Q2 2024 Delta Air Lines Inc Earnings Call

July 11, 2024

Good morning everyone and welcome to the Delta Air Lines June quarter 2024 financial results conference call. My name is Matthew and I'll be your coordinator.

Matthew: or Financial Result Conference Call.

Matthew: My name is Matthew, and I'll be your coordinator. At this time, all participants are on a listen-only mode until a question-and-answer session following the presentation. 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.

Matthew: Your financial results conference call. My name is Matthew, and I'll be your coordinator. At this time, all participants are in a listen-only mode until a question and answer session following the presentation.

At this time, all participants are on a listen-only mode until a question and answer session following the presentation. As a reminder, today's call is being recorded.

Matthew: As a reminder, today's call is being recorded. 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. I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

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.

Julie Stewart: Out now, let's 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 for our June quarter 2024 earnings call.

Julie Stewart: Thank you, Matthew.

Julie Stewart: Thank you, Matthew. Good morning, everyone. And thanks for joining us for our June quarter 2024 call. Joining us from Atlanta today are CEO Ed Bastian, our President Glen Hauenstein, and our CFO Dan Janki. Ed will open the call with an overview of Delta's performance and strategy. Glen will provide an update on the revenue environment, and Dan will discuss costs and our After the prepared remarks, we'll take analyst questions. We ask that you please limit yourself to one question and a brief follow-up so that we can get to as many of you as possible. And after the analyst Q&A, we'll move to our media.

Julie Stewart: Good morning, everyone, and thanks for joining us for our June quarter 2024 earnings call. Joining us from Atlanta today are CEO Ed Bastian, our president, Glen Hauenstein, and our CFO, Jan Janki.

Speaker Change: Joining us from Atlanta today are CEO Ed Bastian, our President Glen Hauenstein, and our CFO Dan Janki. Ed will open the call with an overview of Delta's performance and strategy, Glen will provide an update on the revenue environment, and Dan will discuss costs and our balance sheet.

Ed Bastian: Ed will open the call with an overview of Delta performance and strategy. Glenn will provide an update on the revenue environment, and Daniel discussed costs in our balance sheet.

Julie Stewart: After the prepared remarks, we'll take analyst questions. We ask that you please limit yourself to one question and the brief file off, so that we can get to as many of you as possible.

Speaker Change: After the prepared remarks, we'll take analyst questions. We ask that you please limit yourself to one question and a brief follow-up so that we can get to as many of you as possible. And after the analyst Q&A, we'll move to our media questions.

Julie Stewart: And after the analyst Q&A, will move to our immediate questions.

Julie Stewart: 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 filing.

Julie Stewart: 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 actual results to differ materially from those projected. Some of the factors that may cause such differences are described in Delta.

Speaker Change: 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.

Julie Stewart: We'll also discuss non-GAAP financial measures, and all results include special items unless otherwise noted. You can find a reconciliation of a non-GAAP measures on the Investor Relations page at ir.delta.com.

Speaker Change: Some of the factors that may cause such differences are described in Delta's SEC filing.

Julie Stewart: We'll also discuss non-GAAP financial measures, and all results exclude special items unless otherwise necessary. You can find a reconciliation of our non-GAAP measures on the Investor Relations page at IR.Delta. And with that, I'll turn the call over to you.

Speaker Change: We'll also discuss non-GAAP financial measures, 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.com. And with that, I'll turn the call over to Ed.

Ed Bastian: And with that, I'll turn the call over to Mr. Ed. Well, thank you, Julie. Good morning, everyone. We appreciate you joining us today. Earlier this morning, we reported our June quarter results, posting pre-tax earnings of $2 billion or $2.36 per share on record quarterly revenue of 5.4% over last year. These results are the second highest quarterly earnings in our history. We achieved a 15% operating margin and generated $1.3 billion of free cash during the quarter, bringing our first half free cash flow to $2.7 billion. With strong cash generation, we continue to progress our balance sheet back towards investment-grade metrics and announced a 50% increase to our quarterly dividend.

Edward H. Bastian: Well, thank you, Julie. And good morning, everyone. We appreciate you joining us today. Earlier this morning, we reported our June quarter results, posting pre-tax earnings of $2 billion, or $2.36 per share, on record quarterly revenue of 5.4% over last year. These results are the second highest quarterly earnings in our history. We achieved a 15% operating margin and generated $1.3 billion of free cash during the quarter, bringing our first half free cash flow to $2.7 billion.

Edward H. Bastian: Well, thank you, Julie, and good morning, everyone. We appreciate you joining us today.

Edward H. Bastian: Earlier this morning, we reported our June quarter results, posting pre-tax earnings of $2 billion, or $2.36 per share, on record quarterly revenue of 5.4% over last year.

Edward H. Bastian: These results are the second highest quarterly earnings in our history.

Edward H. Bastian: We achieved a 15% operating margin and generated $1.3 billion of free cash during the quarter, bringing our first half free cash flow to $2.7 billion.

Edward H. Bastian: With strong cash generation, we continued to progress our balance sheet back towards investment grade metrics and announced a 50% increase in our quarterly dividend. We delivered a return on invested capital of 13%, five points above our cost of capital and in the top half of the S&P 500. Delta's leadership is increasingly being recognized alongside some of the world's best companies. Just last month, Delta was ranked fourth in the Fortune 500 Return on Leadership by Fortune and Indigo, just behind NVIDIA and Microsoft.

Edward H. Bastian: With strong cash generation, we continued to progress our balance sheet back towards investment grade metrics and announced a 50% increase to our quarterly dividend.

Ed Bastian: We delivered a return on invested capital of 13%, 5 points above our cost to capital and in the top half of the S&P 500. Delta's leadership is increasingly being recognized alongside some of the world's best companies. Just last month, Delta was ranked fourth in the Fortune 500 return on leadership by Fortune and Indigo, just behind NVIDIA and Microsoft. Through the year, our teams have delivered industry-leading operational performance month in and month out, with Delta leading across all key metrics, including completion factor, on-time departures and arrivals. This performance builds on our longstanding position as the most reliable airline in the U.S., and I'd like to thank all 100,000 members of our team for their exceptional work taking care of our customers each and every day.

Edward H. Bastian: We delivered a return on invested capital of 13%, five points above our cost of capital, and in the top half of the S&P 500.

Edward H. Bastian: Delta's leadership is increasingly being recognized alongside some of the world's best companies. Just last month, Delta was ranked fourth in the Fortune 500 return on leadership by Fortune and Indigo, just behind NVIDIA and Microsoft.

Edward H. Bastian: Through the year, our teams have delivered industry-leading operational performance month in and month out, with Delta leading across all key metrics, including completion factor, on time departures, and arrivals. This performance builds on our longstanding position as the most reliable airline in the US. And I'd like to thank all 100,000 members of our team for their exceptional work taking care of our customers each and every day. They are truly the best in the business.

Edward H. Bastian: Through the year, our teams have delivered industry-leading operational performance, month in and month out, with Delta leading across all key metrics, including completion factor, on-time departures, and arrivals.

Edward H. Bastian: This performance builds on our longstanding position as the most reliable airline in the U.S. And I'd like to thank all 100,000 members of our team for their exceptional work taking care of our customers each and every day. They are truly the best in the business.

Ed Bastian: They are truly the best in the business. Recognizing the extraordinary skill and care of our people, Delta was named the 2024 Global Airline of the Year by Air Transport World at the recent IATA Annual Meeting. And for the sixth year in a row, the Point Sky ranked Delta as the best U.S. airline. Delta was also recently named the top-ranked carrier across all premium cabins in J.D. Power's North American airline satisfaction study. Sharing our success with our people is core to our culture, and we are at the forefront on total rewards for our employees. We've provided a 5% pay raise on the first of June to eligible employees, and we have accrued more than $640 million in profit sharing through the first half of the year.

Edward H. Bastian: Recognizing the extraordinary skill and care of our people, Delta was named the 2024 Global Airline of the Year by Air Transport World at the recent IATA annual meeting. And for the sixth year in a row, Point Sky ranked Delta as the best U.S. airline. Delta was also recently named the top-ranked carrier across all premium cabins in J.D. Power's North American Airline Satisfaction Survey. Sharing our success with our people is core to our culture, and we are at the forefront of total rewards for our employees. We've provided a 5% pay raise on the 1st of June to eligible employees.

Edward H. Bastian: Delta was also recently named the top-ranked carrier across all premium cabins in J.D. Power's North American Airline Satisfaction Study.

Edward H. Bastian: Sharing our success with our people is core to our culture, and we are at the forefront on total rewards for our employees.

Edward H. Bastian: We've provided a 5% pay raise on the 1st of June to eligible employees, and we have accrued more than $640 million in profit-sharing through the first half of the year. I am confident our profit-sharing payout next February will continue to lead the industry by a wide margin.

Edward H. Bastian: And we have accrued more than $640 million in profit sharing through the first half of the year. I am confident our profit sharing payout next February will continue to lead the industry by a wide margin. Our people are the foundation that enables Delta to deliver elevated experiences to our customers. To further differentiate our service excellence, we are making high-return investments that make travel more seamless and connected, including generational airport rebuilds, the most comprehensive lounge network in the industry, Expanded Premium Offerings, and Fast, Free Wi-Fi On Board. Just a few weeks ago, we opened our new Delta One Lounge at JFK, the first of its kind. It offers a variety of world-class amenities for our customers, from fine dining to spa treatments.

Ed Bastian: I am confident our profit sharing pay out next February will continue to lead the industry by a wide margin. Our people are the foundation that enables Delta to deliver elevated experiences to our customers.

Edward H. Bastian: Our people are the foundation that enables Delta to deliver elevated experiences to our customers.

Ed Bastian: To further differentiate our service excellence, we are making high return investments that may travel more seamless and connected, including generational airport rebuilds, the most comprehensive lounge network in the industry, expanded premium offerings, and fast free Wi-Fi on board. Just a few weeks ago we opened our new Delta 1 Lounge at JFK, the first of its kind. It offers a variety of rural class amenities for our customers, from fine dining to spot treatments, and later this year we'll open Delta 1 lounges in Boston and Los Angeles and in Seattle early next year. We're also enhancing existing Delta Sky Clubs with the recent expansion of the Miami and the Gordia Clubs.

Edward H. Bastian: And later this year, we'll open Delta One Lounges in Boston and Los Angeles and in Seattle early next year. We're also enhancing existing Delta Sky Clubs with the recent expansion of the Miami and LaGuardia Clubs. On board, we have upgraded service in our Delta Premium Select cabin, and we'll expand this popular product to select transcontinental flights this fall. We recently released the most comprehensive refresh of the Fly Delta app in the last five years.

Edward H. Bastian: To further differentiate our service excellence, we are making high-return investments that make travel more seamless and connected, including generational airport rebuilds, the most comprehensive lounge network in the industry, expanded premium offerings, and fast, free Wi-Fi on board.

Edward H. Bastian: Just a few weeks ago, we opened our new Delta One Lounge in JFK, the first of its kind. It offers a variety of world-class amenities for our customers, from fine dining to spa treatments. And later this year, we'll open Delta One Lounges in Boston and Los Angeles, and in Seattle early next year.

Edward H. Bastian: We're also enhancing existing Delta Sky Clubs with the recent expansion of the Miami and LaGuardia Clubs.

Ed Bastian: On board, we have upgraded service in our Delta Premium Select cabin, and we'll expand this popular product to select transcontinental flights this fall. We recently released the most comprehensive refresh of the Fly Delta app in the last five years. Updates to the app added new features and functionality to save customers time and manage their travel even when the unexpected happens. Since the launch, a record number of customers have visited the app; the self-service usage during periods of disruption up five full points, improving the customer experience. And more and more customers are joining our SkyMiles Loyalty program in deepening engagement beyond flight, with about 30% of our active members carrying a Delta SkyMiles American Express credit card in their wallet.

Edward H. Bastian: On board, we have upgraded service in our Delta Premium Select Cabin and will expand this popular product to select transcontinental flights this fall.

Edward H. Bastian: We recently released the most comprehensive refresh of the Fly Delta app in the last five years. Updates to the app added new features and functionality to save customers time and manage their travel even when the unexpected happens.

Edward H. Bastian: Updates to the app added new features and functionality to save customers time and manage their travel even when the unexpected happens. Since the launch, a record number of customers have visited the app, with self-service usage during periods of disruption up five full points, improving the customer experience. And more and more customers are joining our SkyMiles Loyalty Program and deepening engagement beyond flight, with about 30% of our active members carrying a Delta SkyMiles American Express credit card in their wallet.

Edward H. Bastian: Since the launch, a record number of customers have visited the app with self-service usage during periods of disruption up five full points, improving the customer experience.

Edward H. Bastian: New card acquisitions are skewing younger, and the overall portfolio continues to shift to a more premium mix, positioning us well to achieve our long-term remuneration goal of $10 billion. Finally, just this week, we are excited to announce an exclusive partnership with Riyadh Air, a new global carrier that will begin service in Saudi Arabia next. Riyadh Air will be the premier international airline for Saudi Arabia, and its partnership will expand connectivity and premium travel options for both airlines across North America, the Kingdom of Saudi Arabia, and beyond.

Edward H. Bastian: And more and more customers are joining our SkyMiles Loyalty Program and deepening engagement beyond flight, with about 30% of our active members carrying a Delta SkyMiles American Express credit card in their wallet.

Ed Bastian: New card acquisitions are skewing younger, and the overall portfolio continues to shift to a more premium mix, positioning us well to achieve our long-term remuneration goal of $10 billion.

Ed Bastian: Finally, just this week, we're excited to announce an exclusive partnership with Riyadh Air, a new global carrier that will begin service in Saudi Arabia next year. Riyadh Air will be the premier international airline for Saudi Arabia, and partnership will expand connectivity and premium travel options for both airlines across North America, the Kingdom of Saudi Arabia, and beyond. The agreement comes amid large-scale investments in the region that are rapidly transforming the Kingdom of Saudi Arabia into a popular destination for leisure and business travel, with tremendous opportunity for growth. All of our continued investments across the travel ribbon strengthen Delta-trusted brand and build on our long-term journey to elevate the travel experience and increase our financial durability.

Edward H. Bastian: Finally, just this week we are excited to announce an exclusive partnership with Riyadh Air, a new global carrier that will begin service in Saudi Arabia next year.

Edward H. Bastian: Riyadh Air will be the premier international airline for Saudi Arabia, and its partnership will expand connectivity and premium travel options for both airlines across North America, the Kingdom of Saudi Arabia, and beyond.

Edward H. Bastian: The agreement comes amid large-scale investments in the region that are rapidly transforming the Kingdom of Saudi Arabia into a popular destination for leisure and business travel, with tremendous opportunity for growth. All of our continued investments across the travel ribbon strengthen Delta's trusted brand and build on our long-term journey to elevate the travel experience and increase our financial durability. Delta's industry leadership has never been greater, and while demand for air travel remains strong, with record TSA travel volumes up 7% from last year's levels, domestic industry growth has accelerated through the summer months, impacting yield performance in the main cabin. As the carrier of choice with a diversified revenue base, Delta is the most insulated from this dynamic.

Speaker Change: All of our continued investments across the travel ribbon strengthen Delta's trusted brand and build on our long-term journey to elevate the travel experience and increase our financial durability.

Ed Bastian: Delta's industry leadership has never been greater, and while demand for air travel remains strong, with record TSA travel volumes of 7% from last year's levels, domestic industry secret has accelerated through the summer months, impacting yield performance in the main cap. As the carrier of choice with a diversified revenue base, Delta is the most insulated from this dynamic. We are delivering double-digit margins and strong returns in this environment, with Delta expected to generate 50% of the industry's profitability in the first half of the year, despite only representing 20% of the market's capacity. That said, we are encouraged by the actions the industry is taking.

Speaker Change: Delta's industry leadership has never been greater, and while demand for air travel remains strong, with record TSA travel volumes up 7% from last year's levels, domestic industry sea growth has accelerated through the summer months, impacting yield performance in the main cabin.

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

Edward H. Bastian: We are delivering double-digit margins and strong returns in this environment, with Delta expected to generate 50% of the industry's profitability in the first half of the year, despite only representing 20% of the market capacity. That said, we are encouraged by the actions the industry is taking. C-Growth is decelerating, and there appears to be an increased focus on improving financial performance.

Speaker Change: We are delivering double-digit margins and strong returns in this environment, with Delta expected to generate 50% of the industry's profitability in the first half of the year, despite only representing 20% of the market capacity.

Ed Bastian: Secret is decelerating, and there appears to be increased focus on improving financial performance. While our returns are strong, I'm confident that we'll see an even more constructive industry backdrop through the back half of the year and into 2025.

Speaker Change: That said, we are encouraged by the actions the industry is taking.

Speaker Change: C-Growth is decelerating and there appears to be increased focus on improving financial performance. While our returns are strong, I'm confident that we'll see an even more constructive industry backdrop through the back half of the year and into 2025.

Edward H. Bastian: While our returns are strong, I'm confident that we'll see an even more constructive industry backdrop through the back half of the year and into 2025. Turning to our outlook, travel remains a top purchase priority, and Delta's core customers are in a healthy position. secular shift in consumer spend to prioritize experiences aligned perfectly with Delta's strategy and premium focus across our global network. Air travel demand is at record levels, with this past Sunday marking Delta's highest ever summer revenue.

Ed Bastian: Turning to our outlook, travel remains a top purchase priority, and Delta's core customers are in a healthy position. The secular shift in consumer spend prioritized experiences align perfectly with Delta strategy and premium focus across our global network. Air travel demand is at record levels, with this past Sunday marking Delta's highest ever summer revenue day. For the September quarter, we expect continued demand strength, a double-digit operating margin, and a free tax profit of approximately $1.5 billion. Glenn and Dan will provide more details on our third quarter outlook. With strong first half performance and good visibility into the second half, we remain confident in our full year guidance for earnings of $6 to $7 per share, free cash flow of $3 to $4 billion, and leverage of 2.5 times.

Speaker Change: Turning to our outlook, travel remains a top purchase priority, and Delta's core customers are in a healthy position.

Speaker Change: The secular shift in consumer spend to prioritize experiences align perfectly with Delta's strategy and premium focus across our global network.

Speaker Change: Air travel demand is at record levels with this past Sunday marking Delta's highest ever summer revenue day.

Edward H. Bastian: For the September quarter, we expect continued demand strength, a double-digit operating margin, and a pre-tax profit of approximately $1.5 billion. Glen and Dan will provide more details on our third quarter outlook. With strong first-half performance and good visibility into the second half, we remain confident in our full-year guidance for earnings of $6 to $7 per share, free cash flow of $3 to $4 billion, and leverage of $2.5 billion.

Speaker Change: For the September quarter, we expect continued demand strength, a double-digit operating margin, and a pre-tax profit of approximately $1.5 billion. Glen and Dan will provide more details on our third quarter outlook.

Speaker Change: With strong first-half performance and good visibility into the second half, we remain confident in our full-year guidance for earnings of $6-$7 per share, free cash flow of $3-$4 billion, and leverage of 2.5 times.

Ed Bastian: In closing, as we approach our 100-year anniversary in 2025, Delta is in a stronger position than ever before. Our industry-leading performance reflects the strength of Delta's differentiated brand and returns-focused strategy. And with our clear prioritization of free cash flow and debt reduction, Delta is exceptionally well positioned to deliver significant shareholder value. We look forward to sharing more about our long term strategic and financial goals at our upcoming Investor Day in New York this November.

Edward H. Bastian: In closing, as we approach our 100 year anniversary in 2025, Delta is in a stronger position than ever before. Our industry-leading performance reflects the strength of Delta's differentiated brand and returns focus, and with our clear prioritization of free cash flow and debt reduction, Delta is exceptionally well positioned to deliver significant shareholder value. We look forward to sharing more about our long-term strategic and financial goals at our upcoming Investor Day in New York this November. Thank you again.

Speaker Change: In closing, as we approach our 100-year anniversary in 2025, Delta is in a stronger position than ever before. Our industry-leading performance reflects the strength of Delta's differentiated brand and returns-focused strategy.

Speaker Change: And with our clear prioritization of free cash flow and debt reduction, Delta is exceptionally well positioned to deliver significant shareholder value. We look forward to sharing more about our long-term strategic and financial goals at our upcoming Investor Day in New York this November .

Ed Bastian: Thank you again.

Glen W. Hauenstein: And with that, I will hand it over to Glen for more details on our commercial portfolio. Thank you, Ed, and good morning. I want to start by thanking our employees for their hard work and dedication. They are the Delta Difference.

Glenn Hauenstein: And with that, let me hand it over to Glenn for more details on our commercial performance. Thank you, Ed. And good morning.

Speaker Change: Thank you again. And with that, let me hand it over to Glen for more details on our commercial performance.

Glenn Hauenstein: I want to start by thanking our employees for their hard work and dedication. They are the Delta difference. Revenue for the June quarter increased 5.4% year over year to a record 15.4 billion. Total unit revenue was down 2.6% compared to last year, below our guidance due to three dynamics. First, domestic industry seat growth accelerated into the summer months beyond normal demand growth. This has impacted main cabin unit revenue trends through the summer. With scheduled seat growth decelerating into the fall, June and July will be the low point, with unit revenue trends expected to significantly improve in August and beyond.

Glen W. Hauenstein: Thank you, Ed, and good morning. I want to start by thanking our employees for their hard work and dedication. They are the Delta Difference.

Glen W. Hauenstein: Revenue for the June quarter increased 5.4% year over year to a record $15.4 billion. However, total unit revenue was down 2.6% compared to last year, below our guidance due to three dynamics. First, domestic industry seed growth accelerated into the summer months beyond normal demand, and this has impacted main cabin unit revenue trends through the summer. With scheduled seat growth decelerating into the fall, June and July will be the low point, with unit revenue trends expected to significantly improve in August and beyond. Second, we are seeing about a $100 million impact on travel to Paris for the Olympics from June to August. Outside of this temporary event, summer travel demand to Europe is strong and consistent with our expectations.

Glen W. Hauenstein: Revenue for the June quarter increased 5.4% year-over-year to a record $15.4 billion.

Glen W. Hauenstein: Total unit revenue was down 2.6% compared to last year, below our guidance due to three dynamics.

Glen W. Hauenstein: First, domestic industry seed growth accelerated into the summer months beyond normal demand growth.

Glen W. Hauenstein: This has impacted main cabin unit revenue trends through the summer.

Glen W. Hauenstein: With scheduled seat growth decelerating into the fall, June and July will be the low point with unit revenue trends expected to significantly improve in August and beyond.

Glenn Hauenstein: Second, we are seeing about a $100 million impact on travel to Paris for the Olympics from June to August. Outside of this temporary event, summer travel demand to Europe is strong and consistent with our expectations. and Leslie, as Ed noted, we ran a great operation with a high completion factor. Premium continued to outperform and differentiate our results. Premium revenue was up 10% over prior year, with positive unit revenue growth. We have runway ahead as we continue adding more premium seats to our aircraft, improving our retailing capabilities, and further segmenting our products. Loyalty has also outperformed, with revenue up 8% as our Sky Miles member base continues to expand.

Glen W. Hauenstein: Second, we are seeing about a $100 million impact on travel to Paris for the Olympics.

Glen W. Hauenstein: from June to August .

Glen W. Hauenstein: Outside of this temporary event, summer travel demand to Europe is strong and consistent with our expectations.

Glen W. Hauenstein: And lastly, as Ed noted, we ran a great operation with a high completion factor. Gremium continues to outperform and differentiate our results; premium revenue was up 10% over the prior year with positive unit revenue growth. We have runway ahead as we continue adding more premium seats to our aircraft, improving our retailing capabilities, and further segmenting our product. Loyalty has also outperformed, with revenue up 8% as our SkyMiles member base continues to expand. Spend growth in our co-branded card portfolio is expected to continue outpacing the credit card industry. American Express remuneration for the quarter was 1.9 billion, 9% year over year.

Edward H. Bastian: And lastly, as Ed noted, we ran a great operation with a high completion factor.

Speaker Change: Premium continued to outperform and differentiate our results. Premium revenue was up 10% over prior year with positive unit revenue growth.

Speaker Change: We have runway ahead as we continue adding more premium seats to our aircraft, improving our retailing capabilities, and further segmenting our products.

Speaker Change: Loyalty has also outperformed, with revenue up 8% as our SkyMiles member base continues to expand. Spend growth in our co-brand card portfolio is expected to continue outpacing the credit card industry.

Glenn Hauenstein: Spend growth in our co-brand card portfolio is expected to continue outpacing the credit card industry. American Express renemoration for the quarter was 1.9 billion, up 9% year over year. Cargo revenue was 16% higher than the previous year, a significant improvement from the last 12 months, and we are encouraged by the trends we're seeing. Diverse revenue streams generated 56% of total revenue. These valuable revenue streams led by premium and loyalty are continuing higher growth in margins, underpinning Delta's industry-leading financial performance and increasing our financial durability. Domestic passenger revenue was up 5% over the prior year, and international passenger revenue grew up 4% over last year's record June quarter.

Speaker Change: American Express remuneration for the quarter was $1.9 billion, up 9% year-over-year.

Glen W. Hauenstein: Cargo revenue was 16% higher than the previous year, a significant improvement from the last 12 months, and we are encouraged by the trends we're seeing. Diverse revenue streams generated 56% of total revenue. These valuable revenue streams, led by premium and loyalty, are continuing higher growth and margins, underpinning Delta's industry-leading financial performance and increasing our financial durability. Domestic passenger revenue was up 5% over the prior year, and international passenger revenue grew up 4% over last year's record June quarter.

Speaker Change: Cargo revenue was 16% higher than the previous year, a significant improvement from the last 12 months, and we are encouraged by the trends we're seeing.

Speaker Change: Diverse revenue streams generated 56% of total revenue. These valuable revenue streams, led by premium and loyalty, are continuing higher growth and margins, underpinning Delta's industry-leading financial performance and increasing our financial durability.

Speaker Change: Domestic passenger revenue was up 5% over the prior year, and international passenger revenue grew up 4% over last year's record June quarter.

Glenn Hauenstein: As the business carrier of choice, Delta benefited from double-digit volume growth in this high-value segment with broad demand and growth across all sectors. Looking forward, demand for travel on Delta remains robust. Our core customer base is healthy, and demand for premium products continues to outperform the main cabin. We expect the strong growth in business travel to continue, with 90% of companies in our recent corporate surveys saying they intend to maintain or increase travel volumes in the back half of the year. International demand is strong and continues to benefit from demographic shifts, US point of sale changes, and an extension of the leisure travel season.

Glen W. Hauenstein: As the busiest business carrier of choice, Delta benefited from double-digit volume growth in this high-value segment with broad demand and growth across all sectors. Looking forward, demand for travel on Delta Airlines remains robust. Our core customer base is healthy, and demand for premium products continues to outperform the main cap. We expect the strong growth in business travel to continue, with 90% of companies in our recent corporate survey saying they intend to maintain or increase travel volumes in the second half of the year. International demand is strong and continues to benefit from demographic shifts, U.S. point-of-sale changes, and an extension of the leisure travel season.

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

Speaker Change: Looking forward, demand for travel on Delta remains robust. Our core customer base is healthy and demand for premium products continues to outperform the main cabin.

Speaker Change: We expect the strong growth in business travel to continue, with 90% of companies in our recent corporate survey saying they intend to maintain or increase travel volumes in the back half of the year.

Speaker Change: International demand is strong and continues to benefit from demographic shifts, U.S. point-of-sale changes, and an extension of the leisure travel season.

Glenn Hauenstein: As our international networking core hubs approach flow restoration and we return to a more normal cadence of retiring aircraft, Delta's capacity growth decelerates into the second half of the year. For the September quarter, we expect capacity growth of 5% to 6% and revenue growth of 2% to 4%. Total unit revenue is expected to sequentially improve each month. In domestic, we expect an inflection to positive unit revenue growth in the month of September. We also expect transatlantic unit revenue trends to improve into the fall. In Latin America, we expect unit revenue trends to progressively improve through the back half of the year.

Glen W. Hauenstein: As our international network and core hubs approach full restoration and we return to a more normal cadence of retiring aircraft, Delta's capacity growth decelerates into the second half of the year. For the September quarter, we expect capacity growth of 5% to 6% and revenue growth of 2% to 4%. Total unit revenue is expected to sequentially improve each month. In domestic, we expect an inflection to positive unit revenue growth in the month of September. We also expect transatlantic unit revenue trends to improve into the fall. And in Latin America, we expect unit revenue trends to gradually improve through the back half of the year.

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

Speaker Change: For the September quarter, we expect capacity growth of 5-6% and revenue growth of 2-4%. Total unit revenue is expected to sequentially improve each month.

Speaker Change: In domestic, we expect an inflection to positive unit revenue growth in the month of September .

Speaker Change: We also expect transatlantic unit revenue trends to improve into the fall.

Speaker Change: And in Latin America, we expect unit revenue trends to progressively improve through the back half of the year.

Daniel Janki: Lastly, in the Pacific, we are continuing to restore our network and are very pleased with the early results from our new service to Taipei and the success of our partnership with Korean Air. Pacific margins are maintaining at a meaningfully higher level than pre-pandemic due to our multi-year restructuring driving sustainable profitability. For the full year, we expect to deliver a sustained unit revenue premium, double-digit margins, and returns well in excess of our cost of capital.

Glenn Hauenstein: Lastly, in the Pacific, we are continuing to restore our network and are very pleased with the early results from our new service to Taipei and the success of our partnership with Korean Air. Pacific margins are sustaining at a meaningfully higher level than pre-pandemic due to our multi-year restructuring, driving sustainable profitability. For the full year, we expect to deliver a sustained unit revenue premium, double-digit margins, and returns well in excess of our cost of capital.

Speaker Change: Lastly, in the Pacific, we are continuing to restore our network and are very pleased with the early results from our new service to Taipei and the success of our partnership with Korean Air.

Speaker Change: Pacific margins are sustaining at a meaningfully higher level than pre-pandemic due to our multi-year restructuring driving sustainable profitability.

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

Glenn Hauenstein: Hospital. Our ability to deliver these outstanding results while the industry works to reestablish equilibrium reflects Delta's growing differentiation and leadership. In closing, I want to congratulate the Delta team for an outstanding first half of 2024.

Daniel Janki: Our ability to deliver these outstanding results while the industry works to reestablish equilibrium reflects Delta's growing differentiation and leadership. In closing, I want to congratulate the Delta team on an outstanding first half of 2024. We are well positioned to continue our momentum through the second half and for years to come. And with that, I'll turn it over to Dan to talk about the financials. Thank you, Glen, and good morning to everyone. For the June quarter, we delivered pre-tax income of $2 billion on a 15% operating margin.

Speaker Change: Our ability to deliver these outstanding results while the industry works to re-establish equilibrium reflects Delta's growing differentiation and leadership.

Speaker Change: In closing, I want to congratulate the Delta team for an outstanding first half of 2024. We are well positioned to continue our momentum through the second half and for years to come. And with that, I'll turn it over to Dan to talk about the financials. Thank you, Glen. And good morning to everyone.

Glenn Hauenstein: We are well positioned to continue our momentum through the second half and for years to come.

Daniel 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 June quarter, we delivered pre-tax income of $2 billion on a 15% operating margin. Earnings of $2.36 per share was in line with our guidance and in line with 2019, despite fuel prices that were more than 25% higher. Nonfuel chasm was up 0.6% year over year. More than one point better than gotten guidance primarily on stronger completion factor. A great operation is the foundation of a competitive cost structure. And in the June quarter, we delivered a 99.5% system completion factor, including 13 cancel-free brand perfect days.

Daniel Janki: For the June quarter, we delivered pre-tax income of $2 billion on a 15% operating margin.

Daniel Janki: Earnings of $2.36 per share was in line with our guidance and in line with 2019, despite fuel prices that were more than 25% higher. Non-fuel chasm was up 0.6% year over year, more than one point better than forecast, primarily on stronger completion factors. A great operation is the foundation of a competitive cost, and in the June quarter, we delivered a 99.5% system completion factor, including 13 cancel-free brand-perfect orders. For the first half, Delta has delivered 39 brand purchases, more than all of last year combined.

Daniel Janki: Earnings of $2.36 per share was in line with our guidance and in line with 2019 despite fuel prices that were more than 25% higher.

Daniel Janki: Non-fuel chasm was up 0.6% year-over-year.

Daniel Janki: More than one point better than guidance, primarily on stronger completion factor.

Daniel Janki: A great operation is the foundation of a competitive cost structure.

Daniel Janki: And in the June quarter, we delivered a 99.5% system completion factor, including 13 cancel-free, brand-perfect days.

Daniel Janki: For the first half, Delta has delivered 39 brand perfect days, more than all of last year combined. Fuel prices averaged $2.64 per gallon for the quarter. This included a 6 cent benefit from a refinery profit of 60 million. Fuel efficiency was 1.1% better than last year, benefiting from the continued renewal of our fleet and running a great operation. Operating cash flow in the first half was $4.9 billion. And after reinvesting $2.3 billion back into the business, we generated free cash flow of $2.7 billion. Strong cash generation has supported debt repayment of 2.1 billion year to date, including 900 million of early repayments.

Daniel Janki: For the first half, Delta has delivered 39 brand-perfect days.

Daniel Janki: More than all of last year combined.

Daniel Janki: Fuel prices averaged $2.64 per gallon for the quarter, and this included a 6 cent benefit from a refinery profit of $60 million. Fuel efficiency was 1.1% better than last year, benefiting from the continued renewal of our fleet and running a great operation. Operating cash flow in the first half was $4.9 billion.

Daniel Janki: Fuel prices average $2.64 per gallon for the quarter.

Daniel Janki: This included a $0.06 benefit from a refinery profit of $60 million.

Daniel Janki: Fuel efficiency was 1.1% better than last year, benefiting from the continued renewal of our fleet and running a great operation.

Daniel Janki: And after reinvesting $2.3 billion back into the business, we generated free cash flow of $2.7. Strong cash generation has supported debt repayment of $2.1 billion year-to-date, including $900 million of early repayment. Gross Leverage ended the quarter at 2.8%. We remain on track to repay $4 billion of debt this year and are committed to further strengthening our balance sheet with a focus on returning to full investment. Delta is currently investment grade rated at Moody's and Double B plus at both S&P and Fitch, with all agencies with a positive outcome, and with strong results and cash flow through the first half.

Daniel Janki: Operating cash flow in the first half was $4.9 billion, and after reinvesting $2.3 billion back into the business, we generated free cash flow of $2.7 billion.

Daniel Janki: Strong cash generation has supported debt repayment of $2.1 billion year-to-date.

Daniel Janki: Gross leverage ended the quarter at 2.8 times. We remain on track to repay $4 billion of debt this year and are committed to further strengthening our balance sheet with a focus on returning to full investment grade. Delta is currently investment grade rated at Moody's and double B plus at both S&P and Fitch, with all agencies with a positive outlook. With strong results and cash flow through the first half, we announced a 50% increase in our quarterly dividend.

Daniel Janki: including 900 million of early repayments.

Daniel Janki: Gross leverage ended the quarter at 2.8 times.

Daniel Janki: We remain on track to repay four billion dollars of debt this year and are committed to further strengthening our balance sheet with a focus on returning to full investment grade.

Daniel Janki: Delta is currently investment grade rated at Moody's and BB plus at both S&P and Fitch with all agencies with a positive outlook.

Daniel Janki: We are announcing a 50% increase in our quarterly dividends. This puts our annualized dividend yield at just over 1%, in line with the S&P 500. Now, moving to the September quarter guide. Combined with our outlook for top-line growth, we expect an operating margin of 11 to 13 percent and earnings of $1.70 to $2.00 per share. Fuel prices are expected to be $2.60 to $2.80 per gallon, including an approximately 5% contribution from the refinery.

Daniel Janki: With strong results and cash flow through the first half, we announced a 50% increase in our quarterly dividend.

Daniel Janki: This puts our annualized dividend yield at just over 1% in line with the S&P 500.

Daniel Janki: Now moving to the September quarter guidance. Combined with our outlook for top line growth, we expect an operating margin of 11 to 13% with earnings of $1.70 to $2 per share. Fuel prices are expected to be $2.60 to $2.80 per gallon, including approximately 5% contribution from the refinery. Finery margins have normalized, and profits are expected to be $60 million lower compared to the third quarter of last year. last year. Non-fuel unit costs are expected to be 1% to 2% higher than last year on 5% to 6% capacity growth. With normalized growth and consistency in delivering a great operation, we are making progress in driving efficiency and growing into our resources.

Daniel Janki: Now, moving to the September quarter guidance.

Daniel Janki: Combined with our outlook for top-line growth, we expect an operating margin of 11% to 13% with earnings of $1.70 to $2.00 per share.

Daniel Janki: Fuel prices are expected to be $2.60 to $2.80 per gallon, including an approximately 5% contribution from the refinery.

Daniel Janki: Finery margins have normalized, and profits are expected to be $60 million lower compared to the third quarter of last year. Non-fuel unit costs are expected to be 1% to 2% higher than last year on 5% to 6% capacity growth. With normalized growth and consistency in delivering a great operation, we are making progress in driving efficiency and growing into our research. On maintenance, the investment in fleet health we made since last summer is paying off, with maintenance cancellations in the first half down 77% over prior years.

Daniel Janki: Finery margins have normalized, and profits are expected to be $60 million lower compared to the third quarter of last year.

Daniel Janki: Non-fuel unit costs are expected to be 1-2% higher than last year on 5-6% capacity growth.

Daniel Janki: With normalized growth and consistency in delivering a great operation, we are making progress in driving efficiency and growing into our resources.

Daniel Janki: On maintenance, the investment in fleet health we made since last summer is paying off, with maintenance cancellations in the first half down to 77% over prior years. We continue to expect full-year maintenance expense to be up 350 million over 2023, as we progress through elevated volume of heavy airframe and engine checks and continue to manage industry-wide supply constraints. The majority of this increase was in the first half of the year, with second half maintenance expense expected to be similar on a year-over-year basis. Total non-fuel unit costs in the second half are expected to increase in low single digits, as we fund investments in our people and brand, and capacity growth decelerates.

Daniel Janki: On maintenance, the investment in fleet health we made since last summer are paying off, with maintenance cancellations in the first half down 77% over prior years.

Daniel Janki: We continue to expect full-year maintenance expense to be up $350 million over 2023 as we progress through an elevated volume of heavy airframe and engine checks and continue to manage industry-wide supply. The majority of this increase was in the first half of the year, with second half maintenance expense expected to be similar on a year-over-year basis.

Daniel Janki: We continue to expect full-year maintenance expense to be up $350 million over 2023, as we progress through elevated volume of heavy airframe and engine checks.

Daniel Janki: and continue to manage industry-wide supply constraints.

Daniel Janki: The majority of this increase was in the first half of the year, with second half maintenance expense expected to be similar on a year-over-year basis.

Daniel Janki: Total non-fuel unit costs in the second half are expected to increase in the low single digits as we fund investments in our people and brand and capacity growth decelerates. For the year, our fleet growth is expected to be less than 2%, including approximately 40 aircraft deliveries and 20 retirements. Our unencumbered asset base is expected to grow to $30 billion by year-end as we continue to pay cash for our new deliveries, and remain confident in our full-year outlook of earnings of $6 to $7 per share and free cash flow of $3 to $4 billion, with Foyer CAPEX expected to be 5.

Daniel Janki: Total non-fuel unit costs in the second half are expected to increase in low single digits as we fund investments in our people and brand and capacity growth decelerates.

Daniel Janki: For the year, our fleet growth is expected to be less than 2%, including approximately 40 aircraft deliveries and 20 retirements. Our unencumbered asset base is expected to grow to 30 billion by year-end, as we continue to pay cash for our new deliveries. Remain confident in our full-year outlook of earnings of $6 to $7 per share and free cash flow of $3 to $4 billion, with full-year CAPEX expected to be $5 billion.

Daniel Janki: For the year, our fleet growth is expected to be less than 2%, including approximately 40 aircraft deliveries and 20 retirements.

Daniel Janki: Our unencumbered asset base is expected to grow to $30 billion by year-end as we continue to pay cash for our new deliveries.

Daniel Janki: We remain confident in our full-year outlook of earnings of six to seven dollars per share and free cash flow of three to four billion.

Daniel Janki: With a continued focus on margin and returns to drive sustained cash flow generation, Delta is well positioned to improve our balance sheet to investment grade metrics and deliver shareholder value. In closing, Delta's industry-leading performance is a direct result of the hard work of our employees. I want to thank the Delta people for continuing to go above and beyond for our customers and each other every day.

Daniel Janki: with full year CapEx expected to be $5 billion.

Daniel Janki: With a continued focus on margin and returns to drive sustained cash flow generation, Delta is well positioned to improve its balance sheet to investment grade metrics and deliver shareholder value. In closing, Delta's industry-leading performance is a direct result of the hard work of our employees. I want to thank the Delta people for continuing to go above and beyond for our customers and each other every day. And with that, I'll turn it back to Ed for his final comment. Thank you, Dan.

Daniel Janki: In closing, Delta's industry-leading performance is a direct result of the hard work of our employees.

Daniel Janki: I want to thank the Delta people for continuing to go above and beyond for our customers and each other every day.

Ed Bastian: And with that, I'll turn it back to Ed for a final remark. Thank you, Dan.

Daniel Janki: And with that, I'll turn it back to Ed for a final remark. Thank you, Dan. And before we begin to Q&A, I want to personally recognize and congratulate Helane Becker on a very accomplished career as an analyst covering this industry for four decades.

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

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

Speaker Change: Helane, I have a great amount of respect for you and for all the work that you've done through the years.

Daniel Janki: And while I know you'll be continuing in an advisory role, we will miss working with you and wish you all the best. May the golf gods be good to you. Operator, please begin the Q&A.

Operator: Operator, please begin the Q&A. 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.

Operator: Operator, please begin the Q&A. Sure. 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 Change: Certainly. 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.

Operator: 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 one on your phone.

Operator: 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 themselves to one question and one follow-up question, then re-enter the queue. Again, if you have any questions or comments, please press star 1 on your phone. Your first question is coming from Conor Cunningham from Mellius Research. Your line is live. Hi everyone.

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

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

Speaker Change: Once again, if you have any questions or comments, please press star 1 on your phone.

Connor Cunningham: Your first question is coming from Connor Cunningham from Melius Research. Your line is live. Hi everyone, thank you, and yeah, congratulations. Good luck on the golf game. In terms of the comment on September for the U.S. domestic market, can you just help bridge the gap there? My guess is that you're pretty minimally booked for September. So is it just an industry supply getting better? It just, you know, given the discounting that's happening right now, it's just a little hard to wrap my head around. So just any thoughts that would be helpful. Thank you.

Speaker Change: Your first question is coming from Conor Cunningham from Mellius Research. Your line is live.

Conor T. Cunningham: Thank you. And yeah, congrats, Helane. Good luck with the golf game. In terms of the comment on September for the US domestic market, can you just help bridge the gap there? My guess is that you're pretty minimally booked for September. So is it just an industry supply getting better? Just, you know, given the discounting that's happening right now, it's just a little hard to wrap my head around. So any thoughts there would be helpful.

Conor T. Cunningham: Hi everyone, thank you, and yeah, congrats Helane, good luck on the golf game. In terms of the comment on the...

Conor T. Cunningham: on September for the U.S. domestic market. Can you just help bridge the gap there? My guess is that you're pretty minimally booked for September . So is it just an industry supply?

Conor T. Cunningham: Getting better. It just, you know, given the discounting that's happening right now, it's just a little hard to wrap my head around. So just any thoughts that would be helpful. Thank you.

Ed Bastian: Sure, Conor. I wouldn't say we are minimally booked. We probably have about a third of September bookings domestically on hand, so we have a good base. And the base we have is substantially better than the base we had going into July and August at minus 60 days. So we see a much better base. And then, of course, the core economics of the industry's capacity coming, continuing to come down and going back into a more normalized business season where business tends to take up from August to September. So I think when you think about one of our core strengths being business, July and August, that's not ever been peaked for business.

Glen W. Hauenstein: Thank you. Sure, Conor. I wouldn't say we are minimally booked. We probably have about a third of September bookings domestically on hand, so we have a good base, and the base we have is substantially better than the base we had going into July and August at minus 60 days. So we see a much better base, and then, of course, the core economics of the industry's capacity continuing to come down and going back into a more normalized business season where business tends to take off from August to September. So I think when you think about one of our core strengths being business, July and August, that's not ever been peak business season.

Conor T. Cunningham: Sure, Conor. I wouldn't say we are minimally booked. We probably have about a third of September bookings domestically on hand, so we have a good base.

Conor T. Cunningham: And the base we have is substantially better than the base we had going into July and August at minus 60 days. So we see a much better base and then of course the core economics of the industry's capacity continuing to come down and going back into a more normalized business season where business...

Conor T. Cunningham: Unknown Speaker ...tends to take up from August to September . So I think when you think about one of our core strengths being business, July and August , that's not...

Ed Bastian: So, as we move back into the business season, given the trends we've seen in business demand, we think that'll be another up list. So really confident about our September numbers and really confident that not only is domestically improving substantially, but international is also improving dramatically.

Glen W. Hauenstein: So as we move back into the business season, given the trends we've seen in business demand, we think that'll be another uplift. So really confident about our September numbers and really confident that not only is domestically improving substantially, but international is also improving dramatically. And then maybe the bigger picture.

Conor T. Cunningham: That's not ever been peaked for business, so as we move back into the business season, given the trends we've seen in business demand, we think that'll be another uplift.

Conor T. Cunningham: Really confident about our September numbers and really confident that not only is domestically improving substantially, but international is also improving dramatically.

Ed Bastian: Healthful.

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

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

Speaker Change: helpful and then maybe bigger picture you know the issue that we've been that we've been grappling with is just like the overall structure of the industry over the next couple years you know I get the idea that the current state of

Speaker Change: Unknown Speaker Industry margins need to change, you know, outside of you and United, but can you just give us, you know, how confident are you that there will actually be structural changes going forward? Because the pushback we get is that

Speaker Change: Unknown Speaker This is kind of just the same old industry that just continues to oversupply the market from time to time. So just any thoughts on the bigger industry picture there. Thank you.

Edward H. Bastian: So just any thoughts on the bigger industry, industry picture there? Thank you. I'll comment on the capacity, and then let Ed take the broader question. On capacity, I do think, listen, this is an industry that's always challenging itself to see how much capacity there can be in the marketplace. And, you know, I've been doing this for 40 years, and I've never seen the industry react so quickly to an oversupply. So we've really only been in an oversupply situation for a couple of months now, and the industry has already reacted. And I think that's very different than it was years ago, when it stayed for prolonged periods of time.

Ed Bastian: Thank you.

Ed Bastian: Well, I'll just comment on the capacity and then let it take the broader question. On capacity, I do think, listen, this is an industry that's always challenging itself where how much capacity can it be in the marketplace. And you know, I've been doing this for 40 years, and I've never seen the industry react so quickly to an oversupply. So we've really only been in an oversupply situation for a couple of months here. And the industry has already reacted. And I think that's very different than it was years ago, where it would stay for prolonged periods of time.

Speaker Change: Comment on the capacity and then let Ed take the broader question. On capacity, I do think, listen, this is an industry that's always challenging itself for how much capacity can it be in the marketplace.

Edward H. Bastian: And, you know, I've been doing this for 40 years and I've never seen the industry react so quickly to an oversupply. So we've really only been in an oversupply situation for a couple of months here, and the industry has already reacted. And I think that's very different than it was years ago where it would stay for prolonged periods of time.

Ed Bastian: So I'm really excited about how the industry is behaving at this point.

Glen W. Hauenstein: So I'm really excited about how the industry is behaving at this point. And for the broader question, I'll turn it back to Ed. Yeah, Conor, to Glen's point, the law of economics or physics, whatever you want to say, is going to have to work. You cannot, if you're on the lower end of the industry's food chain, continue to post losses, particularly given the health of the demand set we've all seen over these last couple of years. So I don't know what form that will take, but I guarantee you, and you're already starting to see, capacity is usually the first lever you have available, but there will be more levers available as well.

Ed Bastian: And for the broader question, I'll turn it back to F. Yeah, Connor, to Glenn's point, is a law of economics or physics. What I want to say is going to have to work. You cannot, if you're on the lower end of the industry's food chain, continue to post losses, particularly given the help that the demand set we've all seen over these last couple of years. So I don't know what form that will take, but I guarantee you, and you're already starting to see capacity is always the first, is usually the first thing that you lever you have available, but there will be more, more levers available as well.

Edward H. Bastian: So I'm really excited about how the industry is behaving at this point. And for the broader question, I'll turn it back to Ed. Yeah, Conor, to Glen's point, you know, the law of economics or physics, whatever you want to say, is going to have to work.

Speaker Change: You cannot...

Speaker Change: If you're on the lower end of the industry's food chain, continue to post losses, particularly given the health of the demand set.

Edward H. Bastian: We've all seen over these last couple of years, so I don't know what form that will take, but I guarantee you, and you're already starting to see, capacity is usually the first lever you have available, but there will be more levers available as well.

Edward H. Bastian: The health of the industry, broadly, is in pretty good shape. Now, I recognize what I just said; the lower half is struggling, but if you look at where we all need to go as an industry, we need to continue to better differentiate and provide value to our customers. Value in this industry for many years was defined as having the lowest fare in the market.

Ed Bastian: The health of the industry broadly is in pretty good shape. Now, I recognize what I just said; the lower half is struggling. But if you look at where we all need to go as an industry, is that we need to continue to better differentiate and provide value to our customers. Value in this industry for many years was defined as having the lowest fare in the market. That's changed, as changed dramatically. The experience economy that we've seen, that's taken hold, that's driven the high demand set that we are seeing and continue to see, and even with the third quarter revenue quote unquote disappointment, it's still going to be a record set of revenues that we're going to see this quarter, I'm convinced across the industry, is rewarding those that are providing real value, meaning a better quality experience, better value for money in terms of the product we're offering and reliability.

Edward H. Bastian: You know, the health of the industry broadly.

Edward H. Bastian: is in pretty good shape. Now, I recognize what I just said, the lower half is struggling.

Edward H. Bastian: But if you look at where we all need to go as an industry is that we need to continue to better differentiate and provide value to our customers. Value in this industry for many years was defined as having the lowest fare in the market. That's changed. That's changed dramatically.

Edward H. Bastian: That's changed. That's changed. The experience economy that we've seen that's taken hold has driven the high demand set that we are seeing and continue to see, and even with the third quarter revenue quote-unquote disappointment, it's still going to be a record set of revenues that we're going to see this quarter. I'm convinced that across the industry, the industry is rewarding those that are providing real value, meaning, you know, a better quality experience, better value for money in terms of the product we're offering, and reliability.

Edward H. Bastian: The experience economy that we've seen that's taken hold that's driven the high demand set that we are seeing and continue to see and even with

Edward H. Bastian: The third quarter revenue quote-unquote disappointment is still going to be a record set of revenues that we're going to see this quarter, I'm convinced, across the industry.

Edward H. Bastian: is rewarding those.

Edward H. Bastian: that are providing real value, meaning a better quality experience, better value for money in terms of the product we're offering, and reliability.

Ed Bastian: Couple that with the higher cost of entry, higher than we've ever seen, whether it's flavor, whether it's the constraints in the environment, the infrastructure, OEM, engine supply. This is turning into an industry that is going to be needing to return its cost to capital, or it will not be; those that don't will not be given the opportunity to continue to run the business models they have. So I realize I'm talking my own book, and I appreciate that there's a lot of other work that others need to lift. We're driving 50% of the overall industry profitability here at Delta.

Edward H. Bastian: Couple that with the higher cost of entry, higher than we've ever seen, whether it's labor, whether it's the constraints in the environment, the infrastructure, the OEM, engine supply; this is turning into an industry that is going to need to return its cost of capital or will not be; those that don't will not be given the opportunity to continue to run the business models they have. So, I realize I'm talking about my own book, and I appreciate that there's a lot of other work that others need to do.

Edward H. Bastian: This is turning into an industry that is going to be needing.

Edward H. Bastian: to return its cost of capital or it will not be...

Edward H. Bastian: Those that don't will not be given the opportunity to continue to run the business models they have.

Edward H. Bastian: I realize I'm talking my own book and I appreciate that there's a lot of other work that others need to lift. Listen, we're driving 50% of the overall industry profitability here at Delta.

Conor T. Cunningham: Listen, we're driving 50% of the overall industry profitability here at Delta. There's only so much more we can do on our own, and as things get better, Delta's only going to be a beneficiary. Great, thank you.

Ed Bastian: There's only so much more we can do on our own, and as things get better, Delta is only going to be a benefit.

Edward H. Bastian: There's only so much more we can do on our own, and as things get better, Delta is only going to be a beneficiary.

Ed Bastian: Jerry. Great.

Ed Bastian: Thank you.

Operator: Thank you. Your next question is coming from Savi Sith on Raymond James. Your line is live. Hey, good morning, everyone.

Sathy Siff: Your next question is coming from Sathy Siff from Raymond James. Your line is live. Hey, good morning, everyone. Just I think kind of the bowing challenges are well understood, but the update from Airbus a few weeks ago was surprising. I wonder if you could talk about, you know, how you're managing through supply chain issues and any early thoughts on how you're thinking things evolved in 2020. In terms of just managing the operation, but also in terms of planning for growth.

Speaker Change: Great, thank you.

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

Savanthi Nipunika Prelis: Just, I think kind of the Boeing challenges are well understood, but the update from Airbus a few weeks ago was surprising. And I wonder if you could talk about, you know, how you're managing through supply chain issues and any early thoughts on how you're thinking things will evolve in 2025, in terms of just managing the operation, but also in terms of kind of planning for growth. Savvy, this is Ed. I'll take that.

Savanthi Nipunika Prelis: Hey, good morning, everyone.

Savanthi Nipunika Prelis: I think the Boeing challenges are well understood, but the update from Airbus a few weeks ago was surprising. I wonder if you could talk about how you're managing through your supply chain issues and any early thoughts on how you're thinking things evolve in 2025 in terms of just managing the operation, but also in terms of planning for growth. Thank you.

Ed Bastian: Sathy, this is that I'll take that. Airbus, like Boeing, continues to have certain delivery challenges. Obviously, nowhere close to the challenges that Boeing has experienced. And as one of Airbus's largest and best customers, Delta again is insulated somewhat from that. We're going to take largely the delivery schedule that we anticipated for the year. Yes, some may slip, but you're talking about slip, meaning in terms of weeks and months, not years of delay. And as long as we have, as we do have pretty good notice of where the delays in delivery are coming. We'll be just fine in 20, 25.

Edward H. Bastian: You know, Airbus, like Boeing, continues to have certain delivery challenges, obviously nowhere close to the challenges that Boeing has experienced. And as one of Airbus's largest and best customers, Delta, again, is insulated somewhat from that. We're going to take largely the delivery schedule that we anticipated for the year. Yes, some may slip, but you're talking about slip meaning in terms of weeks and months, not years of delay.

Edward H. Bastian: Savvy, this is Ed, I'll take that. You know, Airbus...

Edward H. Bastian: Like Boeing, continues to...

Edward H. Bastian: Have certain certain delivery challenges obviously nowhere close to the challenges that Boeing

Edward H. Bastian: as experienced.

Speaker Change: And as one of Airbus's largest and best customers, Delta, again, is insulated somewhat from that. We're going to take...

Speaker Change: Largely the delivery schedule that we anticipated for the year. Yes, some may slip, but you're talking about slip meaning in terms of weeks and months, not years of delay. And as long as we have, as we do have, pretty good notice.

Edward H. Bastian: And as long as we have, as we do have pretty good notice of where the delays in delivery are coming, we'll be just fine. And in 2025, I don't anticipate us having any problems with the aircraft that we're going to need for the capacity we'd like to. I'm guessing, then on an operational standpoint, maybe not expecting any improvements either, just having just extra buffers will continue. Well, we have a large fleet, and our maintenance capabilities continue to improve.

Speaker Change: of where the delays in delivery are coming. We'll be just fine, and you know 2025, I don't anticipate us having any problems with the aircraft that we're going to need for the capacity we'd like to fly.

Ed Bastian: I don't anticipate us having any problems with the aircraft that we're going to need for the capacity we'd like to find.

Ed Bastian: And I'm guessing then, on an operational standpoint, maybe not expecting any improvements either, just having just extra buffers will continue. Well, we have a large fleet, and our maintenance capabilities continue to improve. You know, the challenge we face on the maintenance front tends to be more part supplied than anything else, as well as all these new engine platforms that are out there from the GTF to the LEAP to the trend stabilizing, but they continue to get better. And I think I think the opportunities for us, as things stabilize and as parts become more available, and as new aircraft continue to deliver, will be for us to resume the retirement of our older fleet, which we indicated really is already starting to do and which will create even more part of the ability back to our maintenance team.

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

Speaker Change: Well, we have we have a large fleet, and our maintenance capabilities continue to improve. You know, the challenge we face on the maintenance front tend to be more parts supply than anything else, as well as the all these new engine platforms that are out there from

Edward H. Bastian: You know, the challenge we face on the maintenance front tends to be more parts supplied than anything else, as well as all these new engine platforms that are out there, from the GTF to the lead to the Trent stabilizing, but they continue to get better. And I think the opportunities for us as things stabilize, and as parts become more available, and as new aircraft continue to deliver will be for us to resume the retirement of our older fleet, which we indicated in the release we're already starting to do, and which will create even more part availability for our maintenance. That's helpful.

Speaker Change: The GTF to the lead to the Trent stabilizing but they continue to get better and I think I think the opportunities for us

Speaker Change: As things stabilize and as parts become more available, and as new aircraft continue to deliver, will be for us to resume the retirement of our older fleet, which we indicated in the release we're already starting to do, and which will create even more part availability back to our maintenance team.

Sathy Siff: That's helpful. Thanks.

Savanthi Nipunika Prelis: Thanks. And if I might, Glen, ask you about on the Latin side, you mentioned kind of encouraging what we see what you're seeing there. I was kind of curious about the unit revenue pressure. Is that still coming from short haul with the long haul still largely flattish even despite the growth? And where are you expecting the improvement as you go through?

Glenn Hauenstein: And if I might go and ask about on the lap inside, you mentioned kind of encourage what we see what you're seeing there. I was kind of curious on the unit revenue pressure. Is that still coming from short haul with looking long haul still largely flat as she even despite the growth or how and what where you're expecting the improvement as you go through. Actually, a long haul south has inflicted to positive and it's remaining solidly positive throughout the third quarter here, so we're pretty excited about those results. And yes, still still not lapping the reduction capacity in the leisure short haul portfolio.

Speaker Change: That's helpful. Thanks, Ed. And if I might, Glen, ask about, on the Latin side, you mentioned, kind of, encourage what we see, what you're seeing there. I was kind of curious on the unit revenue pressure. Is that still coming from short-haul with, like, long-haul still largely flattish, even despite the growth? Or how, and where are you expecting the improvement as you go through?

Glen W. Hauenstein: Actually, Long Haul South has inflected to positive, and it's remaining solidly positive throughout the third quarter here, so we're pretty excited about those results. And yes, still not lapping the reduction in capacity in the leisure short haul portfolio, but that is in play, and it looks like the industry is going to be much more disciplined in terms of capacity levels this winter versus last winter. So we're looking at really positive momentum for that moving forward in that continuum. I appreciate it.

Glen W. Hauenstein: Actually, Long Haul South has inflected to positive, and it's remaining solidly positive throughout the third quarter here, so we're pretty excited about those results.

Speaker Change: Still not lapping the reduction in capacity in the leisure.

Sathy Siff: But that is in play, and it looks that the industry is going to be much more disciplined in terms of capacity levels this winter versus last winter, so we're looking at really positive momentum of that moving forward and that continuing. I appreciate it. Thank you.

Speaker Change: Short Haul Portfolio. But that is in play and it looks that the industry is going to be much more disciplined in terms of capacity levels this winter versus last winter. So we're looking at really positive momentum of that moving forward and that continuing.

Savanthi Nipunika Prelis: Thank you. Thank you. Your next question is coming from Jamie Baker from J.P. Morgan. Your line is live. Oh, good morning, everybody.

Speaker Change: I appreciate it. Thank you.

Jamie Baker: Your next question is coming from Jamie Baker from JP Morgan. Your line is live. Good morning, everybody. So Glenn, you know, this concept of unbundling the front cabin is one that I've been thinking about, in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others.

Speaker Change: Thank you. Your next question is coming from Jamie Baker from J.P. Morgan. Your line is live.

Jamie Nathaniel Baker: So, Glen, you know, this concept of unbundling the front cabin is one that I've been thinking about in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others. I want to be careful about, you know, asking about future pricing and all that, but I'm curious what the pros and cons are in terms of possibly going down this path, or is one price for all how we should continue to think about the D1 cabin?

Jamie Nathaniel Baker: Oh, good morning, everybody. So, Glen, you know, this concept of unbundling the front cabin is one that I've been thinking about in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others.

Glenn Hauenstein: I want to be careful about, you know, asking about future pricing on that, but I'm curious what the pros and cons are in terms of possibly going down this path or is one price for all how we should continue to think about the D1 cabin. I think you're going to have to come to Investor Day to hear more about that. We've talked conceptually about that. I think we'll be giving you more details as we get, but we're not ready to talk about the details of those plans moving forward. I think Investor Day this year should be very exciting.

Jamie Nathaniel Baker: I want to be careful about, you know, asking about future pricing and all that, but I'm curious what the pros and cons are in terms of possibly going down this path, or is one price for all how we should continue to think about the D1 cabin?

Jamie Nathaniel Baker: I think you're going to have to come to Investor Day to hear more about that. We have, you know, we've talked conceptually about that. I think we'll be giving you more details as we get closer, but we're not ready to talk about the details of those plans moving forward. I think Investor Day this year should be very exciting. I'm confident I will work it into my schedule.

Speaker Change: I think you're going to have to come to Investor Day to hear more about that.

Speaker Change: We have, you know, we've talked conceptually about that. I think we'll be giving you more details as we get, but we're not ready to talk about the details of those plans moving forward. I think Investor Day this year should be very exciting.

Glen W. Hauenstein: And then, you know, maybe maybe for Ed or for Glen, but you know, at a high level, it seems that those airlines that are currently under duress are sort of beginning to lean into premium, and maybe premium is too strong of a term. But you know, some of the more punitive ancillary charges, like change fees, are disappearing, there's an option for an empty middle seat, and Southwest has said they're looking at some sort of enhancement to their product. I'm just curious if this is something you and the team think about. The conventional wisdom is that premium spoils belong to Delta.

Jamie Baker: I'm confident I will work it into my schedule.

Speaker Change: I'm confident I will work it into my schedule. And then, you know, maybe for Ed or for Glen, but, you know, at a high level, it seems that those airlines that are currently under duress,

Jamie Baker: And then maybe for Edward or for Glen, but at a high level it seems that those airlines that are currently under duress are sort of beginning to lean into premium, and maybe premium is too strong of a term. But you know, some of the more punitive and salary charges, you know, change fees are disappearing. There's an option of a, you know, empty middle seat. Southwest has said they're looking at some sort of enhancement to their product. I'm just curious if this is something you and the team think about. The conventional wisdom is that premium spoils belong to Delta.

Speaker Change: are sort of beginning to lean into premium and maybe premium is too strong of a term but you know some of the more punitive ancillary charges.

Speaker Change: You know, change fees are disappearing, there's an option of an empty middle seat. Southwest has said they're looking at some sort of enhancement.

Speaker Change: I'm just curious if this is something you and the team think about, the conventional wisdom is that

Jamie Nathaniel Baker: But what we're seeing today is that Delta is not entirely isolated from low-end overcapacity. I'm just thinking down the road if we could find Delta isn't as isolated from, let's call it, pseudo premium overcapacity. Any thoughts there? Thanks in advance.

Ed Bastian: But what we're seeing today is that Delta is not entirely isolated from low-end overcapacity. I'm just thinking down the road if we could find Delta isn't as isolated from. Let's call it pseudo premium over capacity. Any thoughts there? Thanks in advance. Well, Jamie, as a, as a good question, it's certainly something that we, we all look at. Premium is more than just putting more seats, or excuse me, more, more room in seats. And it's the overall experience. And yes, I think all of those experiments that we hear about some of the lower fair airlines or the discount airlines are considering. You can't blame them.

Speaker Change: Premium spoils belong to Delta, but what we're seeing today is that Delta is not entirely isolated from low-end overcapacity. I'm just thinking down the road if we could find Delta isn't as isolated from...

Speaker Change: Let's call it pseudo-premium overcapacity. Any thoughts there? Thanks in advance.

Edward H. Bastian: Well, Jamie, it's a good question. It's certainly something that we all look at. Your premium is more than just putting more seats, or, excuse me, more, more room in the seats. And it's the overall experience, right? And, yes, I think all of those experiments that we hear about.

Speaker Change: Well, Jamie, that's a good question, and it's certainly something that we all look at. You know, premium is more than just...

Speaker Change: putting more seats, excuse me, more room in seats. And it's the overall experience, right? And yes, I think all of those experiments that we hear about.

Speaker Change: Some of the lower fare airlines or the discount airlines are considering. You can't blame them. I would, if I was them, consider some of those as well.

Ed Bastian: I would, if I was them, consider some of those as well. But premium is also based on a foundation of overall reliability and service first and foremost. And that's what we have focused on and specialized in and done better over the last 15 years in any airline. And we continue to get better. In fact, the operations we've run this year are the best in the industry across every measure, every month, month in and month out. That gives you then freedom to actually deliver true premium experience as compared to somewhat, you know, maybe more superficial experience.

Edward H. Bastian: So some of the lower-fare airlines or the discount airlines are considering, you can't blame them; I would, I would, if I were them, consider some of those as well. But, Premium is also based on a foundation of overall reliability and service, first and foremost. And that's what we have focused on and specialized and done better than any airline in the last 15 years, and we continue to get better. In fact, the operations we've run this year are the best in the industry across every measure, every month, month in and month out.

Speaker Change: Premium is also based on...

Speaker Change: A Foundation of Overall Reliability and Service, first and foremost, and that's what we have.

Speaker Change: focused on and specialized and done better over the last 15 years in any airline and we continue to get better. In fact, the operations we've run this year.

Speaker Change: are the best in the industry across every measure, every month, month in and month out.

Edward H. Bastian: That gives you the freedom to actually deliver a true premium experience as compared to, you know, maybe a more superficial experience. And, you know, that to me is what we're best at. That's why business travelers choose Delta. That's why we have the opportunities internationally that we do. That's why American Express, the top credit card provider in the world, in my opinion, chooses Delta as its exclusive partner.

Speaker Change: That gives you then freedom to actually deliver true premium experience as compared to...

Ed Bastian: And, you know, that, that to me is what we're best at. That's why business travelers choose Delta. That's why we have the opportunities internationally that we do. That's why American Express, top credit card provider in the world, in my opinion, chooses Delta as their exclusive partner. So, I think there's room for more. And I would, you know, the industry needs to continue to find better, better ways in which to manage the higher cost that they're facing. Remember the cost to serve has gone over everybody, but especially for the discounters. And the only way you can cover that is providing a better experience.

Speaker Change: somewhat, you know, maybe more superficial experience. And, you know, that, that, to me, is what we're best at. That's why business travelers choose Delta. That's why we have the opportunities internationally that we do. That's why American Express.

Speaker Change: The top credit card provider in the world, in my opinion, chooses Delta as their exclusive partner.

Jamie Nathaniel Baker: So I think there's room for more. And I would say, you know, the industry needs to continue to find better ways in which to manage the higher costs that they're facing. Remember, the cost to serve has gone up for everybody, but especially for the discounters. And the only way you can cover that is by providing a better experience. That's great, Ed. Thank you very much for that response. Take care.

Speaker Change: So, I think there's room for more and the industry needs to continue to find better ways in which to manage the higher cost.

Speaker Change: that they're facing. Remember the cost to serve has gone up for everybody but especially for the discounters and the only way you can cover that is providing a better experience.

Jamie Baker: That's great. Thank you very much for that response. Take care. See you at the industry.

Jamie Nathaniel Baker: See you at Investor Day. Thank you. The next question is coming from Tom Fitzgerald from TD. Your line is live. Hi, everyone. Thanks very much for your time.

Speaker Change: That's great, Ed. Thank you very much for that response. Take care. See you at InVESTorDay.

Thomas Fitzgerald: Thank you. This question is coming from Tom Fitzgerald from TD. Your line is live. Hi, everyone. Thanks very much for the time.

Speaker Change: Thank you. Next question is coming from Tom Fitzgerald from TD. Your line is live.

Thomas John Fitzgerald: So sticking with the premium cabin for a little bit, would you mind just unpacking some of the trends in the first half and outlook in the second half just among the different buckets like D1, premium select, domestic first class, and comfort plus, paid load factors, booking, anything else notable you'd call out? Thanks. That's a lot.

Glenn Hauenstein: So, sticking with the premium cabin for a little bit, would you mind just unpacking to some of the trends in the first half and outlook in the second half just among the different buckets like D1, premium select, domestic first class, and comfort plus paid load factors, booking, anything else notable you'd call out. Thanks. That's a lot.

Tom Fitzgerald: Hi everyone, thanks very much for the time. So sticking with the premium cabin for a little bit, would you mind just unpacking some of the trends in the first half and outlook in the second half, just among the different buckets like D1, premium select?

Speaker Change: Domestic First Class and Comfort Plus, Payload Factors, Booking, anything else notable you'd call out. Thanks.

Glen W. Hauenstein: I think what we're very excited about this year is this is the first year that we have Ubiquiti and Delta Premium Select, and that program has exceeded our internal expectations with load factors in the mid to high 80s and fare structures that are more than 2x what coach fares are. So really great margins there, great margins continuing in D1, and domestic first leading the pack in the domestic industry. We're really excited to start rolling out DPS in the trans-cons this fall with all of our JFKLA For those of you who are wondering, I'll follow this industry.

Glenn Hauenstein: I think what we're very excited about this year is this is the first year that we have Ubiquity and Delta Premium Select and that that program has exceeded our internal expectations with load factors in the mid to high 80s and fair structures that are more than 2x what coach fairs are, so really great margins there, great margins continuing in D1 domestic first, leading the pack in domestic industry. We're really excited to start rolling out DPS in the trans cons this fall with all of our JFK LA. For those who follow this industry, the largest revenue market in the country is JFK LA, and having a full suite of products in that marketplace we think will be very accretive. We're outselling it now in September; October advances already look very strong there, so I think continuing that elevation, the margins continue to be really in sequence with the best products continuing to have the highest margin.

Speaker Change: That's a lot. I think what we're very excited about this year is this is the first year that we have Ubiquiti and Delta Premium Select.

Speaker Change: and that.

Speaker Change: That program has exceeded our internal expectations with load factors in the mid to high 80s and fare structures that are more than 2x what coach fares are.

Speaker Change: Really, great margins there, great margins continuing in D1, domestic first, leading the pack in domestic industry. We're really excited to start rolling out DPS in the trans-cons this fall with all of our JFKLA, for those of you who...

Glen W. Hauenstein: The largest revenue market in the country is JFK LA, and having a full suite of products in that marketplace, we think will be very accretive. And we're out selling it now in September; October advances already look very strong there. So I think by continuing that elevation, the margins continue to be really in sequence with the best products continuing to have the highest margins and the main cabin coach having the lowest. That's really helpful. Thanks for that color, Glen.

Speaker Change: Follow this industry the largest revenue market in the country is JFK LA and having a full suite of products

Speaker Change: In that marketplace, we think we'll be very accretive, and we're out selling it now, and September-October advances already look very strong there, so I think continuing that elevation, the margins continue to be really in sequence with the best products continuing to have the highest margins and the main cabin coach having the lowest margins.

Glenn Hauenstein: And the main cabin coach having the lowest margins.

Glenn Hauenstein: That's really helpful, thanks for that color, Glenn. And just quickly, if I may, one for Dan: how should we think about this topic for the whole industry, I think, but just how are you and the team thinking about the PSP loans resetting to a variable rate, I think it's so for plus two in 2025 and in 2026, and just in the context of the broader. Deliveraging story; thanks again for the time. Yes, as you know, we continue to focus on the leveraging. We've made a lot of progress since October 20, 24 billion dollars of debt, so.

Thomas John Fitzgerald: And just quickly, if I may, one for Dan: how should we think of, and this is a topic for the whole industry, I think, but just how are you and the team thinking about the PSP loans resetting to a variable rate? I think it's SOFR plus two in 2025 and 2026, just in the context of the broader deleveraging story. Thanks again for your time.

Speaker Change: That's really helpful. Thanks for that color, Glen. And just quickly, if I may, one for Dan. How should we think about, and this is a topic for the whole industry, I think, but just how are you and the team thinking about the PSP loans resetting to a variable rate? I think it's SOFR plus two in 2025 and 2026, and just in the context of the broader deleveraging story. Thanks again for the time.

Daniel Janki: Yes, as you know, we continue to focus on deleveraging. We've made a lot of progress since October 20, when we took off $24 billion of debt. So deleveraging will continue to be at the forefront. When you think about those particular tranches, our first one doesn't, do its April second quarter of next year, and then we have another tranche in the first quarter and second quarter of 2026. We'll look at market conditions at that point in time, where we are on short-term rates versus long-term rates, and whether that would be a long-term part of the capital structure, or it makes more sense to put in other types of debt and refinance that out.

Daniel Janki: Yes. As you know, we continue to focus on deleveraging. We've made a lot of progress since October of 20, $24 billion of debt. So deleveraging will continue to be at the forefront. When you think about those particular tranches, our first one doesn't come due. It's April second quarter of next year, and then we have

Daniel Janki: Deliveraging will continue to be at the forefront when you think about those particular tranches. Our first one doesn't come. Do it April 2nd quarter of next year, and then we have another tranche in first quarter and second quarter of 2026. We'll look at market conditions at that point in time where we are on short-term rates versus long-term rates and whether that would be a long part of the capital structure it makes more sense to put in. We'll probably talk more about in detail as we get closer, especially at Investor Day, but as we get to the end of the year and the beginning of next year.

Daniel Janki: Another tranche in first quarter and second quarter of 2026.

Daniel Janki: We'll look at market conditions at that point in time, where we are on short-term rates versus long-term rates and whether that would be a long-term part of the capital structure or it makes more sense to put in

Daniel Janki: Other types of debt and refi that out and those will be things that we'll probably talk more about in detail as we get closer Especially at investor day, but as we get to the end of the year in the beginning of next year

Michael Linenberg: Thank you. Your next question is coming from Mike Linenberg from Deutsche Bank. Your line is live. Oh hey, good morning everyone. I guess this is the question to Dan, even the team. You know, it's always very helpful when you guys call out where your air traffic liability is and how much it's up, at least since your end. I sort of think we're at a point in the year we're over the next few weeks that's going to shift the other way, and I think it's going to be a bit more pronounced for some of those who maybe have a more seasonal northern hemisphere type route network.

Daniel Janki: And those will be things that we'll probably talk more about in detail as we get closer, especially at Investor Day, but as we get to the end of the year and the beginning of, Thank you. Your next question is coming from Mike Linenberg from Deutsche Bank. Your line is live. Oh, hey, good morning, everyone. I guess this is a question for Dan and even the team.

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

Michael John Linenberg: You know, it's always very helpful when you guys call out where your air traffic liability is, how much it's up, at least since year end. I sort of think we're at a point in the year where, over the next few weeks, that's going to shift the other way, and I think it's going to be a bit more pronounced for some of those who maybe have a more extensive route network.

Michael John Linenberg: Oh hey, good morning everyone. I guess this is a question to Dan and even the team. You know it's always very helpful when you guys call out where your air traffic liability is.

Michael John Linenberg: how much it's up at least since year end. I sort of think we're at a point in the year where over the next few weeks that's going to shift the other way and I think it's going to be a bit more pronounced for some of those who maybe have a more seasonal

Michael John Linenberg: When I think about, you know, maybe Glen, you talk about the extension of the like transatlantic and also the strength that you're seeing in deep South America and how that's going to improve in the back part of the year combined with corporate. How should we think about your swing?

Daniel Janki: When I think about you know maybe Glenn you talk about the extension of like transatlantic and also the strength that you're seeing you know the deep south America and how that's going to improve in the back part of the year combined with corporate. How should we think about your. in your air traffic liability.

Michael John Linenberg: Northern Heaven

Speaker Change: When I think about, you know, maybe, Glen, you talk about the extension of, like, Trans-Atlantic

Speaker Change: Deep South America and how that's going to improve in the back part of the year combined with corporate. How should we think about your swing?

Daniel Janki: I mean, in the past, it used to be a much bigger hit on cash. But I think for you guys, like, what should we think about it? Well, through the first half, it is up, you can see it. It's up $2.4 billion. It's up a few hundred million dollars over last year, which supports, you know, our revenue forecast for the third quarter. As you get into the back half of the year, certainly the elongation of Unknown Attendee, Daniel Janki, Alison Sider, Mary Schlangenstein, David Vernon, Edward Bastian, Daniel Janki, Helane Becker, Savanthi Prelis, Tim Mapes, Delta Air Lines Inc.

Daniel Janki: I mean, in the past, it used to be a much bigger hit to cash, and I still think for some carriers it's going to be a bit of a wake-up cause we get into the back half of the year. But I think for you guys, how should we think about it and maybe some of the measures that you've done to sort of mitigate that? Thanks, and I have a follow-up. Through the first half, it is up; you can see it's up $2.4 billion, it's up a few hundred million dollars over last year. It supports our revenue forecast for third quarter.

Speaker Change: in your air traffic liability. I mean, in the past, it used to be a much bigger hit to cash. And I still think for some carriers, it's going to be a bit of a wake-up call as we get into the back half of the year. But I think for you guys, like, how should we think about it and maybe some of the, you know, measures that you've done to sort of mitigate that? Thanks, and I have a follow-up.

Speaker Change: Well, through the first half, it is up, you can see it's up $2.4 billion. It's up a few hundred million dollars over last year, where it supports, you know, our revenue forecast for third quarter.

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

Speaker Change: As you get into the back half of your, certainly the elongation of the.

Speaker Change: that tattled.

Speaker Change: season helps as it relates to balance that as you go through third quarter and into fourth quarter, and also the fact that corporate continues to outgrow consumer. That is also bringing it back into what I'd say is more normalized.

Speaker Change: as it relates to historical perspective. When you look at it year over year, you've still got

Daniel Janki: So this is the first year that it's much cleaner as we go through and create a better base. As you think about it for 24 and 25 and start to evaluate it. Great. And then just my second question, I think, Dave or Glenn, you talked about capacity cuts being one of the first levers that we'll see from other carriers. As we think about where they cut back and maybe certain airports in particular, is there an opportunity maybe for you to kick up additional gate space and in some of your bigger airports, I sort of think some of the cutbacks coming back, potentially in Atlanta or Orlando opportunities where, you know, where things are tight, you'll get additional real estate.

Speaker Change: The oddity of last year, you had multiple years of travel credit, so this is the first year that it's much cleaner as we go through and create a better base as you think about it for 24 and 25 and start to evaluate it.

Daniel Janki: Great, and then just my second question, you know, I think Ed or Glen talked about capacity cuts being one of them. Other carriers, as we think about, you know, where they cut back and maybe certain airports in particular, is there an opportunity maybe for you to pick up additional gate space in some of your bigger airports? I sort of think some of the cutsbacks are coming back, you know, potentially in Atlanta, and Orlando, opportunities where, you know, where things are tight, you'll get additional real estate. Any thoughts on that?

Speaker Change: Great. And then just my second question, you know, I think, Ed or Glen, you talked about, you know, capacity cuts being one of the first levers.

Speaker Change: and others that we'll see.

Speaker Change: from

Speaker Change: Other carriers.

Speaker Change: As we think about, you know, where they cut back and maybe certain airports in particular.

Speaker Change: Is there an opportunity maybe for you to pick up additional gate space in some of your bigger airports? I sort of think of some of the cutbacks coming back, you know, potentially in Atlanta, Orlando. Opportunities where, you know, where things are tight, you'll get additional real estate. Any thoughts on that? Thanks.

Michael Linenberg: Any thoughts on that? Thanks. Thanks, Mike.

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

Ed Bastian: Listen, all I can say on that is we're always interested in serving underserved communities. Okay. Very good. Thank you.

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

Michael John Linenberg: Very good. Thank you. Your next question is coming from Scott Group from Wolf Research. Your line is live. Hey, thanks. Good morning.

Scott Group: Your next question is coming from Scott Group from Wolf Research. Your line is live. Hey, thanks. Good morning. So we've talked a lot about just the overall industry capacity. I look, but I want to try and get a little bit of delta color. So your capacity was up 8% in the second quarter; you're saying 5% to 6% in the third quarter.

Speaker Change: Thank you. Your next question is coming from Scott Group from Wolf Research. Your line is live.

Scott H. Group: So we've talked a lot about just the overall industry capacity outlook, but I want to try and get a little bit of Delta color, right? So your capacity was up 8% in the second quarter, you're saying 5 to 6% in the third quarter, I guess. Any color you can share on your capacity plans entering 2025, just to help get the industry supply and demand more in balance. Do you anticipate getting to GDP or sub-GDP type capacity growth?

Scott H. Group: Hey, thanks. Good morning. So we've talked a lot about just the overall industry capacity outlook, but I want to try and get a little bit of Delta color, right? So your capacity was up 8% in the second quarter, you're saying 5% to 6% in the third quarter, I guess.

Scott Group: I guess any color you can share on your capacity plans entering 2025. Just to help get the industry supply demand more in balance, do you anticipate getting to a GDP or sub GDP type capacity growth, or do you think you, as you plan for Delta specifically, do you think you stay above GDP?

Scott H. Group: Any color you can share on your capacity plans entering 2025 just to help get the industry supply demand more in balance. Do you anticipate getting to a GDP or sub-GDP type capacity growth or do you think you

Glen W. Hauenstein: Or do you think you, as you plan for Delta specifically, do you think you will stay above? I think we're not going to give capacity growth for 2025 at this point. We've got a lot of runway left this year. I would point out one thing that I think is really important that we ought to just note is the difference between seats and ASF. Many of you work your models on ASMs, others work on seats, and I would think when you're looking within an entity, it's really the seat count that is most important because we don't sell ASMs; we sell seats.

Scott H. Group: As you plan for Delta specifically, do you think you stay above?

Scott Group: I think we're not going to give capacity growth for 2025 at this point. We've got a lot of runway left in this year. I would point out one thing that I think is really important that we ought to just note is that the difference between seats and ASMs. And many of you work your models on ASMs; others work on seats. And I would think when you're looking within an entity, it's really the seat count that is most important because we don't sell ASMs; we sell seats. And when you think about our capacity growth, although it was eight, we only grew our seats at about five or less.

Speaker Change: I think we're not going to give capacity growth for 2025 at this point. We've got a lot of runway left in this year. I would point out one thing that I think is really important that we ought to just note is that the difference between seats and ASMs.

Speaker Change: And many of you work your models on ASMs, others work on seats, and I would think when you're looking within an entity, it's really the seat count that is most important because we don't sell ASMs, we sell seats.

Glen W. Hauenstein: And when you think about our capacity growth, although it was eight, we only grew our seats by about five or less. So there's a stage length difference, and our stage length is actually a little bit longer than we had in the plan because we saw some opportunities on some of the longer-haul flying as people restructured through the year. So I call it back to let's not talk about ASMs; let's talk about seats within the theater.

Speaker Change: And when you think about our capacity growth, although it was eight, we only grew our seats at about five or less.

Scott Group: So there's a stage length difference, and our stage length is actually a little bit longer than we had in the plan because we saw some opportunities on some of the longer haul flying as people restructured through the year. So I call it back to, let's not talk about ASMs. Let's talk about seats within theater. So I think that's a much better representation of what the industry is facing and when we ought to all key in on as we move forward in trying to figure out where the industry is going.

Speaker Change: So there's a stage length difference, and our stage length is actually a little bit longer than we had in the plan because...

Speaker Change: We saw some opportunities on some of the longer haul flying as people restructured through the year.

Speaker Change: So, I call it back to, let's not talk about ASMs, let's talk about seats within theater. So, I think that's a much better representation of what the industry is facing and one we ought to all...

Glen W. Hauenstein: So I think that's a much better representation of what the industry is facing, key in on as we move forward and try to figure out where the industry is going. So, too early for 25 in terms of capacity, but that will be clearly. Over the back half of the year, we'll reveal more about that. But secondly, try to think about seats as our measure domestically is what we're trying to sell. The thing I'd add to that, Brian, is that 80% of that domestic capacity growth is going into our core hubs.

Speaker Change: key in on.

Scott Group: So too early for 25 in terms of capacity, that'll be clearly... over the back half of the year, we'll reveal more about that. But secondly, try to think about seats as our measure domestically is what we're trying to sell. And the thing I'd add on to that plan is that 80% of that domestic capacity growth is going into our core hubs, and to Glen's point, an important point on seats, as we get into the back half of this year, at 4th quarter is the first time we'll have our core hubs restored to levels that they were from a seat perspective versus 2019.

Speaker Change: as we move forward in trying to figure out where the industry is going.

Speaker Change: Over the back half of the year, we'll reveal more about that, but secondly, try to think about seats as our measure domestically is what we're trying to sell.

Speaker Change: The thing I'd add on to that is that 80% of that domestic capacity growth is going into our core hubs. And to Glen's point, important point on seeds, as we get into the back half of this year and fourth quarter is the first time we'll have our core hubs.

Glen W. Hauenstein: And to Glen's point, an important point on seeds, as we get into the back half of this year and the fourth quarter is the first time we'll have our core hubs, and we restored the levels that they were from a sea perspective versus 2019, but still, versus 19, we are the least restored in terms of sea levels.

Speaker Change: Restored to levels that they were from a seat perspective versus 2019. Still versus 19, we are the least restored in terms of seats. Yes.

Scott Group: Still versus 19, we are the least restored in terms of seats.

Daniel Janki: Okay. And then Dan, I just want to, when I think about the guide, right, if I just take the midpoint of the Q3 guide, and then the midpoint of the full year guide, it basically implies fourth quarter earnings, just absolute earnings pretty similar with the third quarter, and that's pretty typical. Right, it's usually we usually see a step down any color on how to think about that dynamic this year.

Scott H. Group: Okay. And then, Dan, I just want to, when I think about the guide, right, if I just take the midpoint of the Q3 guide and then the midpoint of the full year guide, it basically implies fourth quarter earnings, just absolute earnings, pretty similar to the third quarter. And that's pretty atypical, right?

Speaker Change: Okay. And then, Dan, I just want to, when I think about the guide, right, if I just take the midpoint of the Q3 guide and then the midpoint of the full-year guide.

Speaker Change: It basically implies fourth quarter earnings, just absolute earnings, pretty similar with the third quarter. And that's pretty atypical, right? We usually see a step down. Any color on how to think about that dynamic this year might be different.

Daniel Janki: Might might be different. Yeah, well, fourth quarter on last year was the only quarter we were down year over year.

Daniel Janki: It's usually, we usually see a step down. Any color on how to think about that dynamic this year might be different? Yeah, well, the fourth quarter last year was the only quarter we were down year over year.

Daniel Janki: Yeah, well, fourth quarter on last year was the only quarter we were down year over year. You also had very high fuel in the fourth quarter last year of $3.

Daniel Janki: You also had very high fuel prices in the fourth quarter last year at $3. The current, we'll have to see where that plays out, but the current forward of that is much lower. So you get that benefit.

Daniel Janki: You also had very high fuel in the fourth quarter last year of $3. The current will have to see where that plays out, but the current forward of that is much lower, so you get that benefit. And I think it's also really guards to the components that Glenn talked about is the inflection and unit revenue as you exit September, moving positive and the elongated travel season in that strong international demand.

Scott H. Group: And I think it's also with regard to the components that Glenn talked about, the inflection in unit revenue as you exit September, moving positive, and the elongated travel season and that strong international demand. Thank you, guys. I appreciate it.

Daniel Janki: The current, we'll have to see where that plays out, but the current forward of that is...

Daniel Janki: is much lower, so you get that benefit. And I think it's also with regards to the components that Glen's talked about is the inflection in unit revenue as you exit September , moving positive, and the elongated travel season and that strong international demand.

Daniel Janki: Thank you guys, appreciate the time. Thank you.

Speaker Change: Thank you guys, appreciate the time.

Sheila Karin Kahyaoglu: Thank you. Your next question is coming from Sheila Kahyaoglu from Jeffries. Your line is live. Good morning, and thank you guys. Maybe just take the last two questions and put them together.

Sheila Kahyaoglu: Your next question is coming from Sheila Kaya Glue from Jeffries. Your line is live. Good morning, and thank you guys. Maybe just taking the last two questions and putting it together, your Q4 guide is a bit wide. And how do you think about the industry capacity issues? Does it get better? Does it get more rational? Or does it get worse than 25 at selling? Gets the delivery cadence back?

Speaker Change: Thank you. Your next question is coming from Sheila Kahyaoglu from Jeffreys. Your line is live.

Sheila Karin Kahyaoglu: Your Q4 guide is a bit wide. And how do you think about the industry capacity issues? Does it get better?

Sheila Karin Kahyaoglu: Good morning and thank you guys. Maybe just taking the last two questions and putting it together. Your Q4 guide is a bit wide.

Sheila Karin Kahyaoglu: And how do you think about the industry capacity issues? Does it get better? Does it get more rational? Or does it get worse in 25 if Boeing gets a delivery cadence back?

Ed Bastian: Sheila, hi, this is Ed. I just want to be clear; we haven't given explicit Q4 guidance, so I appreciate your models driving us there. We still have our full year guide with a pretty wide range, as you noted in there. You may recall last year at this time, when things were really starting to look promising. We up to our full year guide and we got punished a few months later as the fuel guides worked against us.

Edward H. Bastian: Does it get more rational? Or does it get worse in 25 or so and get the delivery cadence back? Sheila, hi, this is Ed. I just want to be clear; we haven't given an explicit Q4 guide. So I appreciate your models driving us there. We still have our full-year guide with a pretty wide range, as you noted in. You may recall last year, at this time, when things were really starting to look promising, we upped our four-year guide, and we got punished.

Edward H. Bastian: Sheila, hi, this is Ed. I just want to be clear, we haven't given an explicit Q4 guide, so I appreciate your models driving us there. We still have our full year guide with a pretty wide range, as you noted in there.

Edward H. Bastian: You may recall last year at this time when things were really starting to look promising, we upped our four-year guide and we got punished.

Edward H. Bastian: A few months later, as the fuel gods worked against us, so we're confident we'll end up in a good point within the four-year range. But I don't really want to get into trying to figure out what Q4 is.

Ed Bastian: So we're confident we'll end up in a good point within the full year range, but I don't really want to get into trying to figure out what Q4 is here. Can you maybe comment on how you think about selling delivery cadence, improving next year and how that impacts the industry? Well, as I mentioned, you know, we were confident in our Airbus delivery stream. We have no Boeing aircraft coming over the next handful of years I anticipate. I think it will take some time before Boeing gets their cadence back. I know they're solely starting to improve, and we'll see.

Edward H. Bastian: A few months later as the fuel gods worked against us, so we're confident we'll end up in a good point within the full year range, but I don't really want to get into trying to figure out what Q4 is here.

Edward H. Bastian: Can you maybe comment on how you think about Boeing's delivery cadence improving next year and how that impacts the industry? Well, as I mentioned, you know, we were confident in our Airbus delivery stream. We won't have any Boeing aircraft coming over the next handful of years, I anticipate. You know, I think it'll take some time before Boeing gets their cadence back. I know they're slowly, slowly starting to improve, and then we'll see.

Edward H. Bastian: [inaudible]

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

Speaker Change: Well, as I mentioned, we're confident in our Airbus delivery stream. We have no Boeing aircraft coming over the next handful of years, I anticipate.

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

Ed Bastian: Okay, thank you.

Duane Pfennigwerth: Thank you. Your next question is coming from Dwayne Fillingworth from Ryan. Si, your line is live. Hey, hey, thanks. Good morning. Just to follow up on corporate travel into September and beyond. Can you remind us what the headwind was in the fourth quarter of last year from strikes in the auto and entertainment industries? So if you recall, yes, we were heading into the writer's strike right about this time last year, and we were in the auto in the really in October times around at its peak. So that was a, I believe at least we think that's about a hundred million dollars in terms of a headwind for us or tailwind this year as we come into the fourth quarter.

Sheila Karin Kahyaoglu: Okay, thank you. Thank you. Your next question is coming from Duane Pfennigwerth from Niagara Island. The line is locked.

Speaker Change: Okay, thank you.

Speaker Change: Thank you. Your next question is coming from Duane Pfennigwerth for ISI. Your line is live.

Duane Thomas Pfennigwerth: Hey, thanks. Good morning. Just to follow up on corporate travel into September and beyond, can you remind us what the headwind was in the fourth quarter of last year from strikes in the auto and entertainment industries? So, if you recall, yes, we were heading into the writer's strike right about this time last year, and we were in the auto industry in the really October time frame. So that was a, I believe we think that's about a hundred million dollars in terms of a headwind for us or a tailwind this year as we come into the fourth quarter. Thanks, and Glen, maybe just to stick with you, can you talk a little bit about your outlook for Transatlantic in 3Q overall, maybe overall, and ex-Paris? Any bookings commentary you could point to post the Olympics?

Duane Thomas Pfennigwerth: Hey thanks, good morning. Just to follow up on corporate travel into September and beyond, can you remind us what the headwind was in the fourth quarter of last year from strikes in the auto and entertainment industries?

Speaker Change: So, if you recall, yes.

Speaker Change: We were heading into the writer's strike right about this time last year, and we were in the auto in the really in October time frame at its peak.

Speaker Change: So that was a, I believe we think that's about $100 million in terms of headwind for us, or tailwind, this year as we come into the fourth quarter.

Duane Pfennigwerth: Thanks.

Glenn Hauenstein: And Glenn, maybe just to stick with you, can you talk a little bit about your outlook for transatlantic in 3Q overall, maybe overall and X Paris any bookings commentary you could point to post the Olympics. Appreciate you taking the questions. Yeah, well, X Paris, we were positive. And so, you know, for those of you who follow my bet with, and I lost my bet because Paris was a little bit bigger than we thought. So it actually I didn't I didn't want to I didn't want to remind you of it, but on the fall, but I'm glad you brought her up.

Speaker Change: Thanks. And Glen, maybe just to stick with you, can you talk a little bit about your outlook?

Speaker Change: for Transatlantic in 3Q overall, maybe overall and ex-Paris.

Speaker Change: Any bookings commentary you could point to post the Olympics? Appreciate you taking the questions. Yeah, well, ex-Paris, we were positive, and so, you know, for those of you who follow my bet with Ed, I lost my bet because Paris was a little bit bigger than we thought, so it...

Glen W. Hauenstein: Appreciate you taking the questions. Yeah, well, ex-Paris, we were positive, and so, you know, for those of you who follow my bet with Ed, I lost my bet because Paris was a little bit bigger than we thought, so it actually... I didn't want to remind you of it on the call, but I'm glad you brought it up. You'll have it. That was an expensive miss for me, so it was good for the Employee Care Fund.

Speaker Change: I didn't want to remind you of it on the call, but I'm glad you brought it up. That was an expensive miss for me.

Glenn Hauenstein: That was an expensive miss for me. So, so good for the employee care phone, though.

Glen W. Hauenstein: And so, as we look past the Olympics, we see a very robust fall demand for transatlantic travel. We're too early to say that it's inflected to a positive yet because we don't know, but it could very well inflict a positive. I would be disappointed if it didn't. But that's a personal opinion, not a guide, an official guide.

Glenn Hauenstein: And so, as we look at past the Olympics, we see a very robust fall demand for transatlantic, and we're too early to say that it's inflective positive yet because we have, but it could very well inflict a positive. I would be disappointed if it didn't, but that's a personal opinion, not a guy an official guy. Thank you.

Speaker Change: So, good for the Employee Care Fund though.

Speaker Change: And so, as we look past the Olympics, we see a very robust fall demand for Trans-Atlantic.

Speaker Change: We're too early to say that it's inflected to positive yet, but it could very well inflect a positive. I would be disappointed if it didn't, but that's a personal opinion, not an official guide.

Glen W. Hauenstein: Thank you. Thank you. Your next question is coming from Brandon Oglenski from Barclays. Your line is live. Hey, good morning, everyone.

Brandon Oglinski: Your next question is coming from Brandon Oglinski from Barclays. Your line is live. Hey, good morning, everyone. And thanks for taking my question. Everglind, if I can come back to Scott's first question, you know, thinking about things you can control, especially as margins, you know, aren't at your target yet. And I know you talked a lot about industry capacity coming down into the fourth quarter, but, you know, maybe beyond your own capacity and the seats discussion, what are other levers you guys are pulling, you know, behind the scenes here to help drive improvement. Well, I think there's quite a bit clearly, as the demand set that we see in our specific customer base continues to look healthy, we're going to continue investing there.

Speaker Change: Thank you.

Speaker Change: Thank you. Your next question is coming from Brandon Oglenski from Barclays. Your line is live.

Brandon Robert Oglenski: And thanks for taking my question. Ed or Glen, if I can come back to Scott's first question, thinking about things you can control, especially as margins, you know, aren't at your target yet. Ed, I know you talked a lot about industry capacity coming down into the fourth quarter, but, you know, maybe beyond your own capacity in the SEEDS discussion, what are other levers you guys are pulling, you know, behind the scenes here to help drive improvement? Well, I think there's quite a bit. Clearly, as the demand set that we see in our specific customer base continues to look healthy, we're going to continue investing there. We've got a pretty good one.

Brandon Robert Oglenski: Hey, good morning, everyone, and thanks for taking my question. Edward, Glen, if I can come back to Scott's first question, you know, thinking about things you can control, especially as margins, you know, aren't at your target yet.

Brandon Robert Oglenski: Ed, I know you talked a lot about industry capacity coming down into the fourth quarter, but you know, maybe beyond your own capacity in the SEEDS discussion, what are other levers you guys are pulling, you know, behind the scenes here to help drive improvement?

Speaker Change: Well, I think there's quite a bit. Clearly, as the demand set that we see in our specific customer base continues to look healthy, we're going to continue investing there.

Glenn Hauenstein: We've got a pretty robust set of new offerings coming in in the premium space. Wi-Fi is going to be free and fast and fully available and largely fully available on the transatlantic by the end of this summer, which is a big deal for us. On the cross side, we had really good cost performance in the first half of the year. I anticipate that we're going to continue to hold that. I realize the third quarter guys have touched larger than what we thought in Q2, but we're going to work hard to get that back down. I think we've all talked about the opportunity this year on the cross front to continue to grow into our larger headcount.

Edward H. Bastian: A robust set of new offerings coming in, in the premium space, Wi-Fi is going to be free and fast and fully available and largely fully available on the transatlantic by the end of this summer, which is a big deal for us. On the cost side, we had really good cost performance in the first half of the year. I anticipate that we're gonna continue to hold that. I realize the third-quarter guy is a touch larger than what we saw in Q2, but we're gonna work hard to get that back down.

Speaker Change: We've got a pretty...

Speaker Change: Robust set of new offerings coming in in the in the premium space. Wi-Fi is going to be

Speaker Change: Free and fast and fully available and largely fully available on the transatlantic by the end of this summer, which is a big deal for us.

Speaker Change: On the cost side, we had really good cost performance in the first half of the year. I anticipate that we're going to continue to hold that. I realize the third quarter guy is a touch larger than what we're still in Q2, but we're going to work hard to get that back down. I think we've all talked about...

Edward H. Bastian: I think we've all talked about the opportunities this year on the cost front to continue to grow into our larger headcount. But we're not there yet. We still have more growth opportunities to get there, so I think across the board. Brandon, we have, we have opportunities, and we are certainly not sitting back waiting for the industry to fix itself. If that was the case, we wouldn't be delivering the outstanding level of profitability that we are, but we hope that that's going to be another tailwind. I appreciate that response. And maybe Dan, as a follow-up, can you talk about headcount trends into next year? And if you're seeing efficiencies, you know, as you restore your core hubs?

Speaker Change: The opportunity this year on the cost front to continue to grow into our larger headcount. We're not there yet. We still have more growth opportunities to get there. So I think across the board.

Glenn Hauenstein: We're not there yet. We still have more growth opportunities to get there. So I think across the board, Brandon, we have opportunities, and we are certainly not sitting back waiting for the industry to fix itself. If that was the case, we wouldn't be delivering the outstanding level of profitability that we are.

Brandon Oglinski: Brandon, we have we have opportunities and I we are certainly not sitting back waiting for the industry to fix itself if that was the case we wouldn't be delivering the outstanding level of profitability that we are and but we hope that that's going to be another tailwind for Delta.

Daniel Janki: But we hope that that's going to be another tailwind.

Daniel Janki: I appreciate that response, and maybe Dan, as a follow-up, can you talk about head count trends into next year and if you're seeing efficiencies, you know, as you restore your core hubs? Yes, we are, and just this year alone we will have head count that will grow. Our resources will grow just under 2% while we're growing in that work in mid-single digits, and I think, and that's been the case even versus the trailing 12 months. We're up only 3% on our resources versus the growth that we've demonstrated and I think that and delivered. So I think that is kind of the leading edge of us, the step here, first few steps here of us growing back into those resources and those capabilities. And it's just not people, right? It's the aircraft in the utilization of aircraft, it's growing into the airports and the investment that we made, and always reminds me the most expensive days the first day that you open it. So it's across the board. And one other thing, Brandon, this is that again don't lose sight of the free cash we're throwing off. You know, this year we'll throw off between 3 and 4 billion dollars. I'm confident in that in that guide which we we gave at the start of the year. I expect at least there's good next year again compounded effect of all that cash that will continue to deliver. The balance sheet is once again going to differentiate Delta within this industry.

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

Brandon Robert Oglenski: Yes, we are, and this year alone, we will have headcount that will grow. Our resources will grow just under 2%, while we're growing a network at mid-single digits. And I think, and that's been the case, even versus the trailing 12 months, we're up only 3% on our resources versus the growth that we've demonstrated.

Daniel Janki: Yes, we are.

Daniel Janki: This year alone, we will have headcount that will grow, our resources will grow just under 2%.

Daniel Janki: While we're growing a network and mid single digits, and I think and that's been the case even versus trailing 12 months

Daniel Janki: were up only 3% on our resources versus the growth that we've demonstrated and delivered. So I think that is kind of the leading edge of us, the first few steps here of us growing back into those resources and those capabilities.

Daniel Janki: And I think that, and delivered. So I think that is kind of the leading edge of us. The first few steps here are us growing back into those resources and those capabilities. And it's just not people, right?

Speaker Change: people, right? It's the it's the aircraft and the utilization of aircraft. It's growing into the airports and the investment that we made. Glen always reminds me the most expensive day is the first day that you open it. So it's across the board.

Daniel Janki: It's the aircraft and the utilization of the aircraft. It's growing into the airports and the investment that we made. Glenn always reminds me that the most expensive day is the first day that you open it.

Daniel Janki: So it's across the board. And one other thing, Brandon, this is Ed again. Don't lose sight of the free cash we're throwing off. This year, we'll throw off between three and $4 billion. I'm confident that that guide, which we gave at the start of the year, I expect it to be at least as good next year, again, the compounded effect of all that cash that will continue to deliver the balance sheet is once again going to differentiate Delta within this industry. Thank you both.

Speaker Change: And one other thing, Brandon, this is Ed again.

Speaker Change: Don't lose sight of the free cash we're throwing off.

Speaker Change: We'll throw off between $3 and $4 billion, I'm confident in that guide which we gave at the start of the year. I expect at least it's good next year, again, compounded effect of all that cash that we're continuing to de-lever the balance sheet is once again going to differentiate Delta within this industry.

Daniel Janki: Thank you both. Thank you.

Brandon Robert Oglenski: Thank you. Your next question is coming from Ravi Shanker from Morganton. Your line is live. Thanks. Good morning, everyone. I just want to follow up on a couple of things here. One is on the international commentary.

Ravi Shankar: Your next question is coming from Ravi Shankar from Morgan Stanley. Your line is live. Thanks. Morning Everyone. I just want to follow up a couple of follow-ups here. One is on the international corner. You guys said a couple of times that the International is looking pretty strong to the fall.

Speaker Change: Thank you both. Thank you.

Speaker Change: Thank you. Your next question is...

Speaker Change: Coming from Ravi Shanker, from Morgan Stanley .

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

Speaker Change: Your line is live.

Ravi Shanker: Thanks, good morning everyone. I just want to follow up, a couple of follow-ups here. One is on the international commentary. You guys said a couple of times that the international is looking pretty strong through the fall. Is that just a spillover from the air pocket for the Olympics kind of spreading to other periods? Are you seeing an acceleration there in any particular geographies? If you can unpack that, that would be great.

Ed Bastian: Is that just in a spillover, like you know from the air pocket for the Olympics, kind of spreading to other periods, or you see an acceleration there in any particular geography? I think generally we see the season extending as a whole group of people, whether or not it's retirees, whether or not it's people with double incomes and without children who don't have the school concerns. It's actually a better time to go to Europe in September and October than it is potentially in July and August when the weather is so hot and everything is so packed.

Glen W. Hauenstein: I think generally, we see the season extending as a whole group of people, whether or not it's retirees, whether or not it's people with double incomes and without children who don't have school concerns, it's actually a better time to go to Europe in September and October than it is in July and August when the weather is so hot and everything is so packed. So we are really seeing an extension into September and October and really through November of European demand across the board remaining strong.

Speaker Change: I think generally we see the season extending as a whole group of people, whether or not it's retirees, whether or not it's

Speaker Change: People with double incomes and without children who don't have the school concerns. It's actually a better time to go to Europe in September and October than it is potentially in July and August when the weather is so hot and everything is so packed.

Ed Bastian: So we are really seeing an extension into September and October, and it really into through November that European demand across the board is remaining strong. So that's very exciting for us. The same thing is happening in the leisure markets in the Pacific. Interestingly enough, Japan has turned into a US point of sale leisure market, with the yen hitting at 160. So we have really record numbers of US tourists heading to Japan, which is such a great destination. And that again that has a very strong fall season, so really looking at US origin high end leisure extending the season through October and into November.

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

Glen W. Hauenstein: So that's very exciting for us. The same thing is happening in the leisure markets in the Pacific. Interestingly enough, Japan has turned into a U.S. point of sale leisure market with the yen hitting at 160. So we have really record numbers of U.S. tourists heading to Japan, which is such a great destination. And again, that is a very strong fall season.

Speaker Change: So that's very exciting for us. The same thing is happening in the leisure markets in the Pacific. Interestingly enough, Japan has turned into a U.S. point-of-sale leisure market, with the yen hitting at 160. So we have really record numbers of U.S. tourists heading to Japan, which is such a great destination. And that, again, that is a very strong...

Glen W. Hauenstein: So really looking at U.S. origin, high-end leisure, extending the season through October and into November. Understandable. That's great, Conor.

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

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

Ravi Shanker: And maybe a follow-up on the previous discussion on the premiumization of the industry. As the lower-cost carriers push towards the premium, I just wanted to clarify your comments. Are you saying that there's more opportunity for you guys to push up as the bottom comes up, and do you have a sense of how high you can go?

Speaker Change: Understood. That's great, Conor. And maybe a follow-up on the previous discussion on the premiumization of the industry, kind of...

Speaker Change: As the lower cost carriers push towards premium, I just wanted to kind of clarify your comments. Are you saying that...

Speaker Change: There's more opportunity for you guys to kind of push up kind of as the as the bottom comes up and kind of do you have a sense of how high you can go or I mean there's also some concern that you know as others premiumize there's going to be more competition for a fixed set of premium demands. How do you see that playing out?

Glen W. Hauenstein: Or is there also some concern that as others premiumize, there's going to be more competition for a fixed set of premium demands? How do you see that playing out? I think it's both.

Ed Bastian: Well, I think it's both. We have, and we continue to have opportunities to grow premium, premium growing double digit for us. And we don't see that slowing down. So, Delta on its own right continues to grow there. And what will happen is, as others, if they do, choose to continue upgrade their products, it's going to force them to also upgrade their price points, which will help our main cabin revenues as well. That was the point I think we should continue to reinforce is, when you take away revenue streams, you have to replace them with other revenue streams. And so, as the ULCC's look to make their product more value, they have to increase their base fairs just to remain constant in terms of revenue.

Glen W. Hauenstein: We have, and we continue to have opportunities to grow premium. Premium's growing double-digits for us, and we don't see that slowing down. So Delta, in its own right, continues to grow there. And what will happen is, as others, if they do choose to continue to upgrade their products, it's going to force them to also upgrade their price points, which will help our main cabin revenues as well. That was the point I think we should continue to reinforce is that when you take away revenue streams, you have to replace them with other revenue. And so as the ULCCs look to make their product more valuable, they have to increase their base fares just to remain constant in terms of revenue.

Speaker Change: Well, I think it's both. We have and we continue to have opportunities to grow premium. Premium's growing double-digit for us and we don't see that slowing down.

Speaker Change: Delta, on its own right, continues to grow there.

Speaker Change: And what will happen is, as others, if they do...

Speaker Change: Unknown Attendee choose to continue to upgrade their products. It's going to force them to also upgrade their price points.

Speaker Change: which will help our main cabin revenues as well. That was the point I think we should continue to reinforce is when you take away revenue streams you have to replace them with other revenue streams.

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

Ed Bastian: And I think that is a, you know, maybe a missed point here is that that's actually good for the industry.

Glen W. Hauenstein: And I think that is maybe a missed point here, that that's actually good for. Very helpful, thank you. We'll now go to our final NLF Q&A. Certainly. Your next question is coming from Andrew Didora from Bank of America. Your line is live. Hey, good morning, everyone.

Ravi Shankar: Very helpful. Thank you.

Andrew Didora: We'll now go to our final panel of Q&A. Certainly, your next question is coming from Andrew Tidora from Bank of America. Your line is live. Hey, good morning, everyone. Thanks for squeezing me in here. Can we then, you know, helpful commentary on the 2% flea growth this year? And I know you aren't prepared to give the 2025 capacity growth now. But can you maybe help us think about the 2025 fleet or see growth based on, kind of where you see deliveries and expected retirements over the next 18 months? Yeah, I think you, as you were thinking about 40 deliveries this year, as I mentioned, give or take one or two, and how it falls out on average when you look forward into next year, it's around 50.

Speaker Change: Very helpful, thank you.

Speaker Change: We'll now go to our final analyst Q&A.

Speaker Change: Certainly. Your next question is coming from Andrew Didora from Bank of America. Your line is live.

Andrew George Didora: Thanks for squeezing me in here, Dan. Helpful commentary on the 2% fleet growth this year, and I know you aren't prepared to give the 2025 capacity growth now, but can you maybe help us think about the 2025 fleet or sea growth based on where you see deliveries and expected retirements over the next 18 months? I think you were taking about 40 deliveries this year, as I mentioned, give or take one or two and how it falls out. On average, when you look forward into next year, it's around 50.

Andrew George Didora: Hey, good morning, everyone. Thanks for squeezing me in here. Dan, helpful commentary on the 2% fleet growth this year, and I know you are prepared to give the 2025 capacity growth now, but can you maybe help us think about the 2025 fleet or sea growth based on kind of where you see deliveries and expected retirements over the next 18 months?

Daniel Janki: Yeah, I think you were taking about 40 deliveries this year, as I mentioned, give or take one or two, and how it falls out.

Daniel Janki: We're right in that 40 to 50 range associated with that, and you're going to continue to see a steady drum beat of retirements, probably in the mid 20s as we go through 2025. We'll finalize that as we get through our final plan and tweak that in regards to what it is. But it's the older flea, right? The 75s starting to see some of the 76s in the 320s. And as we've all talked about, as we've been trying to grow, we haven't been able to retire at what we're used to. This is the first time we're actually meaningfully retiring aircraft over the last two to three years.

Daniel Janki: We're right in that 40 to 50 range associated with that, and you're going to continue to see a steady drumbeat of retirements, probably in the mid-20s, as we go through 2025. We'll finalize that as we get through our final plan and tweak that in regards to what it is. But it's the older fleets, right? The 75s, starting to see some of the 76s and the 320s.

Daniel Janki: On average, when you look forward into next year, it's around 50. We're right in that 40 to 50 range associated with that, and you're going to continue to see...

Daniel Janki: A steady drumbeat of retirements probably in the mid-20s as we go through 2025. We'll finalize that as we get through our final plan and tweak that in regards to what it is. But it's the older fleets, right, the 7.5s, starting to see some of the 7.6s and the 3.20s.

Daniel Janki: And as we've all talked about, as we've been trying to grow, we haven't been able to retire on what we're used to. This is the first time we're actually meaningfully retiring aircraft over the last two to three years, and that then benefits us, right, because that then is a material stream back into our tech ops operation, maintenance operations that can use that material and improve efficiency, which they've been so good at through the years when you look at the last decade.

Daniel Janki: as we've all talked about those.

Daniel Janki: As we've been trying to...

Daniel Janki: Unknown Speaker We haven't been able to retire at

Daniel Janki: What we're used to. This is the first time we're actually meaningfully retiring aircraft over the last...

Daniel Janki: And that then benefits us, right? Because that then is a material stream back into our tech ops operation, maintenance operations that can use that material and take improved efficiency, which they've been so good at through the years when you look at the last decade.

Daniel Janki: 2-3 years.

Daniel Janki: and that then benefits us right because that then is a material stream back into our tech ops operation, maintenance operations that can use that material.

Daniel Janki: and take improved efficiency, which they've been so good at through the years when you look at the last decade.

Daniel Janki: That's actually very helpful. And as a follow-up, you know, Ed, I know you mentioned on the last call that you felt like you still had more debt than you were comfortable with. Is there any framework you can outline in terms of, you know, just giving us a sense of how you think about the proper level of debt that gets you to a much more comfortable place?

Daniel Janki: That's actually very helpful. And just as my follow-up, you know, and I know you mentioned on the last call that you feel like you have more depth than you're comfortable with. Is there any framework you can outline in terms of, you know, just give us a sense of how you think about the proper level of debt that gets you to a much more comfortable place. Thank you. Andrew, I think that's a perfect question for November. We'll answer that at that time. Great.

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

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

Operator: Thank you.

Operator: That will wrap up the analyst portion of the call.

Speaker Change: Great, thank you.

Edward H. Bastian: Thank you. Andrew, I think that's a perfect question for November. We'll answer that at that time. Great, thank you. That will wrap up the analyst portion of the call. I'll now turn it over to Tim Mapes to start the media portion. Thank you, Julie. Matthew, if you don't mind, as we transition from the analysts to the members of the media, if you could please repeat just the instructions for getting into

Leslie Joseph: I'll now turn it over to 10 mates to start the media questions.

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

Operator: Thank you, Julie.

Operator: Matthew, if you don't mind, as we transition from the analyst to the members of the media, if you could please repeat just the instructions for getting into the call, please. Certainly. At the Stanley conducting a Q&A session for media questions, if you have any questions or comments, please press star, then one on your phone. Stone, please hold while we pull for questions.

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

Tim Mapes: 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 1 on your phone. Please hold while we poll for questions.

Matthew: 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 1 on your phone.

Matthew: Please hold while we poll for questions.

Matthew: [inaudible]

Operator: Thank you.

Operator: Thank you. Your first question is coming from Leslie Joseph from CNBC. Your line is live. Hi. Good morning, everybody.

Leslie Joseph: Your first question is coming from Leslie Joseph from CNBC. Your line is live. Hi, good morning, everybody. It's just a couple questions for Premium Economy. Are you seeing most travelers buy that at the outset of their booking, or are they doing buy-ups after? And is that still the most profitable part of the cabin? And then on Wi-Fi, when do you expect the entire mainline fleet to have the fast and free Wi-Fi for SkyMiles members? Thanks.

Speaker Change #100: Thank you. Your first question is coming from Leslie Joseph from CNBC. Your line is live.

Leslie Josephs: Just a couple of questions. For premium economy, are you seeing most travelers buy that at the onset or the outset of their booking, or are they doing buy-ups later, and is that still the most profitable part of the cabin? And then on Wi-Fi, when do you expect the entire mainline fleet to have fast and free Wi-Fi for SkyMiles members? Thanks. So the question was on Delta Premium Select.

Leslie Josephs: Hi. Good morning, everybody. Just a couple of questions. For premium economy, are you seeing most travelers buy that at the onset or the outset of their booking, or are they doing buy-ups after? And is that still the most profitable part of the cabin? And then on Wi-Fi, when do you expect the entire mainline fleet?

Leslie Josephs: to have the fast and free Wi-Fi for SkyMiles members. Thanks.

Ed Bastian: So the question was on Delta Premium Select premium economy, which is Premium Select. So that is mostly being bought like all of our products at initial purchase. And, as you know, we designed that to be flexible so people could do it post-purchase. And they could do it with multiple forms of payment, including miles as the upgrade for people whose companies might not allow them to buy those that they could use their miles to upgrade into those, but still over 80% come at initial booking. And the most profitable cabin? Delta Premium Select, I think in terms of profitability, it is the third most profitable, right?

Speaker Change #102: I'm going to take the...

Speaker Change #103: So the question was on Delta Premium Select?

Glen W. Hauenstein: Unknown Attendee, Jamie Baker, Conor Cunningham, Helane Baker, David Slotnick, Jamie Baker, So that is mostly being bought, like all of our products, at initial purchase, and as you know, we designed that to be flexible so people could do it post purchase, and they could do it with multiple forms of payment, including miles as the upgrade for people whose companies might not allow them to buy in those, that they could use their miles to upgrade Unknown Attendee And is it still the most profitable, Kevin?

Speaker Change #103: Yeah.

Speaker Change #104: Premium economy, we're just premium select. Yeah.

Speaker Change #104: So that is mostly being bought, like all of our products, at initial purchase. And as you know, we designed that to be flexible so people could do it post-purchase, and they could do it with multiple forms of payment, including miles, as the upgrade for people who's...

Speaker Change #104: Companies might not allow them to buy in those, that they could use their miles to upgrade into those, but still over 80% come at initial booking.

Glen W. Hauenstein: Unknown Attendee Delta Premium Select, I think, in terms of profitability, it is the third most profitable, right? Our Delta One is the most profitable; it really goes down domestic first, and then Delta Premium Select. So really, in terms of the hierarchy, the more premium the product, the higher the margin.

Speaker Change #104: And who's the most profitable, Kevin? Delta Premium Select, I think, in terms of profitability, it is the third most profitable, right? Our Delta One is the most profitable. It really goes down domestic first and then Delta Premium Select. So really, in terms of the hierarchy, the more premium the product, the higher the margin.

Ed Bastian: Our Delta One is the most profitable. It really goes down domestic first and then Delta Premium Select. So really, in terms of the hierarchy, the more premium the product, the higher the margin. Okay, Delta One first class domestic and then the Premium Select on all routes.

Edward H. Bastian: Okay, Delta One, First Class, Domestic, and then Premium Select on all routes. And Leslie, on the Wi-Fi question, we are continuing to roll it out and making good progress. The focus right now is getting our international fleet equipped. We'll have largely the transatlantic pretty well fully up and running by the end of the summer. And our remaining focus after that is getting the regionals, as well as any remaining domestic aircraft, which is principally a 717 fleet, up and running over the next 12 to 18 months.

Speaker Change #104: Okay, Delta One, First Class, Domestic, and then Premium Select on all routes.

Ed Bastian: And as we on the Wi-Fi question, we are continuing to roll it out, making good progress. The focus rate at the moment is getting our international fleet equipped. We'll have largely the transatlantic pretty well fully up and running by the end of the summer over the next couple of months. And our remaining focus after that is getting the regionals, as well as any remaining domestic aircraft, which principally is 717 fleet, up and running over the next 12 to 18 months. So we're getting there certainly on a passenger count level will well over 50% at the present time.

Speaker Change #105: And Leslie, on the Wi-Fi question, we are continuing to roll it out, making good progress.

Speaker Change #105: The focus right at the moment is getting our international fleet equipped.

Speaker Change #105: Largely the transatlantic, pretty well fully up and running by the end of the summer over the next couple of months.

Speaker Change #105: And our remaining focus after that is getting the regionals as well as any remaining domestic aircraft, which is principally the 717 fleet, up and running over the next 12 to 18 months.

Edward H. Bastian: So we're getting there. Certainly, on a passenger count level, we're well over 50 percent at the present time. Thank you. And once again, if you have any questions or comments, please press star and then one on your phone. Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live.

Speaker Change #105: So we're getting there. Certainly on a passenger count level, we're well over 50% at the present time.

Mary Schlangenstein: All right, thank you. Thank you.

Mary Schlangenstein: And once again, if you have any questions or comments, please press star, then one on your phone.

Speaker Change #106: Okay, thank you.

Speaker Change #107: Thank you. And once again, if you have any questions or comments, please press star, then 1 on your phone.

Operator: Your next question is coming from Mary Slingenstein from Bloomberg News. Your line is live. Hi, thank you. I wanted to see if you could just give us a little bit more detail on the Japan situation that you mentioned. Is that just primarily leisure, or what is your business travel looking like between the US and Japan as well? US and Japan business is quite strong. It has been since the end of the pandemic, and what we've seen is really a new Japan as a destination market. I think when the end was 83, it was very difficult to be able to afford to go see Japan and all the great things that Japan has to offer with the end at 160.

Speaker Change #108: Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live.

Mary Schlangenstein: Hi, thank you. I wanted to see if you could just give us a little bit more detail on the Japan situation that you mentioned. Is that just primarily leisure, or what is your business travel looking like between the U.S. and Japan as well? U.S. and Japanese business is quite strong. It has been since the end of the pandemic, and what we've seen is really a new Japan as a destination market. I think when the yen was 83, it was very difficult to be able to afford to go see Japan and all the great things that Japan has to offer.

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

Speaker Change #110: The US and Japan business is quite strong. It has been since the end of the pandemic. And what we've seen is really a new

Speaker Change #110: Japan is a destination market. I think when the yen was $83, it was very difficult to be able to afford to go see Japan and all the great things that Japan has to offer. With the yen at $160, it's a very different world for U.S. travelers, and they seem to be taking great advantage of that.

Glen W. Hauenstein: With the yen at 160, it's a very different world for U.S. travelers, and they seem to be taking great advantage of that. But what about on the business side? Business continues to remain strong. Okay, and the other question I had was whether you've talked for some time about the refinery and whether you're still in any sort of discussions to develop a partnership or sell the refinery. Can you give us an update on that? We're not, the refinery has been running very well, the team's doing a great job, be part of Delta.

Ed Bastian: It's a very different world for US travelers, and they seem to be taking great advantage of that. And what about on the business side? Business continues to remain strong.

Speaker Change #111: And what about on the business side? Business continues to remain strong.

Ed Bastian: Okay, and the other question I had was you all haven't talked for some time about the refinery and whether you're still in any sort of discussions to develop a partnership or sell the refinery. Can you give us an update on that? We're not; the refinery has been running very well; the team's doing a great job; the key part of Delta. Great, thank you. Thank you, Mary.

Speaker Change #112: Okay, and the other question I had was, y'all haven't talked for some time about the refinery and whether you're still in any sort of discussions to develop a partnership or sell the refinery. Can you give us an update on that?

Speaker Change #113: We're not. The refinery has been running very well. The team's doing a great job, a key part of Delta.

Glen W. Hauenstein: Great, thank you. Thank you, Mary. With that, Matthew, we're right at the hour. We'll, we'll conclude the call. Thank you. That concludes today's conference. Thank you for your participation today.

Ed Bastian: With that, Matthew, we're right at the hour; we'll conclude the call. Thank you, concludes today's conference. Thank you for your participation today. Thank you.

Speaker Change #114: Great, thank you.

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

Speaker Change #115: Thank you. That concludes today's conference. Thank you for your participation today.

Q2 2024 Delta Air Lines Inc Earnings Call

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