividend. half generated on XX% morning, of you, capital bringing the earnings in cash continue best points thank free this investment-grade pretax our of are everyone. first or our generation, $X results Julie, year. We strong recognized $X.X Well, a a leadership increase Earlier quarterly of above on the billion X.X% per billion quarter, and announced metrics our joining XX% of We and good highest up reported the of a achieved revenue quarterly last X second flow These record you the over top quarter history. sheet our and to XXX. of being We XX%, free earnings our operating during Delta's to appreciate the cash we cost in share towards some June billion. With results, companies. increasingly return S&P balance to alongside our we world's capital $X.X cash and is half delivered back morning,

payout for of Airline our reliable are Fortune of operational best and truly XXX,XXX Just last was month, team skill fourth extraordinary care year, and across just month culture, Year World to Return in I and The have as top-ranked to American on-time eligible North customers wide Delta first in of Air was business. Recognizing most Delta IATA the NVIDIA accrued Microsoft. Through I'd This all carrier airline. recently year U.S. profit half people, our the thank arrivals. And in is our the the metrics our and a behind as long-standing performance profit with forefront am Power's exceptional of recent Fortune the J.D. on sharing sixth Airline million margin. each we by will month in employees, on of ranked by taking the $XXX on out, the June continue for pay named Delta performance and industry sharing total Sharing Study. the than through key members year. in of industry-leading success departures, the to X% we every Satisfaction with Delta lead the our cabins row, raise a and and February delivered Meeting. the the the our premium have core ranked our at rewards more work provided across airline completion like in the Annual Delta in best all the for next a XXX first care U.S., and was the leading at and XXXX their confident Guy are We builds people by Global the day. Transport also our position They to the our Leadership IndiGo, teams our factor, including Points employees. all named on

To service and the investments that enables we foundation network comprehensive fast Delta in are most industry, WiFi that free excellence, making including to travel further people generational deliver customers. airport make more expanded are our experiences to elevated the and rebuilds, Our lounge the on connected, our high-return offerings, differentiate seamless premium board.

One functionality experience. And customers customers unexpected XX% manage to Delta of years. the credit card deepening weeks Angeles and the Updates few later the record more this usage refresh Clubs features It periods added Seattle program a our also year, Lounge app a Delta have SkyMiles its from Delta our when Premium customers of flights number to Los of flight, the We JFK, Boston the fall. recently opened travel in recent world-class joining Express kind. X wallet. dining of Sky for we our transcontinental save the American existing And a of disruption visited their spa first full happens. app loyalty their the LaGuardia expand cabin, we in SkyMiles most enhancing and and Since ago, the in open a board, beyond with new Select self-service in we'll with Fly and customers during popular new in offers amenities our this Miami One about On this year. We're select treatments. more early fine Lounges and service even engagement the our launch, to time clubs. next last variety up Delta carrying active released to have comprehensive X members and the Delta of Delta in the upgraded expansion are improving points, and with Just app we'll of and customer product

premium to are positioning achieve New card us mix, the well long-term skewing billion. more to overall goal portfolio acquisitions younger, $XX to remuneration continues and of a our shift

week, The tremendous this travel for Arabia across opportunity Riyadh exclusive rapidly year. a begin leisure for amid Arabia, Arabia North popular Saudi excited this will the for a global that of to Saudi the comes Air, into transforming that Saudi and partnership just partnership connectivity service new in and of agreement travel airline we investments America, announce Air will Arabia in premium will Saudi with large-scale beyond. the for Finally, Riyadh carrier next options international are destination an premier growth. are be region and both Kingdom airlines the with and business Kingdom expand

for travel travel has demand Delta's Delta's has with trusted been the journey summer our build record through main travel financial months, industry ribbon remains to All impacting never of yield continued our our levels, from the the long-term while brand And industry in elevate X% greater. seat performance volumes air strong the travel leadership growth up on increase year's accelerated TSA domestic last investments durability. cabin. strengthen and experience across and

choice is the with As Delta a dynamic. insulated base, revenue this from most the diversified carrier of

returns to encouraged of by has the industry's representing we performance. growth industry of appears there focus strong and half generate margins the capacity. That financial actions are the first this year taken. despite decelerating in to the market's said, Delta profitability XX% be improving in the XX% double-digit of delivering are environment, and the We Seat with expected only increased is on

half the more While back industry an our see of the returns XXXX. into even are strong, backdrop constructive I'm confident through that year and we'll

summer core Delta's focus is strategy outlook. priority network. align across to healthy Delta's our premium are Turning travel in a day. revenue Travel highest record secular to Delta's to our shift global remains top Air and The spend customers prioritize marking experiences Sunday a this position. levels, past consumer with and demand at in purchase perfectly ever

full second remain continued the on a we strong and double-digit quarter, strength, third the of ever into more anniversary half, we approach we confident in a outlook. XXXX, of stronger quarter in is closing, year and in our good free $X performance year details profit expect of operating margin, For pretax share, will a billion. visibility to Glen $X first for approximately and billion to provide earnings before. $X September X.Xx. In cash $X.X flow than position our XXXth Delta $X as leverage With and guidance our of Dan per half demand billion,

is our returns-focused deliver on exceptionally about to free performance well industry-leading performance. look hand long-term our prioritization this and sharing Delta financial that, to Our reflects and Glen Investor with November. and forward the of differentiated upcoming Thank strategy. again, me you at in York Delta's over brand goals clear it positioned Day And our value. more reduction, our for debt and to cash We details let more shareholder New significant flow strength with strategic of commercial

Glen W. Hauenstein

August I employees compared for below June X by This revenue summer first, last fall, billion. normal and want start Thank difference. scheduled expected dynamics: demand will point thanking work significantly down Total are hard seat summer. quarter through you, the and Revenue Ed, to good trends and the to X.X% record accelerated Main our improve Delta unit $XX.X for months Cabin into to increased unit trends low dedication. to seat our growth beyond the has June beyond. the the and growth in the revenue decelerating They a year-over-year growth. was to their X.X% unit July morning. into guidance industry be domestic With with year, revenue due impacted

seeing continued to to And was of differentiate high operation and revenue consistent to event, Outside with impact XX% Premium to with revenue as over Europe June Second, about Olympics growth. up prior this summer ran are August. for completion factor. Premium our Ed a great we and noted, year travel expectations. strong a on is outperform million demand a positive our results. unit the travel lastly, with we from $XXX Paris temporary

to our Delta's runway portfolio financial passenger previous over June prior revenue months, and our outperformed industry. expected last to over member X% industry-leading We improving further X% year, expand. credit SkyMiles Express aircraft, led are billion, we're trends higher growth record are and and last quarter. international loyalty improvement by year's from Diverse of XX% X% we significant valuable XX underpinning revenue encouraged premium margins, a was up generated American adding our co-brand Spend X% continue revenue. seeing. is These the increasing up segmenting revenue to also grew retailing $X.X for revenue XX% by than financial we passenger has in revenue was Loyalty the the seats remuneration in revenue continuing growth performance card durability. more total as products. higher the and our streams Domestic capabilities quarter ahead continues and year, outpacing have our with the was our up base continue as the year-over-year. Cargo premium card streams

the As growth double-digit benefited high-value business broad carrier in sectors. choice, with volume across all growth and Delta from of segment demand this

on Delta forward, for remains Looking robust. demand travel

Our healthy core demand customer base premium outperform is continues products the to Main Cabin. for and

in We leisure to companies growth they survey to changes, travel continue, expect point-of-sale strong or our travel extension year. International in in to is travel and shifts, of half recent continues demographic with maintain the increase corporate of the of volumes and the benefit XX% from season. business the U.S. intend demand an back strong saying

full half normal retiring capacity the As year. core approach to international Delta's and our a restoration more into of and aircraft, return second the we decelerates hubs growth of cadence network

and capacity growth in revenue revenue expect Total the In unit revenue expect growth quarter, X% to each of positive to For X% sequentially month growth month. of improve expected we of X%. unit an X% we to domestic, inflection the is to September. September

trends through improve revenue expect in And fall. the progressively We also the revenue unit back of to expect the we unit improve Latin half into to America, transatlantic trends year.

and Pacific, meaningfully pandemic are with multiyear our pre to from the sustaining Air. and higher are driving restore the profitability. to partnership we sustainable our with than at pleased the in early to new our continuing success Pacific a level of Korean service restructuring results network Taipei our Lastly, due are very margins

to expect cost excess capital. premium, we a of For double-digit margins unit and our revenue the year, in returns well sustained deliver full of

closing, Our of I industry works ability outstanding outstanding while equilibrium Delta to first to to reflects for deliver Delta's congratulate an reestablish half these the growing and leadership. In XXXX. results want team the differentiation

the our And the to I'll to financials. come. positioned well to momentum second about and to continue for turn half through over are with that, Dan it years talk We

Daniel Janki

Thank to you, everyone. morning Glen, and good

on were with income June more prices operation the brand-perfect than of share better XXXX For guidance pretax more XX% completion delivered delivered Earnings of primarily fuel cost completion CASM XX year-over-year, the competitive factor, X.X% that point A and in June despite quarter, structure, days. line of in up Nonfuel operating line than the including factor. a $X system a on billion quarter, we and was guidance, in we $X.XX margin. foundation XX% with is a great our stronger XX.X% X was per than higher. cancel-free

including For of supported cash debt quarter. days, the running $XX of $X.X brand-perfect both benefit strong great over after in a announced at the $X.X billion $X.X million we and into flow balance refinery This in outlook. with full annualized repay back our investment We has operation. Fitch quarterly of ended year a debt more quarter was efficiency repayments. $XXX the XX% with on first $X.XX cash BB+ generated the half, a agencies than half, a With Fuel of business, first is returning million. XX $X.XX from combined. Fuel renewal at year-to-date, cash the profit and sheet on further yield Delta track with Gross S&P remain investment-grade half prices reinvesting just a flow and benefiting this our Moody's billion and last grade. Delta of our focus S&P X.X% Strong to all $X early the puts leverage billion Operating than $X.X dividend repayment of better fleet X.Xx. delivered year billion. increase the line and for we strengthening currently are our per rated has to the in at year, free and a generation through of billion, with gallon flow XXX. averaged committed included to cash at This was X%, from last positive continued all dividend. first results

unit our $X.XX be share. be profits refinery. growth, Fuel $XX to to of guidance. the making higher great outlook XX% including Nonfuel X% expected are last lower to an normalized margin be costs X% X% prices to and to and year with expect delivering top an a third normalized, year. Refinery operation, from are last earnings expected to to $X.XX we in XX% to than growth. the per quarter capacity With on are made investment progress to line $X.XX growth X% resources. On expected prior maintenance we into first and contribution of Now with growing fleet the gallon, to in are margins since paying in have over in approximately summer driving last of $X.XX moving million per our are with the cancellations off, Combined September efficiency quarter half the maintenance, XX% health we operating down for $X years. compared consistency

basis. Total and airframe The as expense in manage XXXX expect checks half up the the was and continue investments increase be second volume as on digits capacity maintenance decelerates. to are to unit increase engine of and to expected we nonfuel in full million expected second expense low through similar progress costs fund we the the single of to We year this over people half year-over-year a of heavy $XXX in constraints. and year, supply first continue elevated our industry-wide half be with growth maintenance to brand in majority

For XX our growth aircraft fleet be expected deliveries X%, retirements. the XX than year, and is approximately including less to

back I'll shareholder a industry-leading be pay improve to flow continued deliveries. Delta for full the other for well remark. employees. free sheet returns billion and the billion to Delta for customers we $X expected with balance our is our above $X beyond year of to on day. thank per generation, expected focus and In closing, drive of billion. With Ed and asset hard to base go $X of unencumbered turn each to outlook positioned grow investment-grade result sustained that, is with to to people our deliver $X CapEx flow of it continuing metrics cash $XX is and share value. our confident cash a billion full direct $X continue in And to to cash year-end margin as by remain and I We Delta's performance new our earnings every to a to want of Our final for year work to

Ed Bastian

we an May the the and Helane Becker be on analyst years. to amount you'll congratulate Thank you. advisory covering begin in I we please and you've all you, while work I And personally through for as best. this accomplished begin very be the before the recognize want miss the role, And will industry continuing decades. good great Helane, Q&A, for all Dan. to Operator, wish golf the an you a know that career a of Q&A. working done respect X and gods with for you have I you

Operator

[Operator Instructions] question Your first Cunningham from Conor Melius Research. from coming is

Conor Cunningham

the luck on golf game. Good Helane. Congrats,

on domestic just the In gap for booked pretty you're September you terms of for minimally there? the U.S. is the comment market, can My help September. that guess bridge

right is better? an the industry Just discounting given a that's wrap it now, happening just to supply around. getting head hard little my it's So just

So any helpful. be thoughts just would there

Glen W. Hauenstein

are have I going Conor. a September X/X base. And booked. so base substantially probably hand, wouldn't the Sure, good minus minimally is we and we into better August bookings We have domestically we base say at had the July than about on we of XX have days.

season And up capacity and continuing base. course, September. the better where from more to tends to then, tick August business core economics a of much into back business a down see come we going to So of the industry's normalized

core of August, business. being So and ever business, for peak I think when you been July one think that's strengths not about our

be business in So demand, into uplift. move back given trends think as seen we the season, will that we've we another business the

about only improving is domestic substantially is and not numbers So really also September that our dramatically. improving really but confident international confident

Conor Cunningham

actually we've issue bigger margins you to us with you that forward? can Because just the the industry of is grappling picture, couple to maybe market kind idea state that been that of that just the of the and years. to will overall continues the industry confident same the the you then old of is this pushback And time. from are that industry over need get how structure there the current time of changes I outside structural just the get just going like give is -- change we be oversupply United. But next Helpful.

on the thoughts any just So industry there. bigger picture

Glen W. Hauenstein

I'll question. do think, the then challenging let is industry Well, it an always react this marketplace. I quickly listen, capacity industry how broader doing oversupply. On and be for I've this on Ed the never seen the capacity and for XX in I've been capacity, itself so the take can comment an that's years much to And

where been really we've here, already of in years it couple than months time. ago prolonged only would the I and different has reacted. stay was a situation And that's So it for an very of periods for think industry oversupply

the about really And is turn Ed. for back to So it at I'm excited how behaving the point. I'll broader industry question, this

Ed Bastian

To to Yes, the point, to or of work. physics, say, is economics have whatever going want to Conor. Glen's you law

last cannot, if the You you're health losses, these particularly demand set all food the end post seen industry's chain, over on given couple the of the we've years. to lower of of continue

of I -- available, be more broadly the form lever what that you know starting there and well. The pretty will industry good levers don't take, you, I to but see, in you capacity guarantee have is first is available health already thing as So will the shape. usually that you're but

the go and lower need need to revenues was changed. changed many an driven revenue years lowest recognize of be Value the is where as this third that's dramatically. real customers. Couple are the differentiate terms value that than across it's continue better rewarding convinced struggling. fare going constraints the demand run what that industry of product as those or industry -- supply, engine business the to going we that cost is look offering having we've experience an environment, the market. a infrastructure, That's and in set you we're said. turning higher will seen, needing those that don't quarter. I'm high continue models and this and our industry to in to the labor, OEM, for "disappointment" industry value see see that if money that be that's reliability. to capital to economy the quarter higher defined the have. is set I provide is will in value, are in whether of this not for with meaning just The record the whether that to better opportunity a be is its That's given still even quality the return seeing But we're seen we've at entry, to The we to Now better they be into is it's with all not to of that the continue hold, I providing taken half going to ever cost it we experience,

book. be realize to going much lot others better, I There's as XX% overall to at a I'm is here industry Delta. Delta do profitability beneficiary. of work own. And our my a talking need on And only that I the we're driving things can get so that of Listen, more So other own only lift. we appreciate there's

Operator

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

Savanthi Syth

Boeing in was I on weeks update wonder XXXX if supply evolve Airbus you're from of terms in the operation you the in talk are chain of but you're kind ago just challenges planning kind thinking think things growth. but about early of for issues. the I Just thoughts a terms well the through also managing could understood any how managing surprising. of how And few

Ed Bastian

the but obviously the challenges, of us going the that anticipated Delta, experienced. long close largely of terms insulated I months, meaning the Savi, problems of take have, we'll for In some like pretty And do that. Boeing, to fine. just certain that of we're We're anticipate good having one we we be may is any that. coming, delays as Airbus' Boeing notice challenges Yes, where Ed. slip and this again, from to we customers, don't as And largest take slip deploy. weeks you're year. has as is and talking to best Airbus, somewhat have like we'd schedule as nowhere years to delivery continues delivery in delivery the I'll to have, capacity for with aircraft the in need delay. going are that not about XXXX,

Savanthi Syth

And on I'm operational maybe improvements expecting either, then standpoint, having not buffers just guessing will an any continue? extra just

Ed Bastian

things already will us, in release large Well, and fleet our engine we to maintenance the capabilities maintenance as fleet, available deliver, all and parts And will and get indicated we GTF become the more have retirement which else more our they new to to older on well the continue be team. supply from our stabilizing, opportunities maintenance think better. than for the continue a which parts back new improve. these lead of stabilize the the front aircraft as and availability that anything The but create to we're us challenge as continue the starting as to to to face we there I to even be to are as platforms more for trend out do resume tend part

Savanthi Syth

with I you're where are That's LATAM about long-haul as improvement pressure. revenue side, Glen, helpful. the kind kind still might, curious on short-haul expecting what And ask despite was on unit largely even flattish the I you And if encouraged the from of growth? seeing there. mentioned Is the that still about of you go through? coming you

Glen W. Hauenstein

that inflected is not and going in levels pretty remaining much versus has the to capacity positive portfolio. reduction south short-haul here, of But excited and quarter the in leisure this And terms disciplined to be throughout long-haul play, last lapping the is more in capacity it's Actually, the it solidly in industry results. looks we're about that so yes, winter. positive those winter still third

that at we're and moving So of looking forward momentum really that continuing. positive

Operator

is Your next question JPMorgan. from Jamie Baker from coming

Jamie Baker

curious been few in a unbundling and on about because unbundling should in want But possibly has to others. all for for X part X cabin front segmenting Delta I've a cons asking the that So how what and terms about careful of be I'm about think been pricing cabin path? Or Glen, pros of I we there's and the such cabin? about rear down the price are that. this to is is D One thinking future a the success continue concept going

Glen W. Hauenstein

have going to to think you're hear I talked that. Investor Day We've conceptually about about to more that. come to

think more get, I we'll not we're details talk be plans those you to but forward. we ready moving the of giving details about as

the Investor be year exciting. very should Day think I this

Jamie Baker

of premium, an change then premium into seat. middle There's and into work option to under I'm airlines lean charges, at it those of punitive will Ed are ancillary my that fees Glen, beginning are disappearing. it for I some for confident And sort too is empty level, that currently maybe of schedule. an strong a term, maybe seems but of high the or duress but a more are

we're from, I'm is from if road Delta entirely the isolated Delta. is if pseudo-premium thinking But is spoils that to could sort they're product. I'm is wisdom belong we not conventional find Southwest just just what team that let's The this has thoughts isn't Delta and low-end overcapacity. something overcapacity. some to there? looking at premium seeing the Any today of call said their as curious enhancement down isolated about. think it, you

Ed Bastian

-- and and would them. is based on those we better of have and also premium if last blame it's get XX specialized focused a over overall what Well, airlines the seats in something some And all Jamie, than right? look we just Premium me, the hear lower-fare as reliability at. and that of done can't we some on then more continue first room seats. And considering, service, I all to of or the putting discount years those overall airline, a more better. -- good yes, about experience, well. But foundation was excuse are of you it's question. think the experiments I certainly is consider airlines I that's and and more foremost, It's that the we

in In to year maybe as fact, true run superficial every measure, you industry opportunities my what have That's American in across provider Express, their Delta. choose are partner. somewhat compared best to in then month card experience exclusive best the chooses we month in Delta we've the to out. premium every why the this That month, why world, deliver actually we That's that as business gives operations that, the top more travelers do. and credit the freedom experience. And me, internationally is That's why the we're opinion, at.

-- more. industry better would And And has for only they a for I to costs find which way the up room to I better facing. but So to ways the there's needs serve you discounters. Remember, that everybody can cost is providing the especially continue the cover experience. that higher gone the for to think are manage in

Jamie Baker

very Investor at great, you much that Take for Day. That's you Ed. Thank See response. care.

Operator

Your next is coming TD. Fitzgerald from Tom question from

Thomas Fitzgerald

among notable So Select, outlook little unpacking half, sticking factors, class buckets in the paid the you domestic second with first like some DX, call bit, a half the just cabin would load you'd first the Premium and for Comfort+, out? else trends booking, anything the different premium mind in just of and

Glen W. Hauenstein

That's a lot.

And what more the about coach that is internal Select. this XXs are. expectations first factors and excited we has fares mid- Xx what Premium fare the load are this year than that think very in ubiquity I program structures our Delta have high in we're with to year is that exceeded

of great this out JFK-LA great full And domestic So domestic leading and margins continuing suite DX, pack this it really all the industry. We're selling industry. who having accretive. for of fall in excited think, JFK-LA first DPS to country really our those advances in very the with now September, of rolling in start you market The a that follow in TransCon we October, products the there, we're will very and be out largest there. marketplace, already margins is in look revenue strong

that best the sequence margins. lowest the Main I be elevation, products So continuing the the continue continuing Cabin really the margins think having have coach margins highest with in to to and

Thomas Fitzgerald

a topic how a thinking for I XXXX should XXXX helpful. about and [ just deleveraging I we That's PSP in I context to the plus X the the of, think, then of And rate? variable broader just it's industry, and quickly, you loans Dan. in story. ] the SOFR whole resetting think and really team just the think for X and is How may, are this if but

Daniel Janki

Yes.

of As continue focus of deleveraging. we October a debt. lot billion of you to [ We've made on know, progress 'XX ], since $XX

continue as at end put long at and the first next that due. part to rates would and have And those of our the that at versus more we'll It's in Investor be makes come forefront. more think market types next detail doesn't we talk other year. we at tranche that of to quarter beginning And probably XXXX. We'll we especially of to out. short-term year in but of get sense of So about the be about term things time, Day, those rates that closer, April point first on debt long-term second year. it are and where part capital look quarter tranches, refi will structure, whether When another second of get you of one quarter conditions particular the the we then deleveraging will and as in be in

Operator

coming is Your Deutsche next from Mike question from Bank. Linenberg

Michael Linenberg

that's your helpful think we think your Dan America to think how the to improve out year-end. over always about where bigger much swings next I for in hit is and is some it year be mitigate sort and you the you've up more extension a your also think at about this bit who it year. of the call to have question and we still carriers, weeks, mean, about guys I going for traffic we're transatlantic half think we way. some How going it's measures bit deep a the done as that of have And of should I the like of much But into liability? network. When and to few talk the a to where combined Glen, a get South that? I think liability cash. traffic how should of going a in team. some a back how point that's I be you with at a other used guys, And the those air guess to a about, be past, maybe of Northern like wake-up since it's in I maybe follow-up. year I even you're part in to It's when route to back you the of least to I the corporate. air it's pronounced the sort seasonal more call maybe think that of and Hemisphere And the type shift very the for going seeing strength

Daniel Janki

it Through is half, the first up.

million can up for a hundred third billion. $X.X dollars where few supports up it's our quarter. You revenue last it forecast over year, that see It's

elongation corporate get fourth As helps more also relates say balance consumer, you continues year, as to curve that year-over-year, of of it third into outgrow bringing you cut. the look season normalized to the is the at also quarter. travel it the still historical go got that fact the into perspective. When relates you into through it you and is as certainly, year, multiple back last to half of I'd And that back a it of had what the you years oddity as quarter

as that and we the it 'XX a much to year better create go through start it. for about think this So it's 'XX and evaluate as is cleaner first you base and

Michael Linenberg

Great. And second then my just question.

see other of Glen, or that the we'll about first capacity you cuts Ed from levers think one I talked carriers. being

in about the things sort some As real for where bigger particular, are of of think maybe back estate. is your we certain some airports? that? opportunity potentially cutbacks pick maybe in of space to up they in there you Any additional I of tight, additional thoughts Atlanta, get airports coming opportunities on Orlando, think and where you'll cut gate back an

Ed Bastian

all can Listen, is communities. I Mike. Thanks, say always serving on interested in that we're underserved

Operator

question Group Research. Scott Wolfe coming from from Your is next

Scott Group

I bit up X% third So help we've about color, type right? the capacity you in anticipate of Or industry lot do want above can overall in GDP? and outlook, to any your saying capacity the try I was a you're color So but to little a quarter, Delta guess, capacity just X% X% get talked in quarter. balance? plan second plans you growth? or just as to stay share more you capacity specifically, entering your getting you GDP you think get you sub-GDP think for do industry XXXX supply-demand Delta Do on the a the to

Glen W. Hauenstein

growth don't that would to capacity is I that out difference and is at of ought X really think I I many got you a year. going seats work we're between We've think point. not just that important grew on you're note I for this models it when ASMs. an the X% only looking most on think count And entity, growth, seats. we seat ASMs, capacity think when you of to runway thing give lot we And important point left less. we seats. And although sell that about in XXXX it's this really the would your work ASMs. at within because seats Others X%, is or about was our we sell our

saw we the restructure plan we there's some year. stage-length as actually our the than some people length a opportunities longer because stage in longer-haul And is the difference. of bit had flying on through a So little

about ASMs. not I'd talk it So to, call back let's

Let's within theater. seats talk about

representation better ought industry figure trying think that's in and on as is I industry we out going. we is facing key and a So all one of what the where to to move the forward much

year, clearly half to to that. capacity. think try for reveal But of be too trying what we'll sell. So That as over domestically will the seats back early we're is our 'XX about measure in the more secondly, about terms of

Daniel Janki

our thing And I'd point, growth is time to that, have add on to domestic first XXXX. point a hubs. on the we And seat that this and from capacity were to they our Glen's fourth that perspective of Glen, restored half as is the versus important going into get core core XX% year into that of back quarter levels hubs we'll is the seats,

Glen W. Hauenstein

versus yes. terms least we Still restored 'XX, the in are of seats,

Scott Group

the then fourth the Dan, QX just a quarter, I full it usually absolute think right, pretty just dynamic quarter different? the if pretty guide -- Any the see want And earnings, midpoint the year Okay. color basically similar this of about with year and take guide, just -- guide, I I to we third atypical, earnings, and be of implies down. then when right? to usually on that step It's about the think might how midpoint that's

Daniel Janki

Yes. last down were only the quarter quarter we year Well, fourth year-over-year. was

about plays lower get so year also that quarter the much very current to You -- $X. in positive season you but fourth think that strong I exit components that And we'll as the regards to had also talked forward you benefit. that last that the The travel demand. and high and moving it's revenue fuel where out, elongated inflection Glen's have at in the September with current unit is is see international the of

Operator

Sheila from from Jefferies. coming is question next Your Kahyaoglu

Sheila Kahyaoglu

the just Does Does bit get your And X worse if it get guide think it the last more gets issues? wide. or capacity get better? how Boeing Maybe does delivery a 'XX rational and together, taking it you about questions is in cadence the it industry putting QX do back?

Ed Bastian

guide. given Sheila, this haven't I QX we is to clear, Ed. explicit be want just

full as still range in So we guide have wide -- there. year appreciate pretty driving noted I you with our models a your

we promising, our and to this gods upped You were things when guide full got may few fuel as later time, at really worked year months recall a the last we year us. look starting against punished

a is. what So to good range. I trying we're get don't the confident figure we'll within point want year But out to full end in up really into QX

Sheila Kahyaoglu

Can think delivery improving the how you cadence how industry? that maybe you next about year comment and on impacts Boeing's

Ed Bastian

in I we're as Airbus stream. our Well, mentioned, confident delivery

coming I no over next We years, anticipate. handful aircraft Boeing the of have

they're we'll to time slowly will Boeing and before gets improve their I it I starting cadence take back. see. think know some

Operator

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

Duane Pfennigwerth

from industries? entertainment of year September Can you follow-up travel remind Just the fourth quarter the what corporate strikes on into us headwind beyond. a last and in auto was the and in

Glen W. Hauenstein

we auto October at if this and we -- yes, recall, peak. year, really So right about time frame into were the last in in in time were the heading the you its writers' strike

So or this that the into tailwind think a was believe, $XXX in come a a we fourth quarter. of that's terms million for year about we as -- I us headwind

Duane Pfennigwerth

about you you. Olympics? outlook Can talk XQ to with in commentary Any a ex to transatlantic overall point you could the just little and post for maybe stick maybe And Paris? Glen, overall, your bit bookings

Glen W. Hauenstein

Paris, Yes. Well, ex positive. we were

my because I lost a than thought. little -- who And you Paris bigger so my follow for of bet bet those with was and bit we

actually... So

Duane Pfennigwerth

but of the I it you want glad you I'm brought call it up. to remind on didn't

Glen W. Hauenstein

was miss for good me, though. expensive care so That for fund an the employee

because guide. that's positive for And didn't, yet very as we say early that look disappointed well not I at the official fall inflect it's if be robust have transatlantic. very so inflected to a And see Olympics, opinion, it personal but to demand positive. it we we're but an past too could we a would -- to

Operator

Your Barclays. question is coming from from Oglenski Brandon next

Brandon Oglenski

help Glen, question, are pulling capacity down behind a your or seats what drive discussion, Scott's I maybe But the Ed control, levers I as quarter. capacity at know you if aren't things the to fourth margins can first talked the about yet. target are especially here into industry lot beyond come back guys you thinking about you can to coming improvement? your own in other scenes Ed,

Ed Bastian

and customer that continues look largely we're there. robust investing coming deal Well, a see set We've in, quite base -- transatlantic fully available summer, the healthy, new us. to for offerings Clearly, the end continue space. of is by the to and to the fast the which pretty we our set a a in going premium in available big going there's fully as free got WiFi bit. be of specific I demand on is think and

down. On back side, saw quarter guide's a in we're hard in to had performance work going year. that. going that third cost the what to we that continue anticipate realize but the to we're than half the to I good first cost touch larger we get hold QX, of I really the

We're I on growth get think still the yet. our have We there not year talked the we've more to grow this continue opportunities cost larger opportunity to about all there. front headcount. to into

But the hope have If across that the to be delivering we fix tailwind back to the sitting be are. itself. level we we So industry of case, And waiting we I board, we think another for that, Delta. going was the Brandon, outstanding wouldn't profitability for not that opportunities. certainly are that's

Brandon Oglenski

follow-up, a next headcount I talk into as restore you appreciate your core you're seeing year trends and maybe, hubs? that about And Dan, response. efficiencies you if can as

Daniel Janki

we're Yes, just mid-single -- network And this just resources will our that I while we think digits. -- versus up And -- at will that XX grow grow versus headcount that even on months, and and under demonstrated. that's been our trailing think are. resources X% case only the growth we're I the have the will alone, we X% And growing year delivered. we've

the and us, that expensive those first made. open the think utilization aircraft the of always reminds It's the first is the us the we the and the I into back edge the Glen of capabilities. And resources kind most leading of it. of me, not step is So It's few investment aircraft. people, growing right? that you day into day that here, airports it's and those growing just steps here

So board. it's across the

Ed Bastian

and I'm thing, least cash Don't as expect we'll we'll Ed at I of again off. gave again. billion. lose good free next which going year Delta within the sheet compounded is once differentiate this balance the The that delever the year, other This we the year. again. to all start effect of and of to guide X $X this Brandon, throw off throwing cash that $X is sight billion confident at we're in between And continue industry.

Operator

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

Ravi Shanker

the -- on commentary. One up to I international just is of a want here. couple follow-ups follow

spillover, You kind other the particular said geographies? you If pocket seeing of times through acceleration of you an like that Are unpack would international that, to Olympics for spreading air great. periods? there couple just is can a that the from the Is looking fall. be strong in any guys pretty

Glen W. Hauenstein

and or group without it's I who not not extending have whole think a don't the we double whether see children, season the whether as generally, with of people incomes people, or retirees, it's July packed. so to and it concerns. October everything hot the in better is go It's Europe is September than August when in so and and time actually weather potentially school is a to

demand and seeing across and the into really through September European that remaining into So strong. extension we are really November is an board October

us. The point-of-sale happening enough, Japan market at the yen Interestingly leisure the into same a is leisure So Pacific. turned very for exciting XXX. has hitting thing in JPY U.S. that's the in markets with

numbers again, a is which strong we really U.S. record season. destination. And very such of great fall heading a So has to Japan, that tourists have

So through really extending looking the and November. at U.S. into origin, October leisure season high-end

Ravi Shanker

concern Kind saying of the Understood. push kind the discussion premiumization guys comments. That's more kind wanted And of kind on that your on up do of going follow-up And sense go? that the of of previous others to premium, as opportunity premiumize, be industry. competition I set you clarify that you of the more a maybe carriers demand. you for as a push high you to a just there's can of see up? mean, have lower-cost color. Are towards playing there's fixed premium bottom how great for comes of some as Or out? I there's you also to the How kind do

Ed Bastian

Well, I think it's both.

see opportunities to we grow growing to that we have, for and digit continue premium. Premium's We double don't and slowing down. have us

will there. going it's will our as So Delta, And to their help their points, continue products, revenues if own its force grow upgrade as Cabin happen continues do them to to others, what upgrade well. to Main they choose is, to which also right, price on

Glen W. Hauenstein

have you when replace I is away think, That take reinforce with revenue to point, to them the streams, continue should streams. other was you we revenue

their so constant to they terms fares have is the for think I of to that is that's point product And more a ULCCs value, as here revenue. look the industry. And missed just in make their remain good base increase to maybe actually

Julie Stewart

the to Q&A. go now We'll final analyst

Operator

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

Andrew Didora

growth on retirements you think where expected us commentary maybe growth seat over capacity helpful Dan, fleet of the you kind give And X% the aren't or deliveries but this to months? the on know you XX can and I XXXX growth based XXXX prepared now, help next the fleet year. about see

Daniel Janki

Yes.

that and to On X regards you We're think final to look to through and that years mentioned, the we benefits that, but average, retirements, and forward out. right, that going I years. mid-XXs a operation, our then year, you that X right at use is in XX maintenance XXXX. so as probably you're they've to and X we material I ops improve you older into then with our good last operations tech through that how the look tweak XX. material we're And been fleets, back it because the what when a see give it haven't or we're time right, as to meaningfully into plan in steady retiring X or associated about to XXs it's and of as is the We'll to. as take, that to grow, starting we've used those year, all some the aircraft actually next XXXs. And This been XX continue as the falls XXs, we're been as first -- talked about, we've which trying able see that -- we over last is, around us, get can taking decade. through XX to finalize when stream efficiency, the go drumbeat what this range it's it retire of the at deliveries

Andrew Didora

know of helpful. of can just comfortable I Got with. there my a you debt still that how more much as it. you of us follow-up, comfortable than Ed, last like the call place? debt about to proper just mentioned give level think And That's a have outline more you gets terms very in that the you're actually you Is you you feel on any sense framework

Ed Bastian

for that question at think We'll answer a perfect time. Andrew, that's I November. that

Julie Stewart

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

Tim Mapes

you the call the we of members transition if mind, getting just you from the media, into the repeat please Matthew, Thank you, the Julie. queue, for analysts please. as to if could don't instructions

Operator

Josephs from CNBC. Your first Leslie coming [Operator Instructions] question from is

Leslie Josephs

Just of a questions. couple

most SkyMiles profitable cabin? For booking seeing the are the are or for is to that members? the of expect you the entire doing fleet buy do and travelers buy-ups on after? still WiFi, the most fast then you And outset part that have the free or mainline WiFi they when And of economy, at onset their premium

Ed Bastian

take You want one? to the first

Glen W. Hauenstein

question the was Select? on So Delta Premium

Leslie Josephs

Yes.

Glen W. Hauenstein

Select. Premium just economy? Premium We're

not it So multiple they bought, post at And we come as that upgrade forms our booking. for of could initial people purchase. be do being of products, like upgrade could is whose they could But companies to to XX% know, at they that those. you their including designed buy with those, do still, into purchase. payment, And it over mostly flexible that people to miles all use as so might allow them miles initial

Leslie Josephs

it's still most profitable And cabin? the

Glen W. Hauenstein

Delta third Select, Delta in I first profitability, the Delta profitable, think goes Premium It terms profitable. the most is and is Premium Our down, One of it right? then most Select. domestic really

So really margin. premium in terms the of more product, hierarchy, higher the the the the

Leslie Josephs

Premium on One, domestic all Delta and Select class then first Okay. Delta routes?

Ed Bastian

of question, WiFi the is the fully the as and principally months. which XX our at XXX by transatlantic out, end to fleet, roll as moment the getting And our the largely months. running the have up up and progress. focus regionals pretty continuing running And summer fleet to Leslie, our remaining making on focus that remaining the The over couple the well international next of getting is any good domestic is XX it over well are equipped. aircraft, right We'll after the next we

over we're So we're present the there. level, at passenger XX% a on time. Certainly, well count getting

Operator

is next Schlangenstein [Operator Instructions] question News. Mary from from Your Bloomberg coming

Mary Schlangenstein

give leisure? situation Japan business the Or is little bit between well? more the you detail I as that wanted on just you looking that could Is to and your see us like just what U.S. if mentioned. a primarily Japan

Glen W. Hauenstein

strong. business seen of and we've a the a And the is is It what U.S. market. quite new has pandemic. since Japan end Japan destination as really been The

it very that XX, I to be and all afford go able great difficult see yen JPY has think Japan was Japan the the when to offer. was things to to

it's travelers of to seem advantage With different very a they great at the world be taking XXX, U.S. for yen JPY and that.

Mary Schlangenstein

on what side? about business the And

Glen W. Hauenstein

to Business continues strong. remain

Mary Schlangenstein

of you that? and all had sell for Can I give And us partnership the about still you refinery refinery. sort question the a talked you're Okay. the other update haven't to discussions was in an or on develop whether some time any

Daniel Janki

key We're job. not. has running part refinery well. is been A doing very team great The Delta. The of a

Tim Mapes

Thank the Mary. that, right we're Matthew, conclude call. With hour. the at you, We'll

Operator

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

Delta Air Lines (DAL) 11 Jul 242024 Q2 Earnings call transcript