Q3 2023 Delta Air Lines Inc Earnings Call

Okay.

Speaker 1: Good morning everyone and welcome to the Delta Airline September quarter 2023 financial results conference call. My name is Matthew and I.

Good morning, everyone and welcome to the Delta Airlines September quarter, 2023 financial results Conference call.

My name is Matthew and I'll be your coordinator.

Speaker 1: At this time, all participants are on a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's session will begin at 10.

At this time all participants are in a listen only mode until we conduct a question and answer session. Following the presentation.

As a reminder, today's call is being recorded if you have.

Speaker 1: If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time.

Have any questions or comments during the presentation you May press star one on your phone to enter the question queue at any time.

Speaker 1: I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

Thank you Matthew good morning, everyone and thanks for joining us.

Today in Atlanta, we are joined by CEO , Ed Bastian, our President Glen Hauenstein, Brian Our CFO , Dan Janky, Ed will open the call with an overview of Delta's performance and strategy Glenn will provide an update on the revenue environment and Dan will discuss Kaufman our balance sheet. After the prepared remarks, we will take analyst questions and then we'll move to our media questions.

Speaker 2: Today in Atlanta, we are joined by CEO Ed Bastian.

Speaker 2: CFO Dan Janki. Ed will open the call with an overview of Delta's performance and strategy. Glenn will provide an update on the revenue environment and Dan will discuss costs in our balance sheet. After the prepared remarks, we'll take analyst questions and then we'll move to our media questions. Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements are provided by the Department of Transportation and by the Department of Transportation.

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

Some of the factors that may cause such differences are described in delta's SEC filings.

I'll also discuss non-GAAP financial measure and all results exclude special items unless otherwise noted you can find a reconciliation of our non-GAAP measures on the Investor Relations page at IR Delta Dot com and with that I'll turn the call over to Ed.

Thank you Julie and good morning, everyone. We appreciate you joining us.

Speaker 3: Before we start, I want to acknowledge the unfolding war in Israel and the tragic loss of life that has ensued.

Before we start I want to acknowledge the unfolding war in Israel and the tragic loss of life that has ensued.

Speaker 3: Delta is donating $1 million to the American Red Cross for the International Committee of the Red Cross to help fund the pandemic.

Delta is donating $1 million to the American Red Cross for the International Committee of the Red Cross to help.

Fun humanitarian efforts in the conflict.

Speaker 3: This includes emergency assistance such as health services, emergency care, ambulance services.

This includes emergency assistance, such as health services emergency care ambulance services and other critical needs.

Speaker 3: Our inbound and outbound flights to Tel Aviv have been suspended through October 31st to ensure the safety and security of our customers and employees.

Our inbound and outbound place to Tel Aviv have been suspended through October 31 to ensure the safety and security of our customers and employees. We're also offering a customer waiver for travel to Tel Aviv for those who need to change their travel plans. Our hearts are with everyone impacted by these tragic and horrific events.

Speaker 3: We're also offering a customer waiver for travel to Tel Aviv for those who need to change their travel.

Speaker 3: hearts with everyone impacted by these tragic and horrific

Yes.

Speaker 3: Turning to our news for the day, this morning Delta reported September quarter results, posting earnings of $2.03 per share, a 35% increase over...

Turning to our news for their day.

Morning, Delta reported September quarter results posting earnings of $2 <unk> per share to 35% increase over last year.

Speaker 3: revenue grew 13% and we achieved a 13.5% off.

Revenue grew 13% and we achieved a 13, 5% operating margin.

Speaker 3: This resulted in operating income of $2 billion, bringing our operating profit over the last 12 months to over $6 billion.

This resulted in operating income of $2 billion, bringing.

Bringing our operating profit over the last 12 months to over $6 billion.

Speaker 3: We dealt with people delivered for our customers throughout the very busy summer season. And I'm grateful to our teens for all they do for our customers and each other every

The Delta people delivered for our customers throughout the very busy summer season, and I'm grateful to our teams for all they do for our customers and each other every day. Our people are the foundation of Delta and are our most important competitive strength.

Speaker 3: people are the foundation of Delta and are our most important.

Speaker 3: Sharing our financial success with our people is a longstanding pillar of Delta Sculpt.

Sharing our financial success with our people is a longstanding pillar of deltas culture with this quarter's financial performance, we accrued another $420 million towards next february's profit sharing.

Speaker 3: With this quarter's financial performance, we accrued another $420 million towards next February's property.

Speaker 3: Springs are profit sharing accrual to over $1 billion your date, marking and important and exciting milestone for the

This brings our profit sharing accrual to over $1 billion year to date, marking an important and exciting milestone for the delta team.

Speaker 3: The great work of our 100,000 people was recently recognized.

The great work of our 100000 people was recently recognized as Delta ranked number 12 overall on time magazine's list of the world's best companies. We were the only airline to make the top 100 of this prestigious list and.

Speaker 3: have still been closed to my Auril's

Speaker 3: We were the only airline to make the top 100 of this prestigious.

Speaker 3: USA Today readers just selected Delta as the best airline in the world.

And USA today readers just selected Delta as the best airline in the World.

Matthew: Good morning everyone and welcome to the Delta Air Lines September quarter 2023 financial results conference call. My name is Matthew and I'll be your coordinator. At this time all participants are on a listen only mode until we conduct a question and answer session following the presentation.

Our operational fundamentals remains strong underscored by Delta is industry, leading position and on time arrivals and Blue Sky operational performance that is reliably back to pre COVID-19 levels.

Speaker 3: Our operational fundamentals remain strong, underscored by Delta's industry leading position in on-time arrivals and blue sky operational performance that is reliably back to pre-COVID-LELF.

Matthew: As a reminder today's call is being recorded. If you have any questions or comments during the presentation you may press star one on your phone to enter the question queue at any time.

Speaker 3: Following a high number of irregular operations days early in the quarter, driven by weather and ATC constraints, we have seen consistent...

Following a high number of irregular operations days early in the quarter driven by weather and ATC constraints, we have seen consistent improvement in our operating metrics.

Julie Stewart: I would now like to turn the conference over to Julie Stewart, Vice President of Investment Relations. Please go ahead. Thank you Matthew. Good morning everyone and thanks for joining us.

Speaker 3: In October , we are running a near perfect completion factor across the main line system, and we remain number one in on-time arrivals here to...

In October we are running a near perfect completion factor across the mainline system and we remain number one.

On time arrivals year to date.

Julie Stewart: Today in Atlanta we are joined by CEO at Bastian, our President Glenn Hauenstein by NRCFO Dan Janki. Ed will open the call with an overview of Delta's performance and strategy. Glenn will provide an update on the revenue environment and Dan will discuss costs and our balance sheet.

Speaker 3: As we're now in the final phase of our recovery, we are making important forward leaning investments into health and reliability of our fleet.

As we're now in the final phase of our recovery, we are making important forward leaning investments into health and reliability of our fleet is.

Julie Stewart: After the prepared remarks will take animals questions and then we'll move to our media questions. Today's discussion contains four booking statements that refer to Delta's performance or beliefs or expectations about future events. All four booking statements involve risks and uncertainties that could cause the actual results differ materially from the four booking statements. Some of the factors that may cause such differences are described in Delta's SEC filing.

Speaker 3: These maintenance investments will position us to consistently deliver the operational excellence underpin stelt as brand. Running a high quality operation is critical to being the airline of choice for our customers and driving a competitive cost structure.

These maintenance investments will position us to consistently deliver the operational excellence that underpins delta's brand running.

Running a high quality operation is critical to being the airline of choice for our customers.

And driving a competitive cost structure.

Dan will speak more to this shortly.

Speaker 3: During the quarter, we also made a $150 million strategic investment in wheels up, co-investing alongside Sir Tars' management, knighthead capital and others.

During the quarter, we also made a $150 million strategic investment in wheels up co investing alongside surcharge management.

<unk> capital and others.

Julie Stewart: We'll also discuss non-gap financial measures and all results exclude special items. You can find a reconciliation of our non-gap measures on the investor relations page at ir.delta.com.

Speaker 3: This new investment structure combines the number one premium commercial airline with the travel and tours and expertise of Storris and the turnaround expertise of Knight-

This new investment structure combines the number one premium commercial airline with the travel and tourism expertise this tourists and the turnaround expertise of night at.

Ed Bastian: And with that I'll turn the call over to Ed. Thank you Julie and good morning everyone. We appreciate you joining us.

Speaker 3: Delta's relationship with Wheels Up creates a new premium product line for our customers, and I look forward to working with our co-investors and the new management team to unlock the full value of this product.

Deltas relationship with wheels up creates a new premium product line for our customers and I look forward to working with our co investors and the new management team to unlock the full value of this uniquely positioned business.

Ed Bastian: Before we start I want to acknowledge the unfolding war in Israel and the tragic lots of life that has ensued. Delta is donating $1 million to the American Red Cross for the International Committee of the Red Cross to help fund humanitarian efforts in the conflict. This includes emergency assistance such as health services, emergency care, ambulance services and other critical needs. Our inbound and outbound flights to Tel Aviv have been suspended through October 31st to ensure the safety, insecurity of our customers and employees. We're also offering a customer waiver for travel to Tel Aviv for those who need to change their travel plans or hearts with everyone impacted by these tragic and horrific events.

Speaker 3: Turning to our outlook, travel remains the top purchase priority and our core customer base is in a healthy financial position.

Turning to our outlook.

Travel remains a top purchase priority and our core customer base is in a healthy financial position, we continue to see strength in bookings across Delta's global network driven by our consumers.

Speaker 3: We continue to see strength in bookings across Delta School of Mobile Network. Driven.

Speaker 3: a man for premium experiences, international travel, and increasing business travel, further differentiate the trends that Delta is seen within the industry.

Manned for premium experiences international travel and increasing business travel further differentiate the trends that delta is seen within the industry.

Speaker 3: We expect our December quarter revenues to be 10% higher than 2022, with a 10% operating margin and earnings of over $1 per share.

We expect our December quarter revenues to be 10% higher than 2022, with a 10% operating margin and earnings of over $1 per share.

This brings our expectation for full year earnings to over $6 per share on a double digit operating margin and free cash flow of $2 billion.

Speaker 3: brings our expectation for full year earnings to over $6 per share on a double-digit operating margin and free cash flow of $2 billion.

Ed Bastian: Turning to our news for the day, this morning Delta reported 10 recorder results, posting earnings of $2.3 per share, the 35% increase over last year. Revenue grew 13% and we achieved a 13.5% operating margin. This resulted in operating an income of $2 billion, bringing our operating profit over the last 12 months to over $6 billion. The Delta people delivered for our customers throughout the very busy summer season and I'm grateful to our teens for all they do for our customers and each other every day.

Speaker 3: Since raising full-year guidance over the summer, our revenue outlook has improved, though earnings and cash flow have been impacted by higher fuel and maintenance costs.

Since raising full year guidance over the summer our revenue outlook has improved though earnings and cash flow have been impacted by higher fuel and maintenance costs.

Speaker 3: Revenue for the full year is expected to increase 20% over last year, which was the high end of our expectation.

Revenue for the full year is expected to increase 20% over last year, which was the high end of our expectations on steady domestic demand and continued strength in international.

Speaker 3: study domestic demand and continued strength in international. The strong

With strong topline growth and margin expansion, we expected double earnings year over year and deliver a 13% return on invested capital.

Speaker 3: We expected double earnings for you over a year and deliver a 13% return on a

Ed Bastian: Our people are the foundation of Delta and are our most important competitive strength. Sharing our financial success with our people is a long-standing pillar of Delta's culture. With this quarter's financial performance, we accrued another $420 million towards next February's profit sharing. This brings our profit sharing accrual to over $1 billion year date, marking it important and exciting milestone for the... Delta Team. The great work of our 100,000 people was recently recognized, as Delta ranked number 12 overall on time magazine list of the world's best companies.

Speaker 3: Our outlook for 2023 keeps revenue, earnings, cash flow, and debt reduction on track with our three-year plan, which we issued in December of...

Our outlook for 2023 keeps revenue earnings cash flow and debt reduction on track with our three year plan, which we issued in December of 'twenty one.

Speaker 3: As we progress through the recovery, we have made meaningful investments in operational reliability and our people. Delta has led the industry in setting the bar for wages, including a new pilot deal.

As we progress through the recovery, we have made meaningful investments in operational reliability and our people Delta has led the industry in setting the bar for wages, including a new pilot deal and profit sharing.

Speaker 3: We are seeing the structural step up in operating costs amid increasing fuel prices, creating some near-term pressure on industry margin.

We are seeing the structural step up in operating costs amid increasing fuel prices, creating some near term pressure on industry margins. However, I fully expect that the market will adjust to higher cost as it has historically and reestablish equilibrium with.

Ed Bastian: We were the only airline to make the top 100 of this prestigious list. And USA Today readers just selected Delta as the best airline in the world. Our operational fundamentals remain strong, underscored by Delta's industry leading position in on-time arrivals and blue sky operational performance that is reliably back to pre-COVID levels. Following a high number of irregular operations days early in the quarter, driven by weather and ATC constraints, we have seen consistent improvement in our operating metrics. In October, we are running a near perfect completion factor across the main line system and we remain number one in on-time arrivals year to date.

Speaker 3: However, I fully expect that the market will adjust to higher costs as it has historically and reestablish equalim.

Speaker 3: Delta's differentiated premium revenue strategy and strong global network, we will continue to deliver industry leading profitability and generate robust free cash flow.

With Delta is differentiated premium revenue strategy and strong global network, we will continue to deliver industry, leading profitability and generate robust free cash flow.

Speaker 3: In closing, the strategy that we shared at investor day positions us well for the future.

In closing the strategy that we shared at Investor day positions us well for the future.

Speaker 3: And while the environment we operate in continues to evolve in this post-COVID world, our objectives are unchanged as we move into 2024.

And while the operate the environment. We operate in continues to evolve in this post COVID-19 world. Our objectives are unchanged as we move into 2024.

Speaker 3: with our network rebuilt and growth now moderating, optimizing the airline and driving efficiency are significant.

With our network rebuilt and growth now moderating optimizing the airline and driving efficiency our significant opportunities.

Ed Bastian: As we're now in the final phase of our recovery, we are making important forward leaning investments in the health and reliability of our fleet. These maintenance investments will position us to consistently deliver the operational excellence that underpins Delta's brand, running a high-quality operation is critical to being the airline of choice for our customers and driving a competitive cost structure. Dan will speak more to this shortly.

Speaker 3: Thank you again for your support of our company. And with that, let me hand it over to Glenn and to Dan to go through the details.

Thank you again for your support of our company and with that let me hand, it over to Glen and to Dan to go through the details of the quarter.

Speaker 3: Thank you, Ed, and good morning. I want to start by thanking all of our employees for their hard work and dedication during the busy summer travel season.

Thank you Ed and good morning, I wanted to start by thanking all of our employees for their hard work and dedication during the busy summer travel season.

Speaker 4: In the September quarter, Delta generated revenue of 14.6 billion, up 13% over prior year.

In the September quarter Delta generated revenue of $14 6 billion up 13% over prior year.

Ed Bastian: During the quarter, we also made a $150 million strategic investment in wheels up, co-investing alongside Sir Taurus' management, Nighthead Capital, and others. This new investment structure combines the number one premium commercial airline with the travel and tourism expertise of Sir Taurus and the turnaround expertise of Nighthead. Delta's relationship with wheels up creates a new premium product line for our customers and I look forward to working with our co-investors and the new management team to unlock the full value of this uniquely positioned business.

Speaker 4: Total unit revenues were down 2.5%, including a point of pressure from cargo and MRR.

Total unit revenues were down two 5%, including a point of pressure from cargo in MRO.

Speaker 4: With these results, I expect Delta to deliver a record September quarter unit revenue premium versus the industry, reflecting the continued success of our

With these results I expect delta to deliver a record September quarter unit revenue premium versus the industry, reflecting the continued success of our commercial strategy.

Domestic passenger revenue was up 6% over prior year performance was steady through the quarter, we strengthen our coastal hubs, where we are leveraging our leading positions in generational airport builds.

Speaker 4: Domestic passenger revenue was up 6% over prior year. Performance was steady through the quarter, with strength in our coastal hubs, where we are leveraging our leading positions and generational airport bill.

Speaker 4: International passenger revenue grew 35% with the transatlantic and Pacific outperforming are already high expectations.

Ed Bastian: Turning to our outlook, travel remains the top purchase priority and our core customer base is in a healthy financial position. We continue to see strength in bookings across Delta's global network driven by our consumers. Demand for premium experiences, international travel, and increasing business travel further differentiate the trends that Delta is seen within the industry. We expect our December quarter revenues to be 10 percent higher than 2022, with a 10 percent operating margin and earnings of over $1 per share.

International passenger revenue grew 35% with the Trans Atlantic and Pacific outperforming our already high expectations.

Speaker 4: We delivered record margins across all international entities this summer, and strength is continuing through the fall.

We delivered record margins across all international entities. This summer and strength is continuing through the fall.

Demand for our premium products is very strong with revenue up 17% over prior year outperforming main cabin by five points.

Speaker 4: Demand for our premium products is very strong with revenue of 70% over prior year, outperforming main cabin by 5.

Speaker 4: Domestic paid load factor in our first class cabins was a record as we continue to advance our premium merchandising and upsell keep up.

Domestic paid load factor in our first class cabins was a record as we continue to advance our premium merchandising and up sell capabilities.

Speaker 4: Delta Premium Select has now been rolled out to over 85% of long-haul flights and the revenue generation from this product has been above expectations and a key contributor to our record international mark.

Delta premium select has now been rolled out to over 85% of long haul flights and the revenue generation from this product has been above expectations and a key contributor to our record international margins.

Ed Bastian: This brings our expectation for full-year earnings to over $6 per share on a double-digit operating margin and free cash flow of $2 billion. Since raising full-year guidance over the summer, our revenue outlook has improved, though earnings and cash flow have been impacted by higher fuel and maintenance costs. Revenue for the full-year is expected to increase 20 percent over last year, which was the high end of our expectations on steady domestic demand and continued strength in international.

Business travel continues to steadily improve as corporates continue with turned to office initiatives.

Speaker 4: Business travel continues to steadily improve as corporates continue with return to office initiatives.

Speaker 4: Let's recover it's sectors like technology and financial services saw double digit growth during the quarter.

Lets recovered sectors like technology and financial services saw a double digit growth during the quarter.

Our recent corporate survey indicates continued growth in business demand with a significant majority of companies are expecting their travel to stay the same or increase as we move into <unk> and into 'twenty four.

Speaker 4: Our recent corporate survey indicates continued growth in business demand with a significant majority of companies expecting their travel to stay the same or increase as we move into 4Q and into 20.

Ed Bastian: With strong top line growth and margin expansion, we expected double earnings year-over-year and deliver a 13 percent return on invested capital. Our outlook for 2023 keeps revenue, earnings, cash flow, and debt reduction on track with our three-year plan, which we issued in December of $1.00 per share on a double-digit operating margin, which is expected to at 21. As we progress through the recovery, we have made meaningful investments in operational reliability and our people.

Speaker 4: SME and hybrid travelers are producing margins in line with corporate travelers and demand from these travel remains well above 2019 level

SME and hybrid travelers are producing margins in line with corporate travelers and demand from these travel remains well above 2019 levels.

Total loyalty revenue was up 17% over prior year with continued strength in our American Express co brand portfolio.

Speaker 4: Total loyalty revenue was up 17% over a prior year with continued strength in our American Express growth co-brand portfolio.

Speaker 4: Amics Renumeration of 1.7 billion grew approximately 20% over prior year.

Amex renewing ration of $1 7 billion grew approximately 20% over prior year.

Ed Bastian: Delta has led the industry in setting the bar for wages, including a new pilot deal and profit sharing. We are seeing the structural step up in operating costs amid increasing fuel prices, creating some near-term pressure on industry margins. However, I fully expect that the market will adjust to higher costs. As it has historically and reestablished equilibrium, with Delta's differentiated premium revenue strategy and strong global network, we will continue to deliver industry leading profitability and generate robust free cash flow.

Speaker 4: We expect full-year renumeration of close to $7 billion and are focused on reaching our long-term goal of $10 billion.

We expect full year renewable ration of close to $7 billion and are focused on reaching our long term goal of $10 billion.

Diversified revenue streams, including premium and loyalty have generated 55% of revenue year to date, reflecting delta is differentiated positioning to the industry.

Speaker 4: Diversified revenue streams, including premium and loyalty, have generated 55% of revenue year-to-date reflecting Delta's differentiated positioning to the industry.

Turning to the December quarter, we expect total unit revenue to grow 9% to 12% over prior year, bringing our full year revenues to up 20% over prior year.

Speaker 4: Turning to the December quarter, we expect total unit revenue to grow 9 to 12% over prior year, bringing our full year revenues to up 20% over prior year.

Speaker 4: This is at the high end of our guidance, even with a few points less capacity than we had planned for the year, reflecting robust man for the Delta product.

This is at the high end of our guidance, even with a few points less capacity than we had planned for the year, reflecting robust demand for the delta product.

Ed Bastian: In closing, the strategy that we shared at investor day positions us well for the future, and while the environment we operate in continues to evolve in this post-COVID world, our objectives are unchanged as we move into 2024. With our network rebuilt and growth now moderating, optimizing the airline and driving efficiency are significant opportunities.

Speaker 4: Capacity in the forest quarter is expected to be up 14 to 15 percent Implying total unit revenues down 2.5 to 4.5 percent versus prior year

Capacity in the fourth quarter is expected to be up 14% to 15%, implying total unit revenues down two 5% to four 5% versus prior year.

Speaker 4: Domestic and transatlantic trends are expected to be consistent with a third quarter. Pacific and Latin America unit revenue trends are expected to be modest, excuse me, expected to modestly decelerate giving capacity growth related to China reopening and investment in our Lottom JV.

Domestic and Trans Atlantic trends are expected to be consistent with the third quarter.

Specific in Latin America unit revenue trends are expected to be modest.

Ed Bastian: Thank you again for your support of our company, and with that, let me hand it over to Glenn and to Dan to go through the details of the work.

Gives me expected to modestly decelerate given capacity growth related to China, reopening and investment in our lepton JV.

Glen Hauenstein: Thank you, Ed, and good morning. I want to start by thanking all of our employees for their hard work and dedication during the busy summer travel season. In the September quarter, Delta generated revenue of $14.6 billion, up 13% over prior year. Total unit revenues were down 2.5%, including a point of pressure from cargo and MRO. With these results, I expect Delta to deliver a record September quarter unit revenue premium versus the industry, reflecting the continued success of our commercial strategy.

Speaker 4: Domestic demand remains steady and initial bookings for the peak holiday periods are strong. Beyond going UAW and actor strikes are having a modest impact and we have incorporated those into our out.

Domestic demand remained steady and initial bookings for the peak holiday periods are strong <unk>.

Ongoing UAW and actress strikes are having a modest impact and we have incorporated those into our outlook.

As we move through the fourth quarter, our domestic capacity growth moderates and in the first quarter of 2024, we expect domestic capacity to be flat to slightly down year over year.

Speaker 4: As we move through the fourth quarter, our domestic capacity growth moderates. And in the first quarter of 2024, we expect domestic capacity to be flat, to slightly down near over year.

Speaker 4: We have reallocated capacity to international leisure where we are expecting strong returns and remain focused on fully restoring our higher margin core hub.

We have reallocated capacity to international leisure wear we are expecting strong returns and remain focused on fully restoring our higher margin core hubs.

Speaker 4: On international, we are seeing continued demands drank through the winter. The transatlantic remains very strong, driven by partner hubs and southern European leisure traffic performance.

On International we are seeing continued demand strength through the winter the Trans Atlantic remains very strong driven by partner hubs and southern European leisure traffic performance.

Glen Hauenstein: Domestic passenger revenue was up 6% over prior year. Performance was steady through the quarter with strength in our coastal hubs, where we are leveraging our leading positions and generational airport bills. International passenger revenue grew 35% with the transatlantic and Pacific outperforming are already high expectations. We delivered record margins across all international entities this summer, and strength is continuing through the fall. Demand for our premium products is very strong with revenue of 70% over prior year, outperforming main cabin by five points.

Speaker 4: We're closely monitoring the situation in Israel as we will evaluate restarting the flights as the situation stabilizes.

We're closely monitoring the situation in Israel, as we will evaluate restarting the flights as the situation stabilizes.

Speaker 4: In the Pacific, we expect to grow December quarter capacity 40 to 50% as we continue restoring the network.

In the Pacific, we expect to grow December quarter capacity, 40% to 50% as we continue restoring the network.

Speaker 4: While this level of growth will impact unit revenue, we expect the new flying will be profit accretive.

While this level of growth will impact unit revenue, we expect the new flying will be profit accretive.

Speaker 4: For the year, we remain confident in finishing strong with record profitability across all three international entities.

For the year, we remain confident in finishing strong with record profitability across all three international entities.

Glen Hauenstein: Domestic paid load factor in our first class cabins was a record as we continue to advance our premium merchandising and upsell capabilities. Delta premium select has now been rolled out to over 85% of long-haul flights and the revenue generation from this product has been above expectations and a key contributor to our record international margins. Business travel continues to steadily improve as corporates continue with return to office initiatives. Less recovered sectors like technology and financial services saw double digit growth during the quarter. Our recent corporate survey indicates continued growth in business demand with a significant majority of companies expecting their travel to stay the same or increase as we move into 4Q and into 24.

Speaker 4: In closing, I'm proud of the revenue performance that our teams have delivered, and I'm confident that our integrated commercial strategy will continue to drive industry leading profitability. And with that, I'll turn it over to Dan.

In closing I am proud of the revenue performance of our teams have delivered and I am confident that our integrated commercial strategy, we will continue to drive industry leading profitability.

And with that I'll turn it over to Dan to talk about the financials.

Speaker 5: Thank you, Glenn, and good morning to everyone. For the September quarter, we delivered earnings of $2.03 per share and operating margin of 13.5%.

Thank you Glenn and good morning to everyone for the September quarter, we delivered earnings of $2 <unk> per share and operating margin of 13, 5%.

Non fuel unit costs were up one 3% year over year and fuel prices averaged $2 78, a gallon, including a refinery benefit of 11.

Speaker 5: Non-fuel unicost were up 1.3% year over year, and fuel prices averaged $2.78 a gallon, including a refinery benefit of 11 cents.

We generated operating cash flow of $1 1 billion and we invested reinvested $1 4 billion into the business.

Speaker 5: We generated operating cash flow of 1.1 billion, and we invested, reinvested 1.4 billion into the business.

Speaker 5: Equity ended the quarter at 7.8 billion and adjusted net debt of 20.2 billion.

Liquidity ended the quarter at $7 8 billion and adjusted net debt of $20 2 billion.

Glen Hauenstein: IV. SME and hybrid travelers are producing margins in line with corporate travelers, and demand from these travel remains well above 2019 levels. Total loyalty revenue was up 17% over prior year with continued strength in our American Express Co-brand portfolio. Annex Renumeration of $1.7 billion grew approximately 20% over prior year. We expect full year renumeration of close to $7 billion and are focused on reaching our long-term goal of $10 billion. Diversified revenue streams, including premium and loyalty, have generated 55% of revenue year-to-date reflecting Delta's differentiated positioning to the industry.

Speaker 5: Year to date, we've repaid $3.7 billion of gross debt. This is including 1.7 billion of accelerated repayments on our higher cost.

Year to date, we have repaid $3 $7 billion of gross debt.

This is including $1 $7 billion of accelerated repayment on our higher cost debt.

Our leverage ratio improved to three times on a trailing 12 month basis.

Speaker 5: Our leverage ratio improved to three times on a trailing 12 month base.

During the quarter S&P upgraded our credit rating to double B, plus one notch away from investment grade.

Speaker 5: During the quarter, S&P upgraded our credit rating to double B plus one notch away from investment grade. A recognition of our improving

A recognition of our improving financial foundation.

Speaker 5: Our capital allocation priorities are reinvesting in the business and improving our balance sheet to investment grade metrics when a modest cash return to shareholders through our give-

Our capital allocation priorities are reinvesting in the business.

And improving our balance sheet to investment grade metrics with a modest cash returned to shareholders through our dividend.

Glen Hauenstein: Turning to the December quarter, we expect total unit revenue to grow 9% to 12% over prior year bringing our full year revenues to up 20% over prior year. This is at the high end of our guidance, even with a few points less capacity than we had planned for the year, reflecting robust man for the Delta product. Capacity in the fourth quarter is expected to be up 14 to 15% implying total unit revenues down 2.5 to 4.5% versus prior year.

Now moving to guidance for the December quarter, we expect non fuel unit cost to be flat to up 2% on a year over year basis.

Speaker 5: Now moving to guidance. For the December quarter, we expect non-cool unit costs to be flat to up 2% on a year-over-year base.

Speaker 5: With the exception of maintenance costs, our second half unit costs are progressing as expect.

With the exception of maintenance costs are second half unit costs are progressing as expected.

Speaker 5: As we discussed in September , there are free drivers to hire maintenance. First...

As we discussed in September there are three drivers to higher maintenance.

<unk> investment in fleet health.

Speaker 5: Second, expanded work scope on our 7-5-7 engine fleet. And third, challenges.

Expanded work scope on our 757 engine fleet and third challenges across the supply chain.

Glen Hauenstein: Domestic and transatlantic trends are expected to be consistent with a third quarter. Pacific and Latin America unit revenue trends are expected to be modest, excuse me, expected to modestly decelerate given capacity growth related to China reopening and investment in our Latom JV. Domestic demand remains steady and initial bookings for the peak holiday periods are strong. Beyond going UAW and actor strikes are having a modest impact and we have incorporated those into our outlook.

Speaker 5: On Fleet Health and Reliability, our investments are starting to deliver improved operational

On fleet health and reliability, our investments are starting to deliver improved operational performance. Our September metrics were ahead of August and October is ahead of September .

Speaker 5: The timber metrics were ahead of August and October is ahead of the timber.

Speaker 5: On the 757 engine, a workhorse in our fleet. We're going through a wave of the overhaul.

On the $75 seven engine, a workhorse and our fleet, we're going through a wave of overhauls. The engines, we took off wing over the summer required larger work scope and a higher mix of new parks.

Speaker 5: engine we took off wing over the summer required larger work scope and a higher mix of new parts.

Speaker 5: Looking forward, we are forecasting higher new material consumption rate.

Looking forward, we are forecasting higher new material consumption rates.

Glen Hauenstein: As we move through the fourth quarter our domestic capacity growth moderates and in the first quarter of 2024 we expect domestic capacity to be flat to slightly down year over year. We have reallocated capacity to international leisure where we are expecting strong returns and remain focused on fully restoring our higher margin core hubs. On international we are seeing continued demand strength through the winter. The transatlantic remains very strong driven by partner hubs and Southern European leisure traffic performance.

Speaker 5: On supply chain, the industry continues to face challenges that will take time to work through.

On supply chain the industry continues to face challenges that will take time to work through.

Speaker 5: Engine and airframe turnaround times remain elevated, driving inefficiency and impacting products.

Engine and airframe turnaround times remain elevated driving inefficiency and impacting productivity.

Speaker 5: We are working closely with our partners and leveraging our deep expertise in tech ops to manage supply chain challenge.

We are working closely with our partners and leveraging our deep expertise in tech ops to manage supply chain challenges.

Speaker 5: Delta has a long heritage of industry leading operational performance driven by the best tech-ops capability in the industry.

Delta has a long heritage of industry, leading operational performance driven by the best Tech ops capability in the industry.

Speaker 5: Operational excellence is central to our brand promise and a key pacing of

Operational excellence is central to our brand promise.

Glen Hauenstein: We are closely monitoring the situation in Israel as we will evaluate restarting the flights as the situation stabilizes. In the Pacific we expect to grow December quarter capacity 40 to 50% as we continue restoring the network. While this level of growth will impact unit revenue we expect the new flying will be profit accretive. For the year we remain confident in finishing strong with record profitability across all three international entities.

And a key pacing item to drive out inefficiencies.

Moving to fuel fuel prices have moved higher since July , adding roughly $400 million of expense to our outlook for the second half of the year.

Speaker 5: Moving to fuel, fuel prices have moved higher since July , adding roughly 400 million of expense to our outlook for the second half of the year.

Speaker 5: We expect December fuel prices to be $2.90 to $3.20 per gallon with the refinery expected to be roughly break even for the court.

We expect December fuel prices to be $2 90 to.

The $3 20 per gallon with the refinery expected to be roughly breakeven for the quarter there.

Speaker 5: The refinery turnaround is progressing as we planned, and we expect production to resume in mid-note.

The refinery turnaround is progressing as we planned and we expect.

Glen Hauenstein: In closing I'm proud of the revenue performance our teams have delivered and I'm confident that our integrated commercial strategy will continue to drive industry leading profitability.

Production to resume in mid November .

Speaker 5: Based on our December quarter outlook for revenue and cost, we expect earnings of $1.5 to $1.30 per share, on a 9 to 11%

Based on our December quarter outlook for revenue and cost we expect earnings of $1 five to $1 30 per share.

Dan Janki: And with that I'll turn it over to Dan to talk about the financials. Thank you Glenn and good morning to everyone. For the September quarter we delivered earnings of two dollars and three cents per share and operating margin of 13.5%. Non-fuel unit costs were up 1.3% year over year and fuel prices averaged two dollars in 78 cents including a refinery benefit of 11 cents. We generated operating cash flow of $1.1 billion, and we invested, reinvested $1.4 billion into the business, liquidity ended the quarter at $7.8 billion, and adjusted net debt of $20.2 billion.

On a 9% to 11% operating margin.

Speaker 5: This brings our full year outlook to earnings to $6.25 per share, a double-digit operating margin, and free cash flow of $2 billion.

This brings our full year outlook to earnings to $6 to $6 25 per share on double digit operating margin and free cash flow of $2 billion.

We are focused on finishing the year strong remain committed to delivering industry, leading margin performance earnings growth and strong cash generation.

Speaker 5: We are focused on finishing the year strong, remain committed to delivering industry leading margin, performance, earnings growth, and strong cash generation.

Speaker 5: As we progress through the 2024 planning process, our focus is shifting from restoration to optimization.

As we progress through the 2020 for planning process, our focus is shifting from restoration to optimization.

Speaker 5: Over the last two years, we've grown at an unprecedented rate for an airline of our size to restore our numbers.

Over the last two years, we've grown at an unprecedented rate for an airline of our size to restore our network.

Dan Janki: Year to date, we've repaid $3.7 billion of gross debt. This is including $1.7 billion of accelerated repayments on our higher cost debt. Our leverage ratio improved to three times on a trailing 12 month basis. During the quarter, S&P upgraded our credit rating to double B plus, one notch away from investment grade. A recognition of our improving financial foundation.

Speaker 5: Growth is normalizing next year, and we expect operational reliability to continue to improve. This will allow us to optimize.

Growth is normalizing next year, and we expect operational reliability to continue to improve.

This will allow us to optimize how we run the airline reducing operational buffers and driving out inefficiencies that have resulted from the intensity of the rebuild.

Speaker 5: reducing operational buffers and driving out inefficiencies that have resulted from the intensity of the rebound.

Speaker 5: Our capacity growth for 2024 will be focused on Delta's areas of strength.

Our capacity growth for 2024 will be focused on delta's areas of strength.

Speaker 5: domestically, we are prioritizing our core high-margin hub.

Domestically, we are prioritizing our core high margin hubs.

Dan Janki: Our capital allocation priorities are reinvesting in the business, and improving our balance sheet to investment grade metrics, with a modest cash return to shareholders through our dividend. Now moving to guidance. For the December quarter, we expect non-hool unit costs to be flat to up 2% on a year over your basis. With the exception of maintenance costs, our second half unit costs are progressing as expected. As we discussed in September, there are three drivers to hire maintenance.

Speaker 5: Driving connectivity, engage. Internationally, we are leveraging our best in class JV partnerships and increasing the mix of flying on NIS.

Driving connectivity engage internationally, we are leveraging our best in class JV partnerships and.

And increasing the mix of flying on next generation aircraft.

Speaker 5: We are executing against the strategy and financial objectives we laid out at our investor day. With an emphasis on free cash flow, earnings, durability.

We are executing against the strategy and financial objectives, we laid out at our Investor day with an emphasis on free cash flow.

Earnings durability and capital efficiency.

In closing.

Speaker 5: Delta is well positioned to maintain industry leadership, operationally and finance.

Delta is well positioned to maintain industry leadership operationally and financially.

Dan Janki: First, investment in fleet health. Second, expanded work scope on our $7.57 engine fleet. And third, challenges across the supply chain. On fleet health and reliability, our investments are starting to deliver improved operational performance. Our September metrics were ahead of August, and October is ahead of September. On the $7.57 engine, a work course in our fleet, we're going through a wave of overhalls. The engines we took off wing over the summer required larger work scope and a higher mix of new parts.

Speaker 5: I'd like to sincerely thank the Delta people

I'd like to sincerely, thank the delta people for everything they do everyday.

With that I'll turn it back to Julie for Q&A.

Speaker 2: Thanks Dan. Matthew, can you please remind the analysts how to feel for...

Thanks, Dan Matthew can you please remind the analysts had a killer.

Certainly at this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.

Speaker 1: Certainly, at this time we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time.

Speaker 1: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality.

We do ask them about posing a question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.

Dan Janki: Looking forward, we are forecasting higher new material consumption rates. On supply chain, the industry continues to face challenges that will take time to work through. Engine and airframe turnaround times remain elevated, driving inefficiency and impacting productivity. We are working closely with our partners and leveraging our deep expertise in tech ops to manage supply chain challenges. Delta has a long heritage of industry leading operational performance, driven by the best tech ops capability in the industry. Operational excellence is central to our brand promise, and a key pacing item to drive out inefficiencies.

Speaker 1: We do ask that all Q and A participants please limit to one question and one follow-up question, then re-enter the queue.

We do ask that all Q&A participants please limit to one question and one follow up question then reenter the queue.

Speaker 1: If you have any questions or comments, please press star one on your phone. Please hold Wallypole for questions.

And again, if you have any questions or comments. Please press star one on your phone.

Please hold while you poll for questions.

Speaker 1: Your first question is coming from Jamie Baker from J.P. Morgan. Your line is live.

Your first question is coming from Jamie Baker from Jpmorgan. Your line is live.

Speaker 6: Hey, good morning, everybody. So Dan, expanding on some of your engine comments, we're obviously focused on the GTF situation. I realize you're not, or at least I don't believe you're directly impacted with any groundings right now. I'm just trying to square the situation against your MRO and your GTF in the house.

Hey, good morning, everybody, so Dan expanding on some of your engine comments, we're obviously focused on the gtx situation.

I realize youre not at least I don't believe youre directly impacted with any groundings right now.

Just trying to square the situation.

Against your MRO and Youre GTS in house.

Speaker 6: expertise. I mean, is there a scenario where the prep mess?

Expertise I mean is there a scenario where the pratt.

Dan Janki: Moving to fuel, fuel prices have moved higher since July, adding roughly 400 million of expense to our outlook for the second half of the year. We expect December fuel prices to be $2.90 to $3.20 per gallon, with the refinery expected to be roughly break even for the quarter. The refinery turnaround is progressing as we planned, and we expect production to resume in mid-November. Faced on our December quarter outlook for revenue and cost, we expect earnings of $1.5 to $1.30 per share on a 9-11% operating margin. This brings our full year outlook to earnings to $6.25 per share on double-digit operating margin and free cash flow of $2 billion.

That.

Speaker 6: ends up benefiting Delta or should we think more about, you know, simply reducing the downside relative to some of your peers? Also, how does this impact the maintenance cost guide embedded in your 2024 CAS and expectations? Thanks.

Ends up benefiting delta or should we think more about.

Simply reducing the downside relative to some of your peers are also how does this impact the maintenance cost guide embedded in your 2024 CASM expectations. Thanks.

Speaker 5: We first start with the Guiratervo Fenn as it relates for correctly to our fleet. Both on the NEO, we took our deliveries later. So the impact will be modest to minimal. There are any inspections or things off-wing. It will be in the latter half of 2024, based on the analysis that we've gotten so far from Pratt. We're still waiting on the full analysis related to the 220 fleet. That should be coming later this month, and we will set that impact.

Maybe first start with the geared turbofan as it relates directly to our fleet both on the Neo we took our deliveries later.

So the impact will be modest due to minimal if there are any inspections are things off wing. It will be in the latter half of 2024 based on the analysis.

That we've gotten so far from Pratt.

We'll still waiting on the full analysis related to the 220 fleet that should be coming later this month, and we will assess that impact.

Speaker 5: appropriately. As it relates to MRO, Pratt is certainly a close partner of ours and an important one is it relates to that third-party capability. And we will certainly support their efforts working closely with them on that. We have capacity to ultimately come down to the allocation of capacity and availability and material to do the work, but we'll be working with them through fall and into next year on that.

Appropriately as it relates to MRO proud is certainly a part a close partner of ours, an unimportant one as it relates to that third party capability.

Dan Janki: We are focused on finishing the year's strong, remain committed to delivering industry-leading margin, performance, earnings growth, and strong cash generation. As we progress through the 2024 planning process, our focus is shifting from restoration to optimization. Over the last two years, we've grown at an unprecedented rate for an airline of our size to restore our network. Growth is normalizing next year, and we expect operational reliability to continue to improve. This will allow us to optimize how we run the airline, reducing operational buffers, and driving out inefficiencies that have resulted from the intensity of the rebuild.

And we will certainly support their efforts were working closely with them on that we have capacity to ultimately comes down to the allocation of capacity and availability of material to do the work but.

But we'll be working with them through fall and into next year on that.

Speaker 6: Okay, that's helpful. And then for Glenn, I've asked about this before, a lot of Delta customers obviously took fairly lavish European vacations this year. You had SkyMiles data on these folks. What's the correlation between big summer spenders and big winter?

Okay. That's helpful and then for Glenn.

I asked about this before a lot of Delta customers, obviously took.

Fairly lavish European vacations. This year you have skymiles data on these folks.

The correlation between <unk>.

Some are spenders and big winter.

Speaker 6: you know, what's that? I don't know, sort of SkyMiles, Venn diagram look like because, you know, what I'm wondering about is the potential for people scaling back on their winter trips because, you know, they spent lavishly on their, you know, their summer holidays. Any actual data you can share on that. Thanks, and good luck.

Spenders whats that I don't know so of Skymiles Venn diagram look like because what I'm wondering about is the potential for people's scaling back on their winter trips because they spent lavishly on their their summer holidays any actual data you can share on that thanks.

Dan Janki: Our capacity growth for 2024 will be focused on Delta's areas of strength. Domestically, we are prioritizing our core, high-margin hubs, driving connectivity, engage. Internationally, we are leveraging our best-in-class JV partnerships and increasing the mix of flying on next-generation aircraft. We are executing against the strategy and financial objectives we laid out at our investor day, with an emphasis on free cash flow, earnings, durability, and capital efficiency.

Speaker 4: Sure, I think what we're really excited about is the lengthening of the European travel season.

Sure I think.

What we're really excited about is the lengthening of the European travel season and.

Speaker 4: And that has really gone from primarily ending in the summer Iodices in which we would be October . Now through the holidays, through the New Year, and really now we're only talking about a six to eight week period that are the doldrums for Europe . So the bookings, which most people wouldn't have expected, of course, we would do so are a schedule in the fall in the winter Iodices, but our year over year comps are actually accelerating into the winter.

That has really gone from primarily ending in the summer outage season, which would be October now through November through the holidays through the new year and really now we're only talking about six to eight week period that are are the doldrums for Europe . So the bookings.

Dan Janki: In closing, Delta is well positioned to maintain industry leadership operationally and financially. I'd like to sincerely thank the Delta people for everything they do every day.

Which most people wouldn't have expected of course, we reduce our schedule in the fall and the winter IATA season, but our year over year comps are actually accelerating into the winter.

Julie Stewart: With that, I'll turn it back to Julie for Q&A. Thanks, Dan.

Speaker 4: as we look into November , December and January . So I think we're seeing that continuing into the fall and early parts of winter, and we're very excited about that, and we've also, of course, expanded into a lot more Latin leisure this winter than we did last winter, and the events demand for that seems very, very robust. So leisure is still very strong, and even through shoulder and off-peak periods.

As we as we look into November December and January So I think we're seeing that continuing into the fall and early parts of winter and we're very excited about that and we've also of course expanded into a lot more Aladdin user of this winter than we did last winter and the events demand for that seems very very robust so.

Matthew: Matthew, can you please remind the analysts how to fuel for a profit? Certainly.

Matthew: At this time, we'll be conducting a question-and-answer session. If you have any questions or comments, please press star-1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. We do ask that all Q&A participants please limit to one question and one follow-up question, then re-enter the queue. Once again, if you have any questions or comments, please press star-1 on your phone. Please hold while you pull for questions.

Leisure is still very strong and even through shoulder and off peak periods.

Okay. Thanks, Glenn Thanks, everybody take care.

Speaker 1: Thank you. Your next question is coming from Salvi Sith from Raymond James. Your line is live.

Thank you. Your next question is coming from Savi <unk> from Raymond James Your line is live.

Jamie Baker: Your first question is coming from Jamie Baker from JP Morgan. Your line is live. Hey, good morning, everybody. So, Dan, expanding on some of your engine comments, we're obviously focused on the GTF situation. I realize you're not, or at least I don't believe you're directly impacted with any groundings right now. I'm just trying to square the situation against your MRO and your GTF in-house expertise. I mean, is there a scenario where the Pratt mess ends up benefiting Delta, or should we think more about, you know, simply reducing the downside relative to some of your peers? Also, how does this impact the maintenance cost guide embedded in your 2024 CAS and expectations?

Speaker 7: Hey, good morning. If I'm on Glenn, just be your comment about domestic capacity being slapped down in the first quarter. I was just wondering if that was a decent trend for the full year or if it was related to also in a last year the way for its quarter to turn that was in what you expected and you were going to make some capacity changes. So is that?

Hey, good morning.

Glenn just your comment about domestic capacity being flat to down in the first quarter.

I was just wondering if that was a decent churn for the full year or is it was related to also in our last year.

First quarter is kind of trend that wasn't what you expected and you were going to make some capacity changes so does that.

Speaker 7: related to that as well, or is it more, kind of, weakness that you're seeing recently, or maybe strengthened, and then in the national and the relative base.

Related to that as well or is it more of kind of weakness that youre seeing recently or maybe strengthen and then internationally on a relative basis, it's really a reshaping of the demand patterns that we saw last year.

Speaker 4: It's really a reshaping of the demand patterns that we saw last year.

And no shock January and February are not in the northern tier Transcanada East West markets Barnburner market, So reallocating those to.

Speaker 4: and no shock, January and February are not in the northern tier trans-Gonze east-west markets, barn burner markets. So, reallocating those to warmer and thinnier places. So, our total capacity will be up, domestic capacity will be down slightly, core hubs will actually be up with more emphasis on warm and thinning places in Latin America and South Pacific end.

Warmer and Sunnier places so our total capacity will be up domestic capacity will be down slightly core hubs will actually be up with more emphasis on warm and Sunny places in Latin America.

Dan Janki: Thanks. Maybe first start with the gear turbofan as it relates more correctly to our fleet. Both on the Neo, we took our deliveries later. So the impact will be modest to minimal. If there are any inspections or things off-wing, it will be in the latter half of 2024 based on the analysis that we've gotten so far from Pratt. We're still waiting on the full analysis related to the 220 fleet. That should be coming later this month and we will set that impact.

And South Pacific.

Speaker 4: That's kind of how it was profiling and really optimization of the demand patterns we saw last year going into.

So.

That's kind of how we're profiling and really optimization of the demand patterns, we saw last year going into this winter.

Speaker 7: that makes sense. And if I'm also on domestic revenue, you know, you've been stable at Delta since kind of June .

That makes sense.

I might also just on domestic unit revenue, it's been stable at Delta.

Ian.

Speaker 7: I was wondering how much of a contribution you're getting from restoring your hubs and separately, perhaps, the domestic portion of international trips, even what you've talked about. This strength kind of continuing and transatlantic longer than kind of historic.

Dan Janki: Appropriately. As it relates to MRO, Pratt is certainly a close partner of ours, and an important one is it relates to that third party capability, and we will certainly support their efforts working closely with them on that. We have capacity to ultimately come down to the allocation of capacity and availability and material to do the work, but we'll be working with them through fallen into next year on that. Okay, that's helpful.

I was wondering how much contribution you are getting from restoring your hubs and separately perhaps.

Domestic portion of international Chad given what you've talked about this the strength continuing in trans atlantic longer than than kind of historic.

Speaker 7: The reason I asked it, it seems that stable comment is a little bit different than maybe what we're hearing from kind of a purely domestic airline.

Reason I ask is it seems that stable comment is it a little bit different than maybe what we're hearing from.

Kind of a purely domestic airlines.

Speaker 4: Right, right. I think what domestic strength is really coming from are the premium products to mess.

Right right I.

Glen Hauenstein: And then for Glen, you know, I've asked about this before, you know, a lot of Delta customers obviously took, you know, fairly lavish European vacations this year. You had SkyMiles data on these folks. What's the correlation between big summer spenders and big winter spenders, you know, what, what's that?

I think what domestic strength is really coming from the premium products domestically.

Speaker 4: And I'm not going to speak for the other carriers. They all have coming in the next few weeks, but it really hasn't been on domestic portion of international journey, which is diminimus in terms of the variance to what it was last year. Our employment's in the transatlantic or up low double digits, but that only represents 13% of our total travel. So really a diminimus impacted domestic.

And.

I'm not going to speak for the other carriers. They all have coming in the next few weeks, but it really hasnt been on domestic portion of international journey, which is de Minimis in terms of the variance to what it was last year.

Our employment's too in the Trans Atlantic are up low double digits, but that only represents 13% of our total travel so really a de minimis impact to domestic.

Glen Hauenstein: I don't know, sort of SkyMiles then diagram look like because, you know, what I'm wondering about is the potential for people scaling back on their winter trips because, you know, they spent lavishly on their, you know, their summer holidays. Any actual data you can share on that? Thanks, I think. Sure, I think what we're really excited about is the lengthening of the European travel season. And that has really gone from primarily ending in the summer out of season, which would be October.

Speaker 4: So it's really coming from the premium products and they're doing quite well, as I mentioned, domestic first-class paid first-class load factors are reaching new heights every month.

So it is really coming from the premium products.

Going quite well as I mentioned.

Domestic first paid first class load factors.

Reaching new Heights every month so.

Speaker 4: very excited about those demand trends and I think that reinforces the strategy we've been working on for the last 10 years to have a differentiated product.

Very excited about those demand trends and I think that reinforces the strategy. We have been working on for the last 10 years to have a differentiated product.

Helpful. Thank you.

Thank you. Your next question is coming from Connor Cunningham from Melius Research Your line is live.

Speaker 1: Thank you. Your next question is coming from Conor Cuttingham, Somalius Research. Your line is live.

Glen Hauenstein: Now through November through the holidays through the new year. And really now we're only talking about a six to eight week period. That are the doldrums for Europe. So the bookings, which most people wouldn't have expected. Of course, we reduce our schedule in the fall and the winter right out of season. But our year of year comps are actually accelerating into the winter as we, as we look into November December and January.

Everyone. Thank you.

Speaker 8: Everyone, thank you. Ed, in the prepared remarks, I think you touched on field recapture. You know, right now, that doesn't seem to be much of an adjustment on the capacity side from some of your industry participants despite like a radic field. So just trying to understand that there's a new calculus to how you're approaching field recapture right now in the current market. Thank you.

Pat in the prepared remarks, I think you touched on fuel recapture.

Right now that doesn't seem to be much of an adjustment on the capacity side from some of your indices participants despite like erratic Sheila So just trying to understand if there's a new calculus to higher approaching fuel recapture right now in the current market. Thank you.

Glen Hauenstein: So I think we're seeing that continuing into the fall and early parts of winter. And we're very excited about that. And we've also of course expanded into a lot more Latin measure this winter than we did last year. Last winter and the events demand for that seems very, very robust. So, leisure is still very strong. And even through shoulder and off peak periods. Okay. Thanks, line. Thanks, everybody. Take care. Thank you.

Well, yes.

Speaker 3: Well, obviously if you'll move an awful lot within just the last couple of months.

Obviously fuel moved an awful lot.

Interest for the last couple of months.

Speaker 3: It's the volatility of fuel that really hits us hard as compared to the ability to recapture it. I think traditional.

The volatility of fuel that really hits us hard as compared to the ability to recapture it.

I think traditionally we've seen over.

Speaker 3: two to three quarter rise. We have a pretty good success rate at recapturing it. And when you think about the strength of the demand environment and the fact that across the board, everyone's not just fuel costs are up, but labor rates are increasing and other inflationary pressure supply chain. It maintenance costs are up. Everyone has a similar incentive to continue to be able to recalibrate those prices.

Two to three quarter.

<unk>, we have a pretty good success rate at.

Recapturing it and when you think about the strength of the demand environment.

Salvi Sith: Your next question is coming from Salvi Sith from Raymond James. Your line is live. Hey, good morning. If I'm on Glenn, just your comment about domestic capacity being flat to down in the first quarter. I just wondering if that was a decent trend for the full year, or if it was related to also in a last year, the way first quarter turned out, wasn't what you expected. And you were going to make some capacity changes.

The fact that across the board everyone's not just fuel costs are up.

Labor rates are increasing and other inflationary pressure supply chain and maintenance costs are up everyone has a similar incentive to continue to be able to recalibrate those pricing that price that those market pressures into pricing. So.

Speaker 4: that bright that those market pressures in pricing. So, you know, my outlook is, I'm optimistic, as we're going into 24, Glent can add his own color there. No, I think you mentioned it really well. It takes time, and when we have rapid fuel price run ups, it usually takes a few quarters for that to roll into the industry realized fair. But historically, it's always work. So, you know, we're looking at history to predict the future, but that does. So, you know, we're looking at the future, but that does.

My outlook.

Salvi Sith: So is that related to that as well? Or is it more kind of weakness that you're seeing recently or maybe strengthen and then international on a relative basis? It's really a reshaping on the demand patterns that we saw last year. And no shock, January, February or not. In the northern tier trans, gone to east west markets, barn burner market. So reallocating those to warmer and center your places. So our total capacity will be up.

Outlook is I'm optimistic as we're going into 'twenty for Glenn.

Can add his own color there no I think you mentioned that really well it takes time and when we have rapid fuel price run ups. It usually takes a few quarters for that to roll into the industry realized fares.

Historically, it's always.

It's always work so we're looking at history to predict the future but.

That's what the history would tell you.

Speaker 8: Okay, appreciate that. And then Dan just back to the maintenance cost and operational investment, just trying to understand.

Salvi Sith: Domestic capacity will be down slightly. Cour hubs will actually be up with more emphasis on warm and sunny places in Latin America and South Pacific. So that's kind of how it was profiling and really optimization of the demand patterns we saw last year going into this winter. That makes sense and if I meant also on just on domestic, you know, revenue, you know, you've been stable at Delta since kind of June.

Okay I appreciate that and then.

Dan just back to the maintenance costs and operational investments just trying to understand.

Speaker 8: I know you touched on an in Jamie's question, but just trying to understand how it plays out. Are you basically assuming that maintenance and operational investments will be elevated in the first path? And then how does that roll off? And then when do the productivity gains that you've talked about in the past kind of kick in? I just trying to understand how that out, the moving parts are changing a little bit.

I know you touched on and Jamie's question, but just trying to understand how it plays out are you basically assuming that maintenance and operational investments will be elevated in the first half and then how does that roll off and then when did the productivity gains that you've talked about in the past kind of kick in and I'm just trying to understand how that all the moving parts are changing a little bit right. Thank you.

Speaker 5: Thank you. Yeah, so we talked about it. We're in the middle of Connor. Thank you. We're in the middle of the 24 planning process.

Salvi Sith: I was wondering how much of a contribution you're getting from, you know, restoring your hub and separately, perhaps, you know, the domestic portion of international trips, even what you've talked about. The strength kind of continuing and transatlantic longer than kind of historic. The reason I asked it, it seems that stable comment is a little bit different than maybe what we're hearing from some kind of the purely domestic airlines. Right, right. I think what domestic strength is really coming from are the premium products domestically.

So when we talk about it we're in the we're in the middle of kind of where we're in the middle of the 24 planning process.

Speaker 5: You think about maintenance, as Ed talked about, is a foundational item as it relates to our operational reliability and investments that we're making here related to.

When you think about maintenance as Ed talked about it as a foundational item.

It relates to our operational reliability and that the investments that we're making here were related to fleet health and the work that we're doing on our engines, we're going to stay after here and that will be with us.

Speaker 5: and the work that we're doing on our engines, we're gonna stay after here. And that will be with us at least into the first half of next year. And we wanna drive that operational reliability.

East into the first half of next year, and we want to drive that operational reliability. The second part of that is as you get that operational reliability that is really what creates the foundation to be able to start to optimize and unlock the cost investment and inefficiencies that we talked back about at Investor day that $1 billion plus and <unk>.

Speaker 5: The second part of that is, as you get that operation or liability, that is really what creates the foundation to be...

Salvi Sith: And, you know, I'm not going to speak for the other carriers, they all have coming in the next few weeks, but it really hasn't been on domestic portion of international journey, which is diminimus in terms of the variance to what it was last year, you know, our, our implements to in the transatlantic are up low double digits, but that only represents 13% of our total travel, so really a diminimus impact to domestic. So it's really coming from the premium products and they're doing quite well, as I mentioned, domestic first, what paid first class load factors are reaching new heights every month. So very excited about those demand trends. And I think that reinforces the strategy we've been working on for the last 10 years to have a differentiated product. Oh, well, thank you. Thank you.

Speaker 5: start to optimize and unlock the cost investment in inefficiencies that we talked back about at Investor Day, that billion dollars plus. And as you see that operational liability continue to improve, our teams will be able to lean more and more into.

As you see that operational reliability continue to improve our teams will be able to lean more and more into and to getting those investment buffers out those inefficiencies that are in every part of our operation.

Speaker 5: And to getting those investment buffers out, those inefficiencies that are in every...

Speaker 5: part of our operation and our teams are working through that as they're building out their operating plan and financial plan for 2024.

Our teams are working through that as they're building out their operating plan and financial plan for 2024.

Thank you.

Speaker 1: Thank you. Your next question is coming from Duane Feningworth from Evercore ISI. Your line is live.

Thank you. Your next question is coming from Duane <unk> from Evercore ISI. Your line is live.

Speaker 9: Hey, good morning, just on the maintenance investment I'll follow up to maybe Jamie's question there. Is this at all a reflection of your thoughts on future aircraft delivery constraints? In other words, were you always thinking about using those 7.5s next year? And then just generally, how do you think about and measure returns on capital for investing in something like 7.5, 7 versus going out and buying new?

Hey, good morning, just on the maintenance investment I'll follow up to maybe Jamie's question there.

Connor Cunningham: Your next question is coming from Connor Cuttingham, Melius research, your line is live. Everyone, thank you. Ed, in the prepared remarks, I think you touched on field recapture. You know, right now that doesn't seem to be much of an adjustment on the capacity side from some of your industry participants, despite like a radic field. So just trying to understand that there's a new calculus to how you're approaching field recapture right now in the current market.

Is this at all a reflection of.

Your thoughts on future aircraft delivery constraints in other words.

You're always thinking about using those 75 next year.

And then just generally how do you think about and measure returns on capital for investing in something like 757 versus going out and buying new.

Yes.

Speaker 5: Glank and chime in here too. You know, I think the 757 has been a fleet as we've gone through our restoration that we've characterized as a flexible fleet. And it's one that it's certainly a workhorse.

Glen can chime in here too I think the 757 has been a fleet as we've gone through our restoration that we'd characterize as a flexible fleet and it's one that it's certainly a workhorse.

Connor Cunningham: Thank you. Well, obviously, if you'll move an awful lot within just the last couple of months, and it's the volatility of fuel that really hits us hard as compared to the ability to recapture it. I think traditionally, we've seen over a two to three quarter rise. We have a pretty good success rate at recapturing it. And when you think about the strength of the demand environment and the fact that across the board, everyone's not just fuel costs are up.

Speaker 5: The returns are very good related to how we deploy it and fly it within our network. We have leaned on it. When you think back of where we might have been 18, 24 months ago, the number that we've had activated more

The returns are very good related to how we deployed and fly it within our network. So we have leaned on it when you think back of where we might've been 18 to 24 months ago. The number that we apply and we have reactivated more as we continue to see new delivery slide and we get recalibrated year to year. So it is one that we blend.

Speaker 5: as we continue to see new delivery slide and we have recalibrated year to year, so it is one that we've leaned into and it's one that we will.

And it's one that we will.

Speaker 5: You know, we'll be flexible on as we work through the next three, four, five years in regards to how we deploy it.

Connor Cunningham: Labor rates are increasing and other inflationary pressure supply chain and maintenance costs are up. Everyone has a similar incentive to continue to be able to recalibrate those pricing that bright that those market pressures and pricing. So, you know, my outlook is optimistic as we're going into 24. Glenn can add his own color there. No, I think you mentioned it really well. It takes time. And when we have rapid fuel price run ups, it usually takes a few quarters for that to roll into the industry realized fair. But historically, it's always work. So, we're looking at history to predict the future. That's what the history would tell you.

We will be flexible on as we work through the next 345 years in regards to how we deploy it.

Speaker 5: the wave of overhalls that we started last year and we're doing this in, we'll have.

Connor Cunningham: Okay, appreciate that.

The wave of overhauls that we started last year and we're doing this year and we'll have more.

Speaker 5: next year, that gets us through a heavy wave that then allows us really very viable engines that the Delta team has always been very good at managing the angel and the life of an asset we did it on.

<unk> next year, but that gets us through way heavy wave that then allows us really very viable engines that.

The Delta team has always been very good at managing the NGL end of life of an asset we did it on it.

Speaker 5: 90s, 88s in regards to how you manage those assets and deploy them but also get the most out of them, whether it's in hole or in the parts and how they're redeployed back in the stream. We are always working closely then with fleet and maintenance with Glensteam on how to deploy them and get the best returns for them. But those are good returning. It's a great workhorse for our fleet with good return.

90, <unk> 88 in regards to how you manage that those those assets and deploy them, but also get the most out of them.

Whether it's in whole or in the parts and how the road redeploy back into the stream and we are always working closely then with fleet and maintenance with glenn's team on how to deploy them and get the best returns for them, but those are good returning.

Dan Janki: And then Dan, just back to the, to the maintenance cost and operational investment, just trying to understand. I know you touched on it and Jamie's question, but just trying to understand how it plays out. Are you basically assuming that maintenance and operational investments will be elevated in the first path? And then how does that roll off? And then when do the productivity gains that you've talked about in the past kind of kick in?

It's a great workhorse of our fleet with good good returns.

Speaker 4: Nothing to add other than, yeah, we took a lot of lake deliveries, I think our last 7-5 was produced, we had the last one ever built. So some of these planes are not that old and we have them in our fleet and we have, but as you said, as we get to the end of life of these toward the end of this decade, we'll be able to really start harvesting the engines, which will really improve the maintenance profile.

To add other than we took a lot of late deliveries I think our last seven five was produced the last one ever built and so some of these plans are not that old and we have them in our fleet and we have but as you said as we get to the end of life of these towards the end of this decade will be able to really start harvesting the engines, which will really improve the maintenance.

Dan Janki: I'm just trying to understand how that out the moving parts are changing a little bit right now. Thank you. Yeah, so we talked about it. We're in the, we're in the middle of Conor. Thank you. We're in the middle of the 24 planning process. You think about maintenance, as I talked about, it is a foundational item as it relates to our operational reliability and the investments that we're making here. We're related to fleet help and the work that we're doing on our engines.

While its fleet.

Speaker 3: And doing this is that if I could add my perspective, your point is right, it is related to the OEMs fundamentally. Their inability to produce engines on time, which they're having their own challenges within the supply chain as well as parts on.

And Duane this is Ed if I could add my perspective.

Your point is right. It is related to the Oems fundamentally their inability to produce engines on time, which they are having their own challenges within the supply chain as well as parts on time and the one thing that has been a core part of delta strength over at <unk>.

Speaker 3: And the one thing that has been a core part of Delta Strength over at Tech Hobbes is our ability to go into the used repair market and acquire assets and and repurpose them towards our own need.

Dan Janki: We're going to stay after here. And that will be with us at least into the first half of next year. And, we want to drive that operational reliability. The second part of that is, as you get that operational reliability, that is really what creates the foundation to be able to start to optimize and unlock the cost, investment and inefficiencies that we talked back about at investor day, that billion dollars plus. And as you see that operational reliability continue to improve our teams will be able to lean more and more into, into getting those investment buffers out those inefficiencies that are in every part of our operation. And our teams are working through that as they're building out their operating plan and financial plan for 2024.

Dan Janki: Thank you.

<unk> is our ability to.

Go into the used repair market and acquire assets.

And repurpose them towards our own needs.

Speaker 3: That market has largely dried up, given all the large rebound in flight activity, which was, was,

That market is largely dried up given all the large rebound in flight activity, which was <unk>.

Speaker 3: running at the same time the OEMs have been having and struggling to produce new

Running at the same time, the Oems have been having and struggling to produce new.

Speaker 3: So I think this is something you're going to see across the industry. This is in Chustet Delta. And it's one of the constraints we talked about in yesterday. It's going to keep us all pretty limited in the amount of capacity that we can produce. But I put my money on the Delta Tech Oxtune because they're the best in the business. And we'll figure this out. And we know this is a while it may hit the expense line. We know this is a long-term asset that's going to pay dividends for you.

So I think this is something youre going to see across the industry. This isn't just at Delta.

And it's one of the constraints, we talked about at Investor day, it's going to keep us all pretty limited in the amount of capacity that we can produce.

But I put my money on the Delta Tech ops team as they are the best in the business and we will figure this out and we know this is a while it may hit the expense line. We know this is a long term asset thats going to pay dividends for years to come.

Duane Pfennigwerth: Your next question is coming from Dwayne Feningworth from Evercore ISI. Your line is live. Hey, good morning. Just on the maintenance investment. I'll follow up to maybe Jamie's question there. Is this at all a reflection of, you know, your thoughts on future aircraft delivery constraints? In other words, were you always thinking about using those 75s next year?

Speaker 9: appreciate those thoughts and maybe just for my follow-up on on Pacific and and glad you just remind us where we are in China reopen i think there's another you know round of expansion here in November and then just broadly in Pacific you know what are the markets away from China that you're you're excited about

I appreciate those thoughts and maybe maybe just for my follow up on on Pacific and Glenn can you just remind us where we are in China reopen I think there is another round of expansion here in November and then just broadly and Pacific what are the markets away from China that Youre excited about.

Dan Janki: And then just generally, how do you think about and measure returns on capital for investing in something like 757 versus, you know, going out and buying new? Yeah, Glenn can chime in here too. You know, I think the 757 has been a fleet as we've gone through our restoration that we've, we've characterized as a flexible fleet. And it's one that it's certainly a workhorse. The returns are very good related to how we deployed and, and fly it within our network.

Well I think what we're very excited about is the success of our Incheon hub with Korean and that is really even exceeded our expectations. We think it's the best place to connect to get the southeast Asia from any one of our hubs or as a double connect so really trying to leverage that and we'll have some announcements on continuing to.

Speaker 4: Well, I think what we're very excited about is the success of our Incheon hop with Korean. And that has really even exceeded our expectations. We think it's the best place to connect to get the Southeast Asia from any one of our hubs or as a double connect. So really trying to leverage that and we'll have some announcements on continuing to work to increase our capacity next year. But that's really been a linchpin. And South Pacific has been a really great.

Work to increase our capacity next year, but that's really been a lynchpin south Pacific has been a really great.

Speaker 4: surprise for us, the demand there really in tune with that same high demand for leisure destinations. So that's been doing very well as well as Japan. As you know, Japan was close for a couple years and our Japanese franchise is doing quite well. So you put the Pacific together and if you recall for years we were telling our investors to hold on. We've got this restructuring coming. We had the wrong airplanes. We were at the wrong airports.

Dan Janki: So we have leaned on it, you know, when you think back of where we might have been 18, 24 months ago, the number that we're flying, we have reactivated more as we continue to see new delivery slide. And we have recalibrated year to year so it is one that we've leaned into. And it's one that we will, you know, will be flexible on as we work through the next three, four or five years in regards to how we deploy it.

Price growth the demand really in tune with that same high demand for leisure destinations.

So that's been doing very well as well as Japan as you know Japan was closed for a couple of years in our Japanese franchise is doing quite well. So you put the Pacific together.

If you recall for years, we were telling our investors to hold on and we've got this restructuring coming we had the wrong airplanes, we've led the wrong airports.

Dan Janki: The wave of overholes that we started last year and we're doing this year and we'll have the same next year, but that gets us through a heavy wave that then allows us really very viable engines that, you know, the Delta team has always been very good at managing the angel and the life of an asset we did it on. 90s, 88s in regards to how you manage those assets and deploy them but also get the most out of them, whether it's in hole or in the parts and how they're redeployed back in the stream.

Speaker 4: It took us many years to get to where we wanted to be, but we're finally there and we're producing great returns in the Pacific and we're excited about our opportunities moving forward.

Took us many years to get to where we want it to be but we are finally, there and we're producing great returns in the Pacific We're excited about our opportunities moving forward.

I appreciate the detailed thoughts.

Speaker 4: Oh, China, I didn't say China, of course. We went from essentially double daily in Detroit, double weekly, I'm sorry, in Detroit and Seattle, to 10X a week with Seattle moving to daily and Detroit moving to...

China, I Didnt say China of course.

We went from essentially double daily in Detroit Double weekly I'm, sorry on Detroit, and Seattle to Pemex, a week with Seattle moving to daily in Detroit moving too.

<unk> so.

And we will see.

Speaker 4: If there's another wave of this, I think the first thing we have to see is is there a demand for the capacity that's going into market?

If there is another wave of this I think the first thing we have to see us as their demand for the capacity that's going into market right now.

Dan Janki: And we are always working closely then with fleet and maintenance with Glen's team on how to deploy them and get the best returns for them. But those are good returning. It's a great workhorse for our fleet with good returns.

Speaker 10: We'll keep you abreast of that as we report on China Rio.

We'll keep you abreast of that as we move forward on on China reopening.

Thank you.

Glen Hauenstein: Nothing to add other than we took a lot of lead deliveries. I think our last 75 was produced. We have the last one ever built. So some of these planes are not that old and we have them in our fleet and we have. But as you said, as we get to the end of life of these toward the end of this decade, we'll be able to really start harvesting the engines, which will really improve the maintenance profile of fleet.

Thank you. Your next question is coming from Andrew <unk> from Bank of America. Your line is live.

Speaker 1: Thank you. Your next question is coming from Andrew Tidora from Bank of America. Your line is live.

Speaker 9: Hi, good morning, everyone. A couple questions just want to bring it back to some things discussed that investor day. I guess maybe first, just on capacity growth. I know you gave us a little color about how you're thinking about one Q, domestic versus international. But the mid-single-digit growth that you talked about in 2024, I guess in this fuel environment, would you consider that growth rate as reasonable or aspirational at this point in time?

Hi, good morning, everyone.

Couple of questions, just kind of want to bring it back to some things discussed at Investor Day, I guess, maybe first just on capacity growth I know you gave us a little color about how youre thinking about <unk> kind of domestic versus international but the mid single digit growth that you talked about in 2024.

Dan Janki: And doing this is that if I could add my perspective, your point is right. It is related to the OEMs fundamentally. Their inability to produce engines on time, which they're having their own challenges within the supply chain as well as parts on time. And the one thing that has been a core part of delta strength over at TechCops is our ability to go into the used repair market and acquire assets and repurpose them towards our own needs.

In this fuel environment would you consider that growth rate is reasonable our aspirational at this point in time.

Speaker 3: Well, I'd probably more a question for Glenn than myself, but at my level, as I just said in my last comment,

Well, it's probably more of a question for Glen.

Them myself, but.

And my level as I've, just said in my last comments.

Speaker 3: I hear my sense would be any capacity that you hear from us in terms of plans or the industry, you should read as somewhat aspirational because there are still large, tremendous constraints in the marketplace in terms of delivering that.

Hi.

My sense would be any capacity.

You'll hear from us in terms of plans or the industry you should read as somewhat aspirational because theres still are tremendous constraints in the marketplace in terms of delivering that growth.

Dan Janki: That market has largely dried up, given all the large rebound in flight activity, which was running at the same time the OEMs have been having and struggling to produce new. So I think this is something you're going to see across the industry. This isn't just at delta. And it's one of the constraints we talked about it yesterday. It's going to keep us all pretty limited in the amount of capacity that we can produce.

Speaker 3: You know, if all goes well and we get all the parts and we get the planes on time and we have the labor ready and ATC is not an issue and fuel prices stay reasonable. Yeah, that's what's gonna happen If you look over the last two to three years We continue to evolve it. So those those are just points in time estimates as to what we could do as to what we actually will be able to do I think we'll probably across support be a little less

If all goes well and we get all the parts and we get the planes on time and we have the labor ready and ATC is not an issue in fuel prices stay reasonable, yes, thats whats going to happen but.

If you look over the last two to three years.

We continue to evolve it so those those are just <unk>.

So in time estimates as to what we could do as to what we actually will be able to do I think we'll probably across the board to be a little less than that.

Dan Janki: But I put my money on the delta tech ought to be there the best in the business and we'll figure this out. And we know this is a while. It may hit the expense line. We know this is a long term asset that's going to pay dividends for years to come.

Speaker 10: And I would just add a comment about half of that is run rate of what's in there as we enter the first quarter of next year. So the real number is half of low single digits, which is very low single.

And I would just add a comment about half of that is run rate of what's in there as we enter the first quarter of next year. So.

The real number is half of low single digits, which is very low single digits.

Yeah got it makes sense and then I guess, Dan just on costs and CASM next year, obviously with capacity moving around obviously, the maintenance maintenance cost continuing into next year kind of just give us a sense of your level of confidence in 2020 for CASM X being able to be down kind of low single digits.

Speaker 11: Got it, makes sense. And then I guess Dan just on, cause and chasm next year, obviously, with capacity moving around, obviously the maintenance costs continuing into next year. Gotta just give us a sense of your level of confidence in 2024, chasm X, being able to be down kind of low single digits, or should we think about that differently as well? Thank you.

Glen Hauenstein: I appreciate those thoughts and maybe just for my follow up on on Pacific and Glenn, can you just remind us where we are in China reopen? I think there's another round of expansion here in November. And then just broadly in Pacific, what are the markets away from China that you're excited about? Well, I think what we're very excited about is the success of our Inshan Hop with Korean. And that has really even exceeded our expectations.

Should we think about that differently as well thank you.

Speaker 5: As I mentioned earlier, we're still in the middle of our planning process. So all these pieces are coming together, right? Capacity, along with all the things that we've talked about regarding the maintenance, we're spending a lot more time on that, given all the moving pieces in the industry and elements that we talked about.

As I mentioned earlier, we're still in the middle of our planning process. So all of these pieces are coming together right capacity along with all the things that we've talked about regarding the maintenance we're spending a lot more time on that given all the moving pieces in the industry and elements that we talked about.

Glen Hauenstein: We think it's the best place to connect to get the Southeast Asia from any one of our hubs or as a double connect. So really trying to leverage that and we'll have some announcements on continuing to work to increase our capacity next year. But that's really been a linchpin. South Pacific has been a really great surprise for us. The demand there really in tune with that same high demand for leisure destinations.

Speaker 3: Yeah, Thames comments earlier about this is going to be a pivot to optimization as a big deal and maintenance is a part of that maintenance on blocks of the ability to drive the efficiencies across the enterprise and we're in the middle of the planning process so we're not trying to dodge this question. We will give you at the typical time at the start of the year what we think we can do.

Yes, Dan comments earlier about this is going to be a pivot to optimization is a big deal and maintenance as a part of that maintenance on blocks.

Glen Hauenstein: So that's been doing very well as well as Japan. As you know, Japan was close for a couple years and our Japanese franchise is doing quite well. So you put the Pacific together. And if you recall, for years, we were telling our investors to hold on. We've got this restructuring coming. We had the wrong airplanes. We were at the wrong airports and it took us many years to get to where we wanted to be.

The ability to drive the efficiencies across the enterprise and we're right in the middle of the planning process. So we're not trying to Dodge your question.

We'll give you.

The typical time at the start of the year, what we think we can do.

Understood. Thank you.

Speaker 1: Thank you. Your next question is coming from Catherine O'Brien from Goldman Sachs. Your line is live.

Thank you. Your next question is coming from Catherine O'brien from Goldman Sachs. Your line is live.

Good morning, everyone and thanks for the time.

Speaker 12: Ed, on CMBC this morning you caught out a pickup in corporate bookings. Could we just dig into that a little bit more? You know, what have you seen since Labor Day on Lyam or revenue from corporate? You know, any industries or regions that are bigger drivers which really cross the board?

Add on CNBC. This morning, you called out a pickup in corporate bookings could we just dig into that a little bit more what are you guys seeing some since labor day on volumes or revenue from corporate.

Glen Hauenstein: But we're finally there and we're producing great returns on the Pacific and we're excited about our opportunities, moving forward. I appreciate the detailed toss. Oh, China, I didn't say China, of course. We went from essentially double daily in Detroit, double weekly, I'm sorry, in Detroit and Seattle to 10X a week with Seattle moving to daily and Detroit moving to 3X. So, and we'll see if there's another wave of this, I think the first thing we have to see is, is there demand for the capacity that's going into market right now and we'll keep you abreast of that as we move forward on China. We open it. Thank you.

The regions that are bigger drivers, which really across the board.

Speaker 12: and anything I may be just corporate booking windows.

And anything on maybe just corporate booking windows.

Speaker 3: today versus maybe a couple of months ago and they're still longer than pre-COVID. Appreciate it. Well, we we we we set on the last call that we anticipated for a play earlier that we'd see by him.

Today versus maybe a couple of months ago, and theyre still longer than pre Covid I appreciate it.

We said on the last call that we anticipated post labor day that we'd see volumes of corporate travel pickup and indeed, we are seeing that I think Glenn mentioned, a couple of sectors. The tech sector and the financial services sector as areas that we're.

Speaker 3: of corporate travel pick up and indeed we're seeing that I think Len mentioned.

Speaker 3: a couple of sectors, the tax factor and the financial services sector is areas that we're seeing double digits.

We're seeing double digit growth.

Speaker 3: We have, I'd say across the board, we're seeing increases. And, you know, it's, you know, the corporate travel has just come back. It comes back and then Plateaus come back and Plateaus. And I think you'll see another, another wave of return. I think a lot of it's being driven by the return to office and getting into the new normal work patterns, which many companies are still.

We have I'd say across the board, we're seeing increases in.

Andrew Didora: Your next question is coming from Andrew Didora from Bank of America. Your line is live. Hi, good morning, everyone.

It's corporate travel as it's come back it comes back and then plateaus comeback and plateaus and I think youll see another another wave of return.

Ed Bastian: Ed, a couple questions just kind of want to bring it back to some things discussed that investor day. I guess maybe first, just on capacity growth, I know you gave us a little color about how you're thinking about one Q kind of domestic versus international, but the mid-single-digit growth that you talked about in 2024, I guess in this fuel environment, would you consider that growth rate as reasonable or aspirational at this point in time?

I think a lot of it's being driven by the return to office and getting into the new normal work patterns, which many companies are still sorting out for themselves, but it's healthy to see and it's one of the distinguishing factors between us and them.

Speaker 3: sorting out for themselves, but it's healthy to see and it's one of the distinguishing factors between us and Some of the carriers that are on the other end of the first

Some of the carriers that R&D other end of the affair spectrum.

Speaker 3: So one of the many differentiating factors that is enabling us to grow revenues to pay S.W.I.R.A.

So one of the many differentiating factors that.

Ed Bastian: Well, I probably more a question for Glenn than myself, but at my level, as I just said in my last comments, my sense would be any capacity that you hear from us in terms of plans or the industry, you should read as somewhat aspirational because there still are tremendous constraints in the marketplace in terms of delivering that growth. If all goes well and we get all the parts and we get the planes on time and we have the labor ready and ATC is not an issue and fuel prices stay reasonable, yeah, that's what's going to happen.

Is enabling us to grow revenues the pace we want.

Thank you Jonathan Thanks, So much and then one maybe this is for Dan can you just speak to how the air traffic liability is trending year to date and into the fourth fourth quarter versus your expectations at the start of the year I know, we kicked off the year with really strong first quarter performance on that ECL build.

Speaker 12: Maybe this is for Dan. Can you just speak to how the air traffic liability is trending year to date into the fourth quarter versus your expectations at the start of the year? I know we kicked off the year with really strong first quarter performance on that ETL build. Should be aware of any impact from normalization of booking windows versus last year just given the pickup and corporate volume you're seeing.

You'll be aware of any impact from normalization of booking windows.

Versus last year, just given the pickup in corporate volume you're seeing thanks a lot.

Speaker 5: No, I'd say it's performing as we expected. We're starting to maybe get back to a little bit more of the traditional seasonality, as we were restoring it was a little bit different. And if you look at historical patterns, you're only down mid-teens as you go through into the fourth quarter, and that's kind of what we saw as we wrapped up.

No I'd say, it's performing as we expected.

Ed Bastian: But if you look over the last two to three years, we continue to evolve it. So those are just points in time estimates as to what we could do, as to what we actually will be able to do, I think will probably across support be a little less than that. And I would just add a comment, about half of that is run rate of what's in there as we enter the first quarter of next year. So the real number is half of low single digits, which is very low single digits. Yeah, it makes sense.

We're starting to maybe get back to a little bit more of the traditional seasonality.

We were restoring it was a little bit different and if you look at historical patterns. You are only down mid teens as you go through into the fourth quarter and Thats kind of what we saw as we wrapped up.

Speaker 5: the third quarter here. And so, no, the other element that you have in there, is you certainly have, we've had very friendly policies as it relates to credits and customers have gotten really used to using them. And we think that's obviously long-term beneficial that people have confidence to book and travel, but also consume when they don't travel. And, you know, those we've seen very consistent issuance in usage rate on them. Are

The third quarter here and.

So now the other element that you have in there is you certainly have we've had very friendly policies as it relates to credits and customers have gotten really used to using them and we think that's all obviously long term beneficial that people have confidence to book.

Dan Janki: And then I guess, Dan just on cost end, chasm next year, obviously, yeah, with capacity moving around, obviously, the maintenance cost continuing into next year. Kind of just give us a sense of your level of confidence in 2024, chasm X, being able to be down kind of low single digits or should we think about that differently as well? Thank you. As I mentioned earlier, we're still in the middle of our planning process.

And travel, but also consume when they don't travel and.

Those those we've seen very consistent issuance and usage rates on them.

Okay. Thank you so much.

Thank you. Your next question is coming from Michael Lindenberg from Deutsche Bank. Your line is live.

Speaker 1: Thank you. Your next question is coming from Mike Lindenberg from Deutsche Bank. Your line is live.

Dan Janki: So all these pieces are coming together, right? Capacity, along with all the things that we've talked about regarding the maintenance for spending a lot more time on that, given all the moving pieces in the industry and elements that we talked about. Yeah, Dan's comments earlier about this is going to be a pivot optimization as a big deal. And maintenance is a part of that maintenance on blocks of the ability to drive the efficiencies across the enterprise.

Speaker 13: oh yeah hey um... good morning with everyone glen you you called out uh... a couple sectors that were underperforming from a corporate perspective i mean i think of any care you're probably the most indexed to the automotive sector and sort of the media sector with the writers and actors uh... strike what what sort of drag do you actually think that had on on your corporate at least in you know the month of September and maybe what you're seeing right now

Yeah, Hey, good morning, everyone, Glenn you've called out.

A couple of factors that were underperforming from a corporate perspective, I mean, I think of any carrier probably the most indexed to the automotive sector, and then sort of the media sector with the writers.

Actors strike.

Drag do you actually think that had on on your corporate at least.

The month of September and maybe what Youre seeing right now.

Dan Janki: And we're rating the middle of the planning process. So we're not trying to dodge the question. Yeah, we will give you, yeah, at the typical time at the start of the year, what we think we can do. Understood. Thank you.

Well clearly I will start with Los Angeles, and the entertainment production strikes that are ongoing.

Speaker 4: Well, clearly I'll start with Los Angeles and the entertainment production strikes are ongoing.

Speaker 3: that it's had a not insignificant change in the business travel to and from Los Angeles. As well as now the UAW strike, which is curtailed a significant amount of the business in Detroit as you point out, we're very big in both of those sectors. And what I'm really encouraged about is, despite those two kind of being things that we should look forward to as positive next year, that our total corporate revenues are still accelerating.

That has had a not insignificant change in the business travel to and from Los Angeles.

Catherine O'brien: Your next question is coming from Catherine O'Brien from Goldman Sachs. Your line is live.

As well as now the UAW strike, which has curtailed a significant amount of the business and Detroit and as you pointed out we're very big in both of those sectors and what I'm really encouraged about.

Catherine O'brien: Good morning, everyone. Thanks for the time. Ed, on CMBC this morning, you caught out a pickup in corporate bookings. Could we just dig into that a little bit more? What have you seen since Labor Day on volumes or revenues from corporate? Any industries or regions that are bigger drivers which really cross the board and anything on maybe just corporate bookings? And when knows today versus maybe a couple months ago and they're still longer than pre-COVID appreciated?

Right those two kind of being things that we should look forward to as positives next year that our total corporate revenues are still accelerating so just.

Speaker 4: So despite those two being a drag on them, and I think hopefully those are both resolved fairly quickly here and we can get back to a normal business level, but you are right spot on that we are probably the most impacted by those two seconds.

Despite those two being a drag on them and I think hopefully those are both resolved fairly quickly here and we can get back to our normal business level, but you are right spot on that we are probably the most impacted by those two sectors.

Catherine O'brien: Well, we set on the last call that we anticipated both Labor Day that we'd see volumes of corporate travel pickup. Indeed, we're seeing that. I think Glenn mentioned a couple of sectors, the tech sector and the financial services sector is areas that we're seeing double-digit growth. We have, I'd say across the board, we're seeing increases and it's corporate travel, as it's come back, it comes back and then plateaus, come back and plateaus.

Speaker 3: great and then just a quick one to Dan or add um i didn't see in the release a re iteration of the seven dollars plus for twenty twenty four i know you're still mid-budget but just based on the trajectory and everything you're seeing now that number still fine that's our that's our plan mike is like i mentioned that uh... we gave that uh... that that guide in uh... December of 2021 w

Great and then just a quick one Dan or.

In the release, a reiteration of the $7 plus for 2024 I know you are still mid <unk>.

Based on the trajectory and everything Youre seeing now.

Number is still fine.

That's our plan, Mike as I mentioned that.

So we gave that.

That guide in December of 2021.

As long as free cash and others and we're on track.

Catherine O'brien: And I think you'll see another way of return. I think a lot of it's being driven by the return to office and getting into the new normal work patterns, which many companies are still sorting out for themselves. But it's healthy to see and it's one of the distinguishing factors between us and some of the carriers that are on the other end of the fair spectrum. So one of the many differentiating factors that is enabling us to grow revenues the pace we are. Thanks a lot of sense. Thanks so much.

Very good thank you.

Speaker 1: Thank you. Your next question is coming from Ravi Shankar from Morgan Stanley . Your line is live.

Thank you. Your next question is coming from Ravi Shanker from Morgan Stanley . Your line is live.

Speaker 14: Thanks, morning everyone. Glenn, I'm probably going to ask Jamie's initial skymiles data mining question in a different way. Kind of based on data that you have.

Thanks, Good morning, everyone.

So I'm going to ask Jamie as initial sky miles of data mining question in different way.

Based on data that you have.

Speaker 14: do you have any evidence that traditional domestic travelers have been flying internationally more often in 2023 and maybe people think their first or kind of rare international trips to try to see if there's any truth or data to back up the thesis that there has been substitution of domestic with people flying internationally this year.

Do you have any evidence that traditional domestic travelers have been flying internationally more often in 2023 and maybe be breathing. Therefore, historically for rare internationally, perhaps just trying to see if there's any truth or data to back up the thesis that there has been a substitution of domestic with people flying if not this year.

Catherine O'brien: And then one, maybe this is for Dan, can you just speak to how the air traffic liability is trending here today into the fourth quarter versus your expectations at the start of the year? I know we kicked off the year with really strong first quarter performance on that ETL build. Should be aware of any impact from normalization of booking windows versus last year just given the pickup and corporate volume you're seeing.

Well I would say that's a very broad question and clearly there has been an expansion of international but if you think about domestic.

Speaker 4: Well, I'd say that's a very broad question, and clearly there's been an expansion of international, but if you think about domestic...

Speaker 10: and the volume differential between the number of seats we have every day domestically and the number of seats we have every day to Europe , it would be very hard to track those incremental visits back to people who did not fly domestically because it's such a small piece of domestic travel in terms of total volumes. And so, while clearly the spend has been very robust for a long haul in general, we have not seen a diminishing of short haul.

And the volume differential between the number of seats, we have everyday domestically and the number of seats, we have everyday to Europe . It would be very hard to track those incremental visits back to people, who did not fly domestically because it's such a small piece of domestic travel in terms of total volumes and so.

Catherine O'brien: Thanks a lot. No, I'd say it's performing as we expected. You know, we're starting to maybe get back to a little bit more of the traditional seasonality as we were restoring it was a little bit different. And if you look at historical patterns, you're only down mid-teens as you go through into the fourth quarter and that's kind of what we saw as we wrapped up the third quarter here. And so no, the other element that you have in there is you certainly have, we've had very friendly policies as it relates to credits and customers have gotten really used to using them.

Clearly the spend has been very robust for a long haul in general we have not seen a diminishing of short haul leisure.

Speaker 14: Got it, that's really helpful. And we will follow up kind of, you know, feels like Trans-Pacific has not quite been the explosion of pent-up demand that we saw in domestic and transatlantic when they initially opened.

Got it that's really helpful and maybe as a follow up kind of feels like trend specific has not quite been the explosion of pent up demand that we saw in domestic unfunded liability. They initially opened.

Catherine O'brien: And we think that's obviously long-term beneficial that people have confidence to book and travel but also consume when they don't travel. And you know, those we've seen very consistent issuance usage rate on them. Thank you so much.

Speaker 14: But it looked like 2024 might be a better year for that. Is there any way you think that the historical profitability in that region, which has not been great to say the least, can be better when that initial kind of flow through of demand comes through with pricing the way it might potentially be?

But.

It looks like 2024 might be a better year for that is there any way you think that the historical profitability in that region, which has not been great to say the least can be better when that initial kind of flow through of demand come through but the pricing the way it might protect maybe.

Catherine O'brien: Thank you.

Mike Lindenberg: Your next question is coming from Mike Lindenberg from Deutsche Bank. Your line is lies. Oh, yeah, hey, good morning, everyone. Glenn, you called out a couple sectors that were underperforming from a corporate perspective. I mean, I think of any carrier, probably the most index to the automotive sector and then sort of the media sector with the writers and actors strike. What sort of drag do you actually think that had on your corporate, at least in, you know, the month of September and maybe what you're seeing right now?

Speaker 4: Well, I'd disagree with you on your premise there that Pacific has been a laggard. Pacific has been quite robust and I think we indicated these are our record profits in terms of margins and total profitability in the Pacific. And if you look at the Pacific, absent of China, it's been fully restored.

Well.

Disagree with you on your premise there that.

Pacific has been a laggard.

Pacific has been quite robust and I think we indicated these are on a record profits in terms of margins and total profitability in the Pacific and if you look at the Pacific absent of China.

It's been fully restored.

Speaker 4: So I think we're very pleased with the demand to the Pacific and we're right now, you know, that's where our capacity is sitting up most in the fourth quarter and where it will be in the first and through next year. And so, and we're very enthusiastic about the results we're getting there. Thank you.

I think we're very pleased with the demand to the Pacific and where we are right now.

Where our capacity is sitting up most in the fourth quarter and where it will be in the first and through next year and so we are very enthusiastic about the results we're getting there.

Mike Lindenberg: Well, clearly I'll start with Los Angeles and the entertainment production strikes that are ongoing, that it's had a not insignificant change in the business travel to and from Los Angeles, as well as now the UAW strike, which is curtail the significant amount of the business in Detroit as you point out we're very big in both of those sectors. And what I'm really encouraged about is despite those two kind of being things that we should look forward to as positive as next year.

Very helpful. Thanks, a lot.

Speaker 1: Thank you. Your next question is coming from Brandon, Oglinski, from Barclays. Your line is live.

Thank you. Your next question is coming from Brandon of Glinski from Barclays. Your line is live.

Speaker 3: Yeah, good morning, and thanks for taking my question. Glenn, I know you've called out your corporate travel here being up in Coulseville hub strings, but can you talk to maybe any areas of weakness domestically? And is there diverging trends with your main cabin revenue?

Yes, good morning, and thanks for taking my question.

Glenn I know you've called out your corporate travel here being up and coastal hubs strengths, but can you talk to maybe any areas of weakness domestically and is there like diverging trends with your main cabin revenue.

Mike Lindenberg: That are total corporate reviews are still accelerating. So despite those two being a drag on them, and I think hopefully those are both resolved fairly quickly here and we can get back to a normal business level, but you are right spot on that we are probably the most impacted by those two sectors.

Well I think we've called out diverging trends with main cabin those have been pretty consistent though.

Speaker 4: Well, I think we've called out diverging trends with main cabin. Those have been pretty consistent though, throughout the recovery is it's been led by premium products and services. So that's not inconsistent between quarters. I think it's actually relatively flat in terms of this.

Throughout the recovery has been led by our premium products and services so thats inconsistent.

System between quarters, I think it's actually relatively flat in terms of this.

Dan Janki: Great, and then just a quick one to Dan or Ed, I didn't see in the release a reiteration of the $7 plus for 2024. I know you're still mid budget, but just based on the trajectory and everything you're seeing now that number still fine. That's our plan. Like I mentioned that we gave that that that guide in December of 2021 on this free cash and others and we're on track. Very good.

Speaker 4: how much premium is driving there. And geographically, I think what we're really excited about is the coastal hub investments we've made. And particularly New York, that's something we're looking for in 24 weeks.

How much premium is driving there and geographically I think.

Dan Janki: Thank you.

We're really excited about is the coastal hub investments, we've made and particularly New York, That's something we're looking for in 'twenty four.

Speaker 4: We see a lot of momentum in the Northeast and New York, in particular, as things to look forward to in 2019.

We see a lot of momentum in the northeast in New York in particular as things to look forward to in 'twenty four.

Speaker 3: Okay, and then on the outlook for next year, growing with your JVs on the international side, how does the changes in Mexico impact this as they move to a category one?

Okay, and then on the outlook for next year growing with your JV is on the international side, how does the changes in Mexico impacted us as they move to a category one.

Robbie Shanker: Your next question is coming from Robbie Shanker from Morgan Stanley. Your line is live. Thanks, morning everyone. Glenn, I'm probably going to ask Jamie's initial sky mild data mining question in a different way. Based on data that you have, do you have any evidence that traditional domestic travelers have been flying internationally more often in 2023? And maybe be producing their first or kind of rare international trips to try to see if there's any truth or data to back up the pieces that there has been substitution of domestic with people flying internationally this year?

With the FAA.

Speaker 4: Right, Mexico has been a great source of strength for us through the last year, and we see continued strength in those Mexican business. And I think when you think about what we read in the press and what you all see and the on-shoring and moving factories from Asia down into Mexico, we've seen really an incredible strength in demand from the business sector in Mexico, and that's looking really robust into 2024.

Mexico has been a great song.

It's a strength for us through the last year and we see continued strength in those Mexican business and I think when you think about what we read in the press and where you all see in the onshoring and moving factories from Asia down into Mexico, We've seen really an incredible strength in demand from the business sector in Mexico and Thats.

Glen Hauenstein: Well, I'd say that's a very broad question and clearly there's been an expansion of international, but if you think about domestic and the volume differential between the number of seats we have every day domestically and the number of seats we have every day to Europe, it would be very hard to track those incremental visits back to people who did not fly domestically because it's such a small piece of domestic travel in terms of total volumes. And so while clearly the spend has been very robust for a long haul in general, we have not seen a diminishing of short haul leisure.

Really robust into 2024 and working with Aeromexico now, we really couldnt do much with them. These are the things we wanted to do in the past, but youll see us coordinating with them. We have hei joint venture. So we've been working very closely with them to continue to work on where we see strength in being able to serve those markets better.

Speaker 4: And working with Air Mexico now, we really couldn't do much with them. These are things we wanted to do in the past.

Included.

Speaker 4: The auto sector in Detroit and including Atlanta as a primary gateway to Mexico primary and secondary airport.

The auto sector in Detroit, and including Atlanta, as a primary gateway to Mexico primary and secondary airports.

Thank you.

Speaker 1: Thank you. Your next question is coming from Helen Becker from TD Cowan. Your line is live.

Thank you. Your next question is coming from Helen Becker from TD Cowen Your line is live.

Speaker 15: Thanks very much operator. Hi everybody and thank you very much for the question. Just on with with with respect to as you think about

Thanks, very much operator, hi, everybody and thank you very much for the question just.

On.

With respect to as you think about.

Glen Hauenstein: Got it, that's really helpful. And we will follow up kind of feel like trans specific has not quite been the explosion of pent up demand that we saw in domestic and transatlantic when they initially opened, but it looked like 24 might be a better year for that. Is there any way you think that the historical profitability in that region which has not been great to say the least can be better when that initial kind of flow through of demand comes through with pricing the way it might potentially be?

Travel next summer on the North Atlantic, especially where U S citizens, who are going to need visas how.

Speaker 15: acabal Nick Summer on The North Atlantic, especially, where US citizens are going.

Speaker 15: How are you thinking about communicating that to people as they both trips? Is that going to be in the reservation process or follow-ups or, you know, honey?

How are you thinking about communicating that.

Two people as Facebook trucks.

Is that going to be in the reservation process or follow ups or.

How do you avoid surprises.

Speaker 5: Helena and I, it's Peter Carter, say, we will make sure our customers are aware of the visa requirement at various points along the purchasing path and the journey. And I will tell you that the nice thing about the new visa requirement is it is of e visa. So it's a fairly straightforward process that we think will take about 24 hours.

Helane Hi, its Peter Carter.

We will.

We will make sure our customers are aware of the visa requirement at various points along the purchasing path in the journey and I will tell you that the nice thing about the <unk>.

Glen Hauenstein: Well, I disagree with you on your premise there that Pacific has been a laggard Pacific has been quite robust and I think we indicated these are our record profits in terms of margins and total profitability in the Pacific. And if you look at the Pacific absent of China, it's been fully restored. So I think we're very pleased with the demand to the Pacific and we're right now, you know, that's where capacity is sitting up most in the fourth quarter and where it will be in the first and through next year. And so and we're very enthusiastic about the results we're getting.

The new visa requirement is E visa so it's a fairly straightforward process that we think it will take about 24 hours.

Robbie Shanker: Thank you.

Speaker 15: Yeah, I think it's like Australia, right? Where it's pretty quick and less.

Yes, I think it's like Australia, right, where it's pretty quick unless it's not.

Speaker 15: I think, okay, that's helpful. Thank you. And then the other question I had was just on the changes to Israel. How big actually is that in your total market? It's a lot of ASMs, but it can't be that big in terms of...

Okay.

Okay. That's helpful. Thank you and then the other question I had was just.

On the changes to Israel.

Big actually is that in your total.

And in the total market, it's a lot of assets, but it can't be that big in terms of.

Brandon Oglenski: Your next question is coming from Brandon Oglenski from Barclays. Your line is live. Yeah, good morning, and thanks for taking my question.

I guess our exposure.

Speaker 4: It's a little over a point of azums, and we're not going to give an exact number, but it's included, the revenue hit is included in our fourth quarter.

It's a little over a point.

Glen Hauenstein: Glen, I know you've called out, you know, your corporate travel here being up and calls full hub strength, but can you talk to maybe any areas of weakness domestically, and is there like diverging trends with your main cabin revenue? Well, I think we've called out diverging trends with main cabin. Those have been pretty consistent, though, throughout the recovery is, it's been led by premium products and services, so that's not inconsistent between quarters. I think it's actually relatively flat in terms of how much premium is driving there.

And.

We're not going to give you an exact number but it's included the <unk>.

Revenue hit is included in our fourth quarter guidance. So we've.

Speaker 4: We've extended at least through October , and then we'll see what happens. The reason we're not saying how much exposure there is, we don't know how this will evolve yet.

We've extended at least through October and then we will see what happens the reason, we're not saying how much exposure. There is we don't know how this will evolve yet so we're staying very fluid, but I think we feel very confident that we can get inside of our guidance ranges here with Israel kind of in a worst case scenario.

Speaker 8: staying very fluid, but I think we feel very confident that we can get inside of our guidance ranges here with Israel kind of in a worst case scenario. Got it. Okay. Thanks very much.

Got it okay. Thanks very much.

Matthew will now go to our final analyst question.

Glen Hauenstein: And geographically, I think what we're really excited about is the coastal hub investments we've made, and particularly New York, that's something we're looking for in 24. We see a lot of momentum in the northeast of New York in particular as things to look forward to in 24.

Speaker 1: Certainly. Your last question is coming from Sheila, Kyle Klu, from Jeffries. Your line is lost.

Certainly your last question is coming from Sheila <unk>.

Jefferies. Your line is live.

Speaker 16: Thank you, good morning guys. And I wanted to ask you a question. You made a comment about your leading into the cop curve and really leading me industry here with pilot pay and the like. So the question comes, how do we think about your double digit margins today versus low cost carriers and what they'll reporting Q3 and margin moving pieces maybe into 2024? If you wanna provide that, or maybe the Delta versus Delta and other carriers.

Thank you good morning, guys.

And I wanted to ask you. A question you made a comment about leaning into the cost curve and really leading the industry here with pilot pay and the like so a question on how do we think about your double digit margin today versus low cost carriers and what's alba pointing Q3.

Glen Hauenstein: Okay, and then on the outlook for next year, you know, growing with your JVs on the international side, how does the changes in Mexico impact this as they move to a category one? What's the FAA? Right, Mexico has been a great source of strength for us through the last year, and we see continued strength in those Mexican business. And I think when you think about what we read in the press and what you all see and the onshoreing and moving factories from Asia down into Mexico, we've seen really an incredible strength in demand from the business sector in Mexico, and that's looking really robust into 2024.

Margin moving pieces, maybe into 2024, if you want to provide that or maybe the downside versus downtime.

Glen Hauenstein: And working with there in Mexico now, you know, we really couldn't do much with them. These are things we wanted to do in the past that you see us coordinating with them. We have a ATI joint venture, so we've been working very closely with them to continue to work on where we see strength and being able to serve those markets better, including the auto sector and Detroit, and including Atlanta as a primary gateway to Mexico primary and secondary airports.

Yes.

Yes.

Speaker 3: I surely you should look at our 24 guide that we Katie with our three year plan. The good news of Delta is that we have all of our labor costs, you know, at the new market across the board today in posting those double digit margins. So to the extent other carriers need to be increasing their labor costs in future negotiations, they're just going to be chasing chasing the Delta cost.

Hi, Sheila you should look at our 24 guide that we gave you with our three year plan. The good news of Delta is that we have all of our labor cost at the new market across the board today in posting those double digit margins so to the extent other carriers need to be increasing their labor cost in future negotiations.

Brandon Oglenski: Thank you.

<unk>.

They're just going to be chasing chasing the delta cost.

Speaker 3: I think that conversions of industry rates is something we've talked about as another opportunity as we look at it trying to make sure we're all running a better business here and we're not.

I think that conversions.

Industry rates is something we've talked about is another another opportunity as we look at trying to make sure. We're all running a better business here and we're not.

Speaker 3: We had the same incentives to make sure that our costs are fine and no wait.

We had the same incentives to make sure that our costs are finding their way into our pricing.

Speaker 16: Sure, no, it makes sense. And if I could ask one more, a lot on Delta TechOps, obviously a big asset for Delta right now. Anything you could talk about, I think you previously said GTF shop visits are running at 670 to 80 engines. I don't know if that was only GTF or all engines. Ramping to potentially 400. If you could just give us the opportunity, longer term with Delta TechOps and what utilization is.

Sure No makes sense and if I could ask one more a lot on telco Tech ops.

Obviously, a big asset for Delta right now anything you could talk about I think you previously said GPS shop visits are running at 70 to 80 Amgen's I don't know if that was the only GTS are all amgen.

Helen Becker: Your next question is coming from Helen Becker from TD Cowan. Your line is live. Thanks very much operator. Hi everybody, and thank you very much for the question. Just on with with with respect to as you think about travel next summer on the North Atlantic, especially where US citizens are going to need visas. How are you thinking about communicating that to people as they both trips? Is that going to be in the reservation process or follow ups or, you know, how do you avoid surprises?

I think that potentially 400, maybe if you could just give us the.

Talk about the opportunity longer term with Delta Tech ops and what utilization is.

Speaker 5: Yes, talked about it. A baseline this year, Tech Out's for Geertrope Offend, engine overalls would be in the 151.6D range. We have built capacity to take that to three up to 350 and continue to...

Yes.

You talked about it a baseline this year.

So we're geared turbofan engine overhauls would be in the $1 $51 60 range, we have built capacity to take that to free up to $3 50 and continue to.

Speaker 5: We've discussed long term, medium and longer term capacity needs with Pratt related to that. So we talked about it in an investor day.

Discuss long term medium and longer term capacity needs with with Pratt related to that so.

Helen Becker: Helen, hi, it's Peter Carter. Say we will we will make sure our customers are aware of the visa requirement at various points along the purchasing path and the journey. And I will tell you that the nice thing about the new visa requirement is it is of e visa. So it's a fairly straightforward process that we think will take about 24 hours. Yeah, I think it's like Australia, right? Where it's pretty quick unless it's not. I think okay, that's helpful.

Helen Becker: Thank you.

So we talked about it in Investor day.

Speaker 5: very optimistic about our position, not only the heritage that we have in the great expertise that we have in the Delta TechOps team, but our positioning as it relates to being on all the key next generation platforms, whether that's Geertogrofan, whether that's Rolls, and also the leap engine create a real set of opportunities for us as we think about this business and multiples of what it can be today over the medium and long term. Thank you.

Very optimistic about our position model.

Heritage that we have and the great expertise that we have in the Delta Tech ops team, but our positioning as it relates to being on all the key next generation platforms, whether that's geared turbofan with its roles and also the.

The leap engine.

Create a real set of opportunities for us as we think about this business and multiples of what it can be today over the medium and long term.

Thank you so much.

Helen Becker: And then the other question I had was just on the changes to Israel. How big actually is that in your total in the total market? It's a lot of ASMs, but it can't be that big in terms of I guess exposure. It's a little over a point of ASMs, and we're not going to get an exact number, but it's included. The revenue hit is included in our fourth quarter guide. So we've extended at least through October, and then we'll see what happens.

That will wrap the analyst portion of the call I'll now turn it over to Tim maybe just to start the media question.

Speaker 2: That will wrap the analyst portion of the call. I'll now turn it over to 10 mates to start the media.

Speaker 17: Thank you, Julie. Matthew, if we could, as we transition from the analyst questions to you, I just from the members of the media, maybe repeat the instructions for everyone, please.

Thank you Julie Matthew if we could as we transitioned from the analyst questions to those from the members of the media.

Maybe repeat the instructions for everyone. Please.

Speaker 1: Certainly, at this time we'll be conducting a Q&A session for media questions. If you have any questions or comments please press star then one on your phone. Please hold Wally Pol for questions.

Certainly at this time, we'll be conducting a Q&A session for media questions. If you have any questions or comments. Please press star then one on your phone.

Please hold while we poll for questions.

Yes.

Your first question is coming from Dawn Gilbertson from Wall Street Journal Your line is live.

Speaker 1: Your first question is coming from Don Gilbertson from Wall Street Journal. Your line is live.

Helen Becker: The reason we're not saying how much exposure there is, we don't know how this will evolve yet. So we're staying very fluid, but I think we feel very confident that we can get inside of our guidance ranges here with Israel kind of an worst case scenario. Got it.

Helen Becker: Okay, thanks very much.

Speaker 18: Hi, a good morning. Ed, I wonder if you could give us any more color, Ed or Glenn on the reaction to the sky miles changes and when you expect to announce the things you might be rolling back or changing.

Hi, Good morning, Ed I Wonder if you could give us any more color Ed or Glen.

The reaction to the Skymiles changes and when you expect to.

Now the things you might be rolling backward changing.

Matthew: Matthew, we'll now go to our final panel question.

Speaker 3: Hi, Dawn. We, you know, we've mentioned publicly over the last couple of weeks that we're certainly receiving good feedback from our customers. Respect to the changes. I have indicated that we

Hi, Don.

Sheila Kahyaoglu: Certainly. Your last question is coming from Sheila, Kyle, glue from Jeffries. Your line is live. Thank you. Good morning, guys. And I wanted to ask you a question. You made a comment about your leading into the cost curve and really leading the industry here with pilot pay and the like. So the question comes, you know, how do we think about your double digit mark? The margin today versus low cost carriers and what they'll reporting Q3 and margin moving pieces maybe into 2024. If you want to provide that or maybe the Delta versus Delta and other carriers.

We've.

I've mentioned publicly over the last couple of weeks that were <unk>.

Certainly receiving good feedback from our customers with respect to the changes.

Have indicated that we.

Speaker 3: at too many changes rolled out at the same time and we did it to go back and reassess.

At too many.

Changes.

Rolled out at the same time that we needed to go back and reassess.

Speaker 3: The planned rollout for the new qualification levels.

The planned planned rollout for the new qualification levels.

Speaker 3: I mentioned this this morning on the CNBC interview. There's two things though that are common throughout all of the feedback. One is there is the intense loyalty to Delta, which is really heartwarming to see. The loyalty to this brand is great. We've worked hard to build it and we maintained it. We will continue to maintain that. There should be no question about that.

And I mentioned this this morning on the CNBC interview Theres, two things, though that are common throughout all of the feedback. One is there is the intense loyalty to delta, which is really heartwarming to see the loyalty to this brand as great. We've worked hard to build it and we maintain that we will continue to maintain that there should be no question about.

Dan Janki: I surely you should look at our 24 guide that we Katie with our three year plan. The good news of Delta is that we have all of our labor costs, you know, at the new market across the board today. In posting those double digit margins, so to the extent other carriers need to be increasing their labor costs in future negotiations, they're just going to be chasing chasing the Delta cost. And I think that conversions of industry rates is something we've talked about as another another opportunity as we look at trying to make sure we're all running a better business here and we're not. But we had the same sentence to make sure that our costs are finding a way into our process. Sure, no, it makes sense.

That and secondly that.

Speaker 3: And secondly, most everyone also agrees that something has to be done because everyone sees that the premium number of customers that we continue to build are in excess of the premium assets that we have to offer.

Most everyone also agrees that something has to be done because everyone sees that.

Premium number of customers that we continue to build are in excess of the premium assets that we have to offer and so figuring out how to better rationalize and make certain that the service levels for our premium customers are where they need to be is there's various ways to get it. We've received a lot of ideas is two different ways to think about it and you'll be hearing.

Speaker 3: So figuring out how to better rationalize and make certain that the service bubbles for our premium customers are where they need to be is there's various ways to get it. We've received a lot of ideas as to different ways to think about it. And you'll be hearing from us in the coming days.

In the coming days.

Okay. If I could just have one quick follow up on that front.

Dan Janki: And if I could ask one more, a lot on Delta tech ops, you know, obviously a big asset for Delta right now. Anything you could talk about, I think you previously said GTF shop visits are running at 670 to 80 engines. I don't know if that was only GTF or all engines ramping to potentially 400. If you could just give us the opposite talk about the opportunity longer term with Delta tech ops and what utilization is.

Speaker 18: Okay, if I could just have one click follow up on that front. What is driving in terms of the reaction? I mean, are you seeing just feedback or are you seeing an impact on credit card signups and or cancellations? I mean, what's driving this pretty quick change?

What is driving in terms of the reaction I mean are you seeing just feedback or are you seeing an impact on credit card.

Sign ups and our cancellations I mean whats driving this pretty quick.

Change to your initial plans.

Speaker 3: Well, it's the feedback. It's not the, no, we're not seeing any change in trajectory rather on acquisitions or changes in spend levels, everything continues to stay intact as Glenn and I think mentioned during some of his comments. This is good feedback that we're seeing and can't believe with some of that, I agree with him.

Well its the feedback is not no we're not seeing any any change in trajectory rather on acquisitions or changes in spend levels everything continues to stay intact as Glenn I think mentioned during some of his comments.

Dan Janki: Yes, talk about it. A baseline this year, tech ops for gear and trouble, and engine overalls would be in the 151 60 range. We have built capacity to take that to three up to 350 and continue to discuss long term medium and longer term capacity needs with with Pratt related to that. So we talked about it an investor day, very optimistic about our position, not only the heritage that we have in the great expertise that we have in the Delta tech ops team, but our positioning as it relates to being on all the key next generation platforms.

This is good feedback that we're seeing in the end.

And candidly with some of it I agree with them.

Thank you.

Thank you. Your next question is coming from Alison Sider from Wall Street Journal Your line is live.

Speaker 1: Thank you. Your next question is coming from Alison Sider from Wall Street Journal. Your line is live.

Dan Janki: Whether that's a gear token fan, whether that's roles and also the leap engine create a real set of opportunities for us as we think about this business and multiples of what it can be today over the medium and long.

Speaker 12: Hey, thanks so much. So I just finished some analysis recently about sort of the potential impact of go costating. Is this people really started taking weight loss turns, like was emphic and big numbers?

Hey, thanks, so much.

There's been some analysis recently about the potential impact cost savings, it's people really starting to gain weight loss sharing with them taking big numbers is.

Speaker 12: Is that something you look at at all? I do factor that into your fuel projections or for anything like that.

Is that something you look at it all if you factor that into your projections or anything like that.

No we don't.

Speaker 12: And then, in fact, I was also curious on potential Israel evacuations in place.

And then if I could.

I'll be curious on.

Potential Israel evacuees and flight.

Dan Janki: Thank you so much.

Speaker 12: I know there's ongoing discussions with the government on this, but without the open to flying Israel under a charter, if the government does, or if there's a craft activation, or would you...

I know, there's ongoing discussions with the government on that but.

Matthew: That will wrap the analyst portion of the call.

Tim Mapes: I'll now turn it over to Tim Mage to start the media question. Thank you, Julie. Matthew, if we could, as we transition from the analyst questions to others from the members of the media, maybe repeat the instructions for everyone, please. Certainly, at this time, we'll be conducting a Q&A session for media questions. If you have any questions or comments, please press star then one on your phone. Please hold while we pull for questions.

Adult would be open to flying Israel under a charter if the government asked or if there was a kraft and kraft activation or would you.

Speaker 12: rather, you know, just flies to point outside of Israel, you know, is there, is there any open-up if I guess supplying kind of...

Rather just fly two points outside of Israel is there is there any openings I guess the flying under.

Under those circumstances.

Speaker 3: There are discussions as I've indicated. Right now we're looking at providing some additional lift to Europe to get people out of Europe , but no, we don't have any plans to be flying into Israel. It's considered on February , US carrier operate in that airspace.

There are discussions as I've indicated.

Right now we're looking at providing.

Providing some additional lift to Europe to get people out of Europe , but no. We don't have any plans to be flying into Israel. It's considered unsafe for a U S carrier to operate.

Dawn Gilbertson: Your first question is coming from Dawn Gilbertson from Wall Street Journal. Your line is live. Hi, a good morning.

In that aerospace currently.

Thank you.

Dawn Gilbertson: And I wonder if you could give us any more color at or Glenn on the reaction to this guy miles changes. And when you expect to, you know, announce the things you might be rolling back or changing. Hi, Dawn. We, you know, we've mentioned publicly over the last couple of weeks that we're certainly receiving good feedback from our customers, respect to the changes. I have indicated that we had too many changes rolled out at the same time that we needed to go back and reassess the planned plan to roll out for the new qualification levels.

Yeah.

Speaker 1: Thank you. Your next question is coming from Mary Schlangensdine from Bloomberg News. Your line is live.

Thank you. Your next question is coming from maybe Schlangen Stein from Bloomberg News Your line is live.

Speaker 12: Hi, good morning. I wanted to ask real quickly with the ongoing slot waiver situation in New York where the airlines were asked to reduce capacity because of the congestion and the air traffic controller shortage. Can you talk about how much of that delta is taking advantage of and whether you expect that if it continues long term to start to have some significant impact, also whether you're redeploying that capacity into other markets?

Hi, Good morning, I wanted to ask real quickly with the ongoing slot waiver situation in New York with the Airlines, we're asked to reduce capacity because of the congestion in the air traffic controllers shortage can you talk about.

How much of that Delta is taking advantage of and whether you expect that if it continues long term to start to have some significant impact also whether you're redeploying that capacity into other markets.

Well. Thanks for that question, Yes, we are planning on using the entirety of the slot, which is I believe 10% of our flights into and out of Kennedy Laguardia.

Speaker 10: Well, thanks for that question. Yes, we're planning on using the entirety of the SWOT waiver, which is, I believe, 10% of our flights.

Dawn Gilbertson: I mentioned this this morning on the CNBC interview. There's two things though that are common throughout all of the feedback. One is there is the intense loyalty to Delta, which is really heartwarming to see. The loyalty to this brand is great. We've worked hard to build it. We maintained it. We will continue to maintain that. There should be no question about that. And secondly, that most everyone also agrees that something has to be done because everyone sees that the premium number of customers that we continue to build are an excess of the premium assets that we have to offer.

Speaker 8: in order to help with the air space congestion issues that are surrounding those airports right now.

Order to help with the airspace congestion issues that are surrounding those airports right now.

Speaker 10: So what we're trying to do is have minimal impact. We will not withdraw from any individual markets. We will thin out some frequencies. We'll put some larger gauging and any of the assets that are freed up from New York will get redeployed into other parts of our network for now. But it shouldn't really be very different than the summer as you know that's rolled forward from the summer which we had 10% out and that's just extending it through the winter. So you won't see really I think any dramatic changes to our schedule.

So what we're trying to do is have minimal impact we will not withdraw from any individual markets. We will spin out some frequencies will put some larger dajun.

Any of the assets that are freed up from New York will get redeployed into other parts of our network for now.

It shouldnt really be very different than the summer as you know thats rolled forward from the summer, which we had 10% out and Thats just extending it through the winter. So you won't see really I think any dramatic changes to our schedules versus where we're sitting today.

Dawn Gilbertson: And so figuring out how to better rationalize and make certain that the service bubbles for our premium customers are where they need to be is there's various ways to get it. We've received a lot of ideas as to different ways to think about it.

Speaker 19: Does that become a broader problem for you if that continues to be extended?

Does that become a broader problem for you if that continues to be extended.

Speaker 4: I think the broader problem is not being able to operate in the New York airspace.

I think the broader problem is not being able to operate in the New York Aerospace and so.

Dawn Gilbertson: And you'll be hearing from us in the coming days. Okay.

Speaker 3: I think we're working very closely with the government to see what we can do to improve the situation there. It was very difficult on our customers this summer and certainly we're all hoping for some relief by next summer. And Mary, we really, if this is Peter Carter, we really appreciate the FAA providing that relief and acknowledging that there is a constraint in the Northeast with respect to the staffing of air traffic controllers. And frankly, that's the thing that we need to really solve as an industry.

I think we're working very closely with the government to see what we can do to improve the situation. There it was very.

Alison Sider: If I could just have one quick follow up on that front. What is driving in terms of the reaction? I mean, are you seeing just feedback or are you seeing an impact on credit card signups and or cancellations? I mean, what's driving this pretty quick change to your initial plans? Well, it's the feedback. It's not the no, we're not seeing any any change in trajectory rather on acquisitions or changes in spend levels. Everything continues to stay intact is going. I think mentioned during some of his comments. This is good feedback that we're seeing and can't believe with some of that I agree with them. Thank you.

Very difficult on our customers this summer and certainly we're all hoping for for some relief by next year and Mary We really this is Peter Carter, we really appreciate the FAA, providing that relief and acknowledging that there is a constraint in the northeast with respect to the staffing of air traffic controllers and frankly thats.

The thing that we need to really solve as an industry.

Okay. Thank you.

Speaker 1: Thank you. Your next question is coming from Leslie Joseph from CNBC. Your line is live.

Thank you. Your next question is coming from Leslie Joseph from CNBC. Your line is live.

Speaker 19: Hi, Agamourning. We keep seeing air pairs fall, and I was wondering if you could talk a little bit about what kind of discounting you're having to do in the fall, and then have you made any capacity changes on days when people might have traveled in the off peak, and maybe they're going back to more traditional booking success, that's the case.

Hi, good morning.

Airfares fall and I was wondering if you could talk a little bit about what kind of discounting you are having to do in the <unk>.

Alison Sider: Your next question is coming from Alison Cider from Wall Street Journal. Your line is live. Hey, thanks so much. There's been some analysis recently about sort of the potential impact go costating. Is this people really started seeking weight loss insurance? Like was empty in big numbers? Is that something you look at at all? I do factor that into your fuel projections or anything like that?

Paul and then have you made any capacity changes.

Days when people might have.

Traveled in the off peak and maybe theyre going back to more traditional bookings if thats the case.

Thanks.

Speaker 4: Sure, I think the most recent data that came out this morning has been flat to up slightly month over month. So I don't think that as an industry level, that's a good indication. What we've seen is that actually June was our lowest point in terms of year-over-year average fares, and it's moved up to us since then. And that's really driven by the premium side.

Sure I think the most recent data that came out. This morning has been flat to up slightly month over month. So I don't think as an industry level thats a good indication of what we've seen is that actually June was our lowest point in terms of year over year average fares and it's moved up for US since then and that's really driven by the premium side.

Alison Sider: No, we don't, Ali. And then I was also curious on potential Israel vacillation flights. I know there's ongoing discussions with the government on this, but you know, would Delta be open to flying Israel under a charter, you know, if the government asks or if there's a craft act or a craft activation, or would you rather, you know, just fly to point outside of Israel, you know, is there any open if I guess, to flying kind of under those circumstances?

Speaker 8: And the success we've had in terms of selling more premium and the fairest we're getting for premium products and services. So yes, at the bottom end there's some discounting. There's also some fair initiative. So it's only the very fluid situation. And right now I think we're very, we're calling it stable between third quarter and fourth.

Success, we've had in terms of selling more premium and the fares were getting for our premium products and services. So yes at the bottom and there is some discounting. There is also some fare initiatives. So it's always a very fluid situation and right.

Right now I think we're very we're calling it stable between third quarter and fourth quarter.

Speaker 4: And the fairs that you're just counting two, is that like on par with 2019, or is that like a sort of a reference point? Or? Yeah, certain markets are certain markets are above. So I think the market basket is there, at the very bottom end, there may be slightly below where there were 19, but no, not really. There's always a fair in a market that is below, but in general, they're not.

And.

The fares that you're discounting too or is that like on par with 2019 or is that like is there kind of a reference point for yes.

Alison Sider: There are discussions as I've indicated. Right now we're looking at providing some additional lift to Europe to get people out of Europe, but no, we don't have any plans to be flying into Israel. So it's considered unsafe for a U.S, carrier to operate in that air space currently. Thank you.

Certain markets or certain markets or above so I think the market basket is there at the very bottom end there may be slightly below where they were at 19, but no not really.

There's always a fair and a market is below but in general they are not.

Thanks.

Speaker 17: Thank you, Leslie. Matthew, we have time for a one final question, please.

Thank you Leslie Matthew we have time for one final question. Please.

Mary Schlangenstein: Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live. Hi, good morning. I wanted to ask real quickly with the ongoing slot waiver situation in New York where the airlines were asked to reduce capacity because of the congestion and the air traffic controller shortage. Can you talk about how much of that Delta is taking advantage of and whether you expect that if it continues long term to start to have some significant impact, also whether you're redeploying that capacity into other markets?

Speaker 1: Certainly. Your last question is coming from David Slutnik from TPG. Your line is live.

Certainly your last question is coming from David Slotnick from TPG. Your line is live.

Good morning, and thank you for taking the question.

Speaker 6: Good morning and thank you for taking the question. Going back to the loyalty program, were you surprised by the customer reaction and I suppose the degree of it? And what were you expecting instead of that?

Back to the loyalty program.

Prized by the customer reaction.

And what would you sort of expecting in set up at this time.

Speaker 3: We were certainly expecting some feedback. And by the way, some of the feedback we were saying is very positive and encourages us not to make any changes. So there wasn't any one...

We were certainly expecting.

Some some feedback.

And by the way some of the feedback.

Mary Schlangenstein: Well, thanks for that question. Yes, we're planning on using the entirety of the slot waiver, which is I believe 10% of our flights into and out of Kennedy and LaGuardia in order to help with the air space congestion issues that are surrounding those airports right now. So what we're trying to do is have minimal impact. We will not withdraw from any individual markets. We will thin out some frequencies. We'll put some larger gauge in any of the assets that are freed up from New York will get redeployed into other parts of our network for now.

We received is very positive.

<unk> is not to make any changes so.

There wasn't any one.

Speaker 3: cohort that was was silent on the matter. We heard all of the full 360 view of the perspective, but it gave us a chance to sit back, reflect on it, and there were points about the the program that I thought we could make some modifications to. There still will be changes to the program that I've been very clear about that, but we're going to make modifications to what we know.

Cohort that was silent on the matter.

A full 360 view.

The perspective, but it gave us a chance to sit back reflect on it and there were points about the program that I thought we.

We could make some modifications to.

There still will be changes to the program.

Mary Schlangenstein: But it shouldn't really be very different than the summer as you know, that's rolled forward from the summer, which we had 10% out. And that's just extending it through the winter. So you won't see really, I think any dramatic changes to our schedules versus where we're sitting today. Does that become a broader problem for you if that continues to be extended? I think the broader problem is not being able to operate in the New York airspace.

Been very clear about that but we're going to make modifications to what we announced.

Speaker 1: Thank you, and just to follow up, was American Express expecting any changes to the premium card demand just with the lounge access? Did they think that that's potentially gonna fall and if so, will that impact your loyalty revenue?

Thank you and just a follow up.

American Express expecting any changes to the premium card demand just with the lounge access do they think that that's potentially going to fall and if so will that impact your royalty revenue.

Okay.

Speaker 4: American Express, we of course did this with full back and forth knowledge, so we did this together with American Express. And if anything, we've since that we've announced that we've seen a shift to higher premium hard acquisition.

American Express.

We of course did this with full back and forth knowledge. So we did this together with American Express and if anything since that we've announced that we've seen a shift to higher premium hard acquisitions. So I think we're well within.

Mary Schlangenstein: And so I think we're working very closely with the government to see what we can do to improve the situation there. It was very difficult on our customers this summer. And certainly we're all hoping for some relief by next summer.

Speaker 4: So I think we're well within from that perspective where we thought we'd be.

From that perspective, where we thought we'd be.

Mary Schlangenstein: And Mary, we really, this is Peter Carter. We really appreciate the FAA providing that relief and acknowledging that there is a constraint in the Northeast with respect to the staffing of air traffic controllers. And frankly, that's the thing that we need to really solve as an industry. Yes, thank you. Thank you.

Great. Thank you.

Speaker 17: Thank you, David. And Matthew, I think that will conclude our call.

Thank you, David and Matthew I think that will conclude our call.

Speaker 1: Thank you, that concludes today's conference. Thank you for your participation today.

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

Leslie Joseph: Your next question is coming from Leslie Joseph from CNBC. Your line is live. Hi, good morning.

Leslie Joseph: We keep seeing air pairs fall. And I was wondering if you could talk a little bit about what kind of discounting you're having to do in the fall. And then have you made any capacity changes on days when people might have traveled in the off peak and maybe they're going back to more traditional booking success. The case.

Leslie Joseph: Sure, I think the most recent data that came out this morning has been flat to up slightly month-over-month, so I don't think as an industry level, that's a good indication. What we've seen is that actually June was our lowest point in terms of year-over-year average fares, and it's moved up for us since then, and that's really driven by the premium side, and the success we've had in terms of selling more premium and the fares we're getting for premium products and services.

Leslie Joseph: So, yes, at the bottom end, there's some discounting, there's also some fair initiative, so it's always a very fluid situation, and right now, I think we're very, we're calling it stable between third quarter and fourth quarter. And the fares that you're just counting two, or is that like on par with 2019, or is that, if there's kind of a reference point? Yeah, certain markets are certain markets are above, so I think the market basket is, at the very bottom end, there may be slightly below where there were 19, but no, not really. There's always a fair in a market that is below, but in general, they're not. Thank you, Leslie.

Matthew: Matthew, we have time for one final question, please.

David Slotnick: Certainly, your last question is coming from David Slutnik, from TPG, your line is live. Good morning, and thank you for taking the question. Going back to the loyalty program, were you surprised by the customer reaction, and I suppose the degree of it, and what were you expecting instead of that, if that? We were certainly expecting some feedback, and by the way, some of the feedback we received is very positive and encourages us not to make any changes, so there wasn't any one cohort that was silent on the matter. We heard full 360 view of the perspective, but it gave us a chance to sit back, reflect on it, and there were points about the program that I thought we could make some modifications to.

David Slotnick: There still will be changes to the program, and I've been very clear about that, but we're going to make modifications to what we announced. Thank you, and just to follow up with American Express, expecting any changes to the premium card demand, just with the lounge access, do they think that that's potentially going to fall, and if so will that impact your loyalty revenue? American Express, we of course did this with full back and forth knowledge, so we did this together with American Express, and if anything we've seen that we've announced that we've seen a shift to higher premium card acquisitions. So I think we're well within from that perspective where we thought we'd be. Great.

David Slotnick: Thank you.

David Slotnick: Thank you, David, and Matthew, I think that will conclude our call. Thank you. That concludes today's conference. Thank you for your participation today.