Q4 2024 Delta Air Lines Inc Earnings Call

January 10, 2025

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

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

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

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

Julie Stewart: Thank you Matthew good morning, everyone and thanks for joining us for our December quarter, and full year 2024 earnings call.

Speaker Change: Joining us from Atlanta today are our CEO, Ed Bastian, our president Glen Hauenstein, and our CFO, Dan Janky, Ed will open the call with an overview of <unk> performance and strategy Glenn will provide an update on the revenue environment and Dan will discuss costs in our balance sheet.

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

Speaker Change: As a reminder, 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.

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

Speaker Change: We'll also discuss non-GAAP financial measures and all results exclude special items unless otherwise noted.

Speaker Change: You can find a reconciliation of our non-GAAP measures on the Investor Relations page at IR Dot Delta Dot com and with that I'll turn the call over to Ed well.

Ed Bastian: Well, thank you Julia and good morning, we appreciate everyone joining us today.

Speaker Change: Before we start.

Speaker Change: The hearts of the entire Delta family go out to all those who are being impacted by the devastating wildfires in southern California, We're incredibly grateful to the road first responders, who are working at great personal risk to keep our community safe, we announced yesterday that delta will donate $1 million to the American Red Cross to aid the individuals.

Speaker Change: Families and communities in the region, who have been affected.

Speaker Change: I also wanted to say a few words on the recent passing of President Carter.

Ed Bastian: As a Georgia based airline his life and legacy has had a deep impact on delta's mission to connect the world.

Ed Bastian: Among his many accomplishments as administration led the deregulation of our industry, making air travel more accessible and affordable to all Americans I had the privilege of knowing president Carter and traveled with him on multiple occasions.

Ed Bastian: We always took the time to personally greet our staff in every single customer on each flight. We were on it was as gracious and genuine a leader as I've ever met a truly great man.

Speaker Change: As both a service embodied our model to always keep climbing and on behalf of the entire Delta family, We honor his memory and celebrate the many achievements of President Carter's life.

Speaker Change: Earlier. This morning, we reported December quarter, and full year results. The Delta team delivered a strong close to the year, both operationally and financially.

Speaker Change: We reported December quarter pre tax profit of $1 6 billion.

Speaker Change: With earnings per share of $1 85 at the top end of our guidance on record revenue and outstanding operational performance. This marks the largest December quarter profit in delta's history, improving more than $500 million over last year.

Operationally, we achieved industry, leading performance with a number one system completion factor and on time performance amongst our peer set throughout the December quarter I want to thank all 100000 members of our team for their outstanding efforts, particularly during a busy holiday travel season.

Speaker Change: For the full year 2000 and for our operational teams delivered 78 brand perfect days last week Delta was recognized for the fourth consecutive year with serious Platinum award for operational excellence and as the most on time airline in North America.

Speaker Change: Financially, we expect our results will lead the industry across all key measures with a double digit operating margin and $5 2 billion of pre tax income representing nearly 50% of the industry's profitability.

Speaker Change: Our return on invested capital of 13% is in the upper half of the S&P 500, and double the rest of the industry. This performance reflects delta's sustained differentiation and durability.

Speaker Change: Full year earnings per share of $6 16 was above the midpoint of our initial 6% to $7 guidance from the start of the year when normalizing for the 45 impact of the crowd strike caused outage in the September quarter.

Speaker Change: Free cash flow is expected to lead the industry at three 4 billion.

Speaker Change: And nearly $1 5 billion improvement over 23.

Speaker Change: The robust cash generation supported further debt reduction and a 50% increase to our quarterly dividend during the year.

Speaker Change: Recognizing the strength of our financial Foundation S&P upgraded Delta last month, returning our balance sheet to investment grade level at all three major credit agencies.

Speaker Change: Now these results would not be possible without the incredible work of the Delta people. Our employees are the best in the business and we are proud to recognize their commitment to industry, leading performance with industry, leading rewards in 2024, we provided our employees with a 5% pay increase and I am pleased to announce that we will celebrate.

Speaker Change: Them with one $4 billion and well earned profit sharing on Valentine's day in February.

Speaker Change: This will represent one of the top three profit sharing payouts in delta's history and is expected to be more than the rest of the industry combined.

Speaker Change: The Delta people are our number one competitive advantage and our 2024 performance reflects their commitment to best in class operations and service for our customers.

Speaker Change: Now turning to our outlook 25 is off to a great start and we are on track to deliver the best financial year in our history with revenue growth and margin expansion driving record profitability.

Speaker Change: Across the industry carriers are taking action to improve their financial health, creating increasingly constructive backdrop.

Speaker Change: Consumers financially healthy and continues to prioritize spending on experiences closing out 2024, we saw an acceleration in air travel demand from corporates and consumers and co brand card spending growth accelerated.

Speaker Change: This momentum is continuing into the March quarter, where we expect to grow the top line by 7% to 9% expand margins by two points and nearly double earnings over last year.

Speaker Change: For the full year, we expect earnings per share greater than $7 35.

Speaker Change: Increasing more than 20% compared to 2024 as reported when comparing to our normalized EPS, excluding the impact of crowd strike. This represents growth ahead of our long term target of 10% average annual growth.

Speaker Change: Cash generation is an important differentiator for delta and in 2025, we expect to generate over $4 billion of free cash flow.

Speaker Change: Supporting further debt reduction and bringing our leverage ratio down to two times or less.

Speaker Change: As we shared at Investor Day in November Delta has a clear focused strategy that capitalizes on 15 years of investment in our brand customer experience and financial Foundation.

Speaker Change: Entering our next century of flight Delta has never been more differentiated from the industry.

Speaker Change: And as a consumer brand that serves $200 million customers annually, we leverage innovation and technology to empower our people and further elevate the travel experience Tuesday night I had the honor of given the keynote address at CES 2025 in Las Vegas at sphere.

Speaker Change: That unique space, we honored delta century of connecting the World presented our vision for the next century of flight and previewed how delta is driving innovation to deliver more seamless journeys from home to your seat, including new personalized experiences that are arriving in the coming months. This includes the introduction of Delta <unk>.

Speaker Change: <unk> the evolution of Delta <unk>, an exciting new partnerships that will enable us to better anticipate customers' needs and grow the value of Skymiles membership Delta.

Speaker Change: <unk> is a new digital tool built into the fly Delta App, which will support members as a virtual personal assistant powered by gender generative AI to make travel easier and less stressful.

Speaker Change: The next phase of Delta sink starting later this year includes a new and exclusive partnership with Youtube. The world's largest video platform to provide access to add free Youtube premium and music streaming onboard via Delta, saying seatback screens and are fast free Wi Fi for Skymiles members and we and.

Speaker Change: <unk>, an exclusive new partnership with Uber, where skymiles members will earn miles for eligible rides and deliveries in the U S. This unique relationship creates new opportunities to integrate further and expand our partnerships with category leaders broadening the delta skymiles ecosystem in the range of benefits we.

Speaker Change: Provide to our members every day.

Speaker Change: Together these products and partnerships reflect our continued commitment to investing in and providing our customers with a superior travel experience they drive greater engagement with our skymiles members that extend well beyond air travel improving customer satisfaction and deepening loyalty to delta and.

Glenn: In closing Delta's people continue to differentiate what we deliver for our customers and our owners with momentum entering our 100th year, we are positioned to deliver another year of industry, leading performance and now I'll turn it over to Glenn.

Glenn: Thank you Ed and good morning, everyone.

Glenn: I want to start by thanking our employees for their hard work and dedication and delivering a great year.

Glenn: December quarter revenue was a record $14 4 billion, a five 7% higher than 2023 and above the top end of our guidance on industry, leading operational performance and strong close in demand.

Glenn: Post election, we recorded four of the top 10 revenue days in our history and saw a step up in booking activity from both leisure and corporate travelers driving double digit growth in cash sales.

Glenn: Total unit revenue grew four tenths of a point over prior year with sequential improvement in all geographies.

Glenn: Domestically unit revenues picked up nicely following the election and international unit revenues improved across all three geographies and performed ahead of our expectations.

Glenn: Corporate sales grew 10% year over year, improving three points sequentially.

Glenn: Strength built through the quarter, driven by both volume and fare with broad based strength in geographically and across all sectors.

Glenn: We also saw an acceleration in co brand trends with American Express renew Mauritian of really of nearly $2 billion during the quarter up 14% year over year on a broad based acceleration in card spend and acquisitions.

Glenn: For the full year, we delivered a record revenue of 57 billion, 4% above 2020 threes prior record with diversified streams, including premium loyalty and cargo, leading and contributing 57% of total revenue.

<unk> grew 10% year over year, improving three points sequentially.

Strength built through the quarter, driven by both volume and fare.

Glenn: Premium revenue performance outpaced main cabin throughout the year up 8% over prior year with positive unit revenues in all four quarters of 'twenty four.

With broad based strength in geographically and across all sectors.

We also saw an acceleration in co brand trends with American Express renewal <unk> of really of nearly $2 billion during the quarter up 14% year over year on a broad based acceleration in card spend and acquisitions.

Glenn: Total loyalty revenue was up 9% over 2023 with renew Mauritian from American Express, reaching approximately $7 4 billion for the year driven by high single digit growth in co brand spend and over 1 million new card acquisitions.

For the full year, we delivered a record revenue of 57 billion, 4% above 2020 threes prior record with diversified streams, including premium loyalty and cargo, leading and contributing 57% of total revenue.

Glenn: We are confident in another year of high single digit growth in co brand renew Mauritian and 25% as we progress towards our long term goal of $10 billion.

Premium revenue performance outpaced main cabin throughout the year up 8% over prior year with positive unit revenues in all four quarters of 'twenty four.

Glenn: Cargo revenue grew 14% over 2023 with sequential improvement throughout the year.

Glenn: Turning to our outlook Delta is capitalizing on demand strength and improving industry dynamics.

Total loyalty revenue was up 9% over 2023 with renew Mauritian from American Express, reaching approximately $7 4 billion for the year driven by high single digit growth in co brand spend and over 1 million new card acquisitions.

Glenn: We expect March quarter revenue to be up 7% to 9% higher than last year ahead of our capacity growth as unit revenues improved several points sequentially with progression in all geographies.

We are confident in another year of high single digit growth in co brand renew Mauritian and 25% as we progress towards our long term goal of $10 billion.

Glenn: Stick demand remains robust with considerable improvement in the supply backdrop over the last few months.

Unprofitable supply is removed across the industry.

Cargo revenue grew 14% over 2023 with sequential improvement throughout the year.

Glenn: Delta is well positioned in this environment as we focus on our core strengths and optimize our core hubs.

Turning to our outlook Delta is capitalizing on demand strength and improving industry dynamics.

Glenn: Trans Atlantic unit revenue is expected to lead at up mid single digits for the second quarter in a row.

We expect March quarter revenue to be up 7% to 9% higher than last year ahead of our capacity growth as unit revenues improved several points sequentially with progression in all geographies.

Glenn: And across the Atlantic is benefiting from strong U S point of sale and an extension of the season with unprecedented off peak results.

Glenn: We have good visibility into the spring and summer and expect another year of record profitability in our largest international entity.

Mystic demand remains robust with considerable improvement in the supply backdrop over the last few months.

Glenn: Latin unit revenue is expected to improve sequentially for the third consecutive quarter and inflect positive as capacity investments mature, particularly in long haul South America, where we have increased connectivity with our partner <unk>.

Unprofitable supply is removed across the industry.

Delta is well positioned in this environment as we focus on our core strengths and optimize our core hubs.

Trans Atlantic unit revenue is expected to lead at up mid single digits for the second quarter in a row.

Glenn: The Pacific is leading an overall revenue growth unit revenues are expected to be modestly negative on mid teens capacity increases.

Demand across the Atlantic is benefiting from strong U S point of sale and an extension of the season with unprecedented off peak results.

Glenn: Turns are improving sequentially and margins continue to be at record levels.

We have good visibility into the spring and summer and expect another year of record profitability in our largest international entity.

Glenn: We congratulate our partner Korean air on closing their acquisition of <unk>, We look forward to expanding our joint venture in increasing our options for our joint venture customers along the Pacific following the integration.

Latin unit revenue is expected to improve sequentially for the third consecutive quarter and inflect positive as capacity investments mature, particularly in long haul South America, where we have increased connectivity with our partner <unk>.

Glenn: This merger will facilitate even better connectivity and opportunity for further to further expand our operations to sole over the coming years.

The Pacific is leading an overall revenue growth unit revenues are expected to be modestly negative on mid teens capacity increases trends are improving sequentially and margins continue to be at record levels.

Glenn: Turning to our network plans for the full year as we noted in our Investor day, we expect to increase capacity, 3% to 4% in 2025 with more than 85% of incremental seats in premium cabins.

We congratulate our partner Korean air on closing their acquisition of <unk>, We look forward to expanding our joint venture in increasing our options for our joint venture customers along the Pacific following the integration.

Glenn: Domestically, 80% of our growth will be in our most profitable core hubs and internationally growth is normalizing following our multiyear restoration in investment phase.

Glenn: We are confident in our ability to drive margin improvement in 2025, as we focus on efficient growth across high margin premium cabins, and our most profitable hubs and we are well positioned to capture upside in the main cabin margins as industry health improves.

This merger will facilitate even better connectivity and opportunity for further to further expand our operations to sole over the coming years.

Turning to our network plans for the full year as we noted in Investor day, we expect to increase capacity, 3% to 4% in 2025 with more than 85% of incremental seats in premium cabins.

Glenn: In closing, we had a great 2024, and I am excited about deltas opportunity to make our centennial the best year in our history.

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

Domestically, 80% of our growth will be in our most profitable core hubs and internationally growth is normalizing following our multiyear restoration in investment phase.

Glenn: <unk>.

Dan Janky: Thank you Glenn and good morning to everyone.

Dan Janky: I'm incredibly proud of the Delta team for their hard work in 2024, we closed out the year in a position of strength.

We are confident in our ability to drive margin improvement in 2025, as we focus on efficient growth across high margin premium cabins, and our most profitable hubs and we are well positioned to capture upside in the main cabin margins as industry health improves.

Dan Janky: In the December quarter, we delivered a record fourth quarter revenue and profit with earnings of $1 85 per share at the top end of our guidance and more than 40% higher year over year.

In closing, we had a great 2024, and I am excited about deltas opportunity to make our centennial the best year in our history and.

Dan Janky: Operating margins of 12%, we're up two points over the prior year.

Dan Janky: For the full year, we reported a double digit operating margin.

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

Dan Janky: Earnings of $6 16 per share and our return on invested capital of 13%.

Dan: Thank you Glenn and good morning to everyone.

I am incredibly proud of the Delta team for their hard work in 2024, we closed out the year in a position of strength.

Dan Janky: With strong operational performance through the year and a companywide focus on efficiency. The teams delivered on our full year target of low single digit non fuel unit cost growth.

Dan: In the December quarter, we delivered a record fourth quarter revenue and profit with earnings of $1 85 per share at the top end of our guidance and more than 40% higher year over year.

Dan Janky: During the year, we invested in our people through pay and benefit increases and in our customers with ongoing rollout of our fast for a Wi Fi for Skymiles members. The introduction of our <unk> Delta one lounges and the completion of generational airport upgrades.

Dan: Operating margins of 12%, we're up two points over the prior year.

Dan: For the full year, we reported a double digit operating margin.

Dan: Earnings of $6 16 per share and our return on invested capital of 13%.

Dan Janky: Delta is investing at levels unmatched in the industry, while delivering better relative non fuel cost performance.

Dan: With strong operational performance through the year and a companywide focus on efficiency. The teams delivered on our full year target of low single digit non fuel unit cost growth.

Dan Janky: Operating cash flow for the full year was $8 billion.

Dan Janky: And after reinvesting $4 8 billion back into the business, we generated free cash flow of $3 4 billion.

Dan: During the year, we invested in our people through pay and benefit increases and in our customers with ongoing rollout of our fast free Wi Fi for Skymiles members. The introduction of our <unk> III Delta one lounges and the completion of generational airport upgrades.

Dan Janky: Strong cash generation supported debt repayment of 4 billion, including $1 billion of early repayments.

Dan Janky: We ended 2024 with gross leverage at two six times and unencumbered assets of $30 billion.

Dan: Delta is investing at levels unmatched in the industry, while delivering better relative non fuel cost performance.

Dan Janky: And in the December quarter, our balance sheet returned to investment grade at all three major credit rating agencies.

Dan Janky: Differentiating delta and reflecting our financial durability.

Dan: Operating cash flow for the full year was $8 billion.

Dan: And after reinvesting $4 8 billion back into the business, we generated free cash flow of $3 4 billion.

Dan Janky: Now turning to our outlook.

Dan Janky: As part of our ongoing effort to focus on our primary financial metrics that drive shareholder value. We are providing full year guidance that aligned to the three to five year financial framework.

Dan: Strong cash generation supported debt repayment of 4 billion, including $1 billion of early repayments.

Dan Janky: Including EPS cash flow and leverage.

Dan: We ended 2024 with gross leverage at two six times and unencumbered assets of $30 billion.

Dan Janky: On a quarterly basis will be providing guidance for revenue growth operating margins and EPS.

Dan Janky: With directional color on unit metrics.

Dan: And in the December quarter, our balance sheet returned to investment grade at all three major credit rating agencies.

Dan Janky: For the March quarter, we expect revenue growth of 7% to 9%.

Dan: Differentiating delta and reflecting our financial durability.

Dan Janky: Operating margin of 6% to 8%.

Dan: Now turning to our outlook.

Dan Janky: And earnings of <unk> 70 to $1 per share.

Dan: As part of our ongoing effort to focus on our primary financial metrics that drive shareholder value. We are providing full year guidance that aligned to the three to five year financial framework.

Dan Janky: This represents more than two points of margin expansion and a nearly doubling of earnings at the midpoint.

Non fuel unit cost growth in the March quarter is expected to be up low single digits year over year with performance similar to the December quarter.

Dan: Including EPS cash flow and leverage.

Dan: On a quarterly basis will be providing guidance for revenue growth operating margins and EPS.

Dan Janky: As the year progresses, we should see improvement in non fuel cost growth as we continue to drive efficiency.

Dan: With directional color on unit metrics.

Dan: For the March quarter, we expect revenue growth of 7% to 9%.

Dan Janky: For the full year.

Dan Janky: Expect earnings per share ahead of our long term average annual growth target of 10%.

Dan: The operating margin of 6% to 8%.

Dan: And earnings of <unk> 70 to $1 per share.

Dan Janky: With earnings of greater than $7 35 per share.

Dan: This represents more than two points of margin expansion and a nearly doubling of earnings at the midpoint.

Dan Janky: Free cash flow greater than $4 billion and.

Dan Janky: And leverage of two times or less.

Dan: Non fuel unit cost growth in the March quarter is expected to be up low single digits year over year with performance similar to the December quarter.

This outlook incorporates margin expansion opportunities in our control, including improvements from revenue mix as we grow high margin streams like premium and loyalty, while driving efficiency across the business.

As the year progresses, we should see improvement in non fuel cost growth as we continue to drive efficiency.

Ed Bastian: As Ed and Glen noted the industry backdrop continues to improve providing potential for additional margin upside from the main cabin.

Dan: For the full year.

We expect earnings per share ahead of our long term average annual growth target of 10% with earnings of greater than $7 35 per share.

We expect non fuel unit cost growth consistent to our performance in 2024.

Ed Bastian: And our long term target of low up low single digits.

Dan: Free cash flow greater than $4 billion.

Dan: And leverage of two times or less.

Ed Bastian: Even as capacity down 2% to three points from last year's growth as we are better able to leverage our existing assets and maintenance expense begins to normalize.

Dan: This outlook incorporates margin expansion opportunities in our control, including improvements from revenue mix as we grow high margin streams like premium and loyalty, while driving efficiency across the business.

Ed Bastian: This will help fund ongoing investments in our people and our customer experience.

Speaker Change: As Ed and Glen noted the industry backdrop continues to improve providing potential for additional margin upside from the main cabin.

In 2025 half our expected capacity growth is being funded by improved utilization of both our mainline and regional fleets with incremental capacity deployed primarily into our high margin core hubs.

Speaker Change: We expect non fuel unit cost growth consistent to our performance in 2024.

Speaker Change: And our long term target of low up low single digits.

Ed Bastian: We are growing into our workforce and expect another year, where head count growth.

Speaker Change: Even as capacity down.

Ed Bastian: Is below capacity as our people gain experience with opportunities across our operational groups.

Speaker Change: Down two to three points from last year's growth as we are better able to leverage our existing assets and maintenance expense begins to normalize.

Ed Bastian: 2025 is the final year of our generational airport developments.

Speaker Change: This will help fund ongoing investments in our people and our customer experience.

Ed Bastian: With their completion, we are now well positioned for the next several decades.

Speaker Change: In 2025 half our expected capacity growth is being funded by improved utilization of both our mainline and regional fleets with incremental capacity deployed primarily into our high margin core hubs.

Speaker Change: A premium ground experience that is unique to delta.

Ed Bastian: Given the long term nature of these investments cost per employment will improve over time as we grow into our assets.

Ed Bastian: Strong cash flow remains an important differentiator for delta.

Speaker Change: We are growing into our workforce and expect another year, where head count growth.

Ed Bastian: Our outlook for more than $4 billion of free cash flow is 10% of our current market cap and more than $500 million improvement over 2024.

Speaker Change: As below capacity as our people gain experience with opportunities across our operational groups.

Speaker Change: 2025 is the final year of our generational airport developments with their completion, we are now well positioned for the next several decades with a premium ground experience that is unique to delta.

Ed Bastian: Capital allocation, we expect to reinvest $5 billion of capital into the business, including approximately 40 aircraft deliveries and continued investment in technology and facilities, including Sky clubs and Delta one lounges.

Speaker Change: Given the long term nature of these investments cost per employment will improve overtime as we grow into our assets.

Ed Bastian: Beyond investing in the business.

Ed Bastian: Debt Paydown remains our priority.

Strong cash flow remains an important differentiator for delta.

Ed Bastian: <unk> planned to pay cash for $3 billion.

Ed Bastian: Our 2025 debt maturities this year, and we will opportunistically repay higher cost debt to end the year with gross leverage of two times or less.

Speaker Change: Our outlook for more than $4 billion of free cash flow is 10% of our current market cap and more than $500 million improvement over 2024.

Ed Bastian: Progressing towards our long term target of one times.

Speaker Change: Capital allocation, we expect to reinvest $5 billion of capital into the business, including approximately 40 aircraft deliveries and continued investment in technology and facilities, including Sky clubs and Delta one lounges.

Ed Bastian: In closing <unk>.

Ed Bastian: Alta is executing against our long term financial framework and creating significant value as we expand margins deliver durable earnings and free cash flow and further strengthen our investment grade balance sheet.

Speaker Change: Beyond investing in the business debt Paydown remains our priority we plan.

Ed Bastian: Returns remain industry, leading and we expect to make progress towards our return on invested capital target of 15% this year.

Speaker Change: Planned to pay cash for $3 billion of our 2025 debt maturities. This year and we will opportunistically repay higher cost debt to end the year with gross leverage of two times or less.

Ed Bastian: We are excited about our momentum as we enter a historic year for Delta.

Ed Bastian: I'd like to thank our people for all they do.

Speaker Change: Progressing towards our long term target of one times.

Ed Bastian: <unk> every day.

Speaker Change: In closing <unk>.

Speaker Change: And with that I'll turn it back to Julie Q&A. Thanks, Dan Matthew We will now open it up for analyst Q&A.

Speaker Change: Alta is executing against our long term financial framework and creating significant value as we expand margins deliver durable earnings and free cash flow and further strengthen our investment grade balance sheet.

Speaker Change: Certainly everyone. 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 we.

Speaker Change: Returns remain industry, leading and we expect to make progress towards our return on invested capital target of 15% this year.

Speaker Change: We do ask about posing your question. Please pickup your handset if you're listening on speaker phone 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 that re enter the queue.

Speaker Change: We are excited about our momentum as we enter a historic year for Delta.

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

I'd like to thank our people for all they do everyday.

Speaker Change: Your first question is coming from Catherine O'brien from Goldman Sachs. Your line is live.

Speaker Change: And with that I'll turn it back to Julie Q&A. Thanks, Dan Matthew We will now open it up for analyst Q&A.

Speaker Change: Hi, everyone. Thanks, so much for the time, it's good to be back on one of these things.

Speaker Change: Certainly everyone. 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 we.

Speaker Change: Yes.

Speaker Change: I don't want to be greedy after fourth quarter beat in first quarter revenue guide that was much higher than I was expecting.

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

Speaker Change: But I'd love to dig in on the greater piece of your greater than 735 full year guide and Dan hinted a little bit in his prepared remarks.

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

Speaker Change: If we can assume that your prior commentary around mid single digit revenue growth for the full year stands and youre starting off with high single digit growth.

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

Speaker Change: Your first question is coming from Catherine O'brien from Goldman Sachs. Your line is live.

Speaker Change: Would it be fair to assume that the 735 has a pretty conservative back half revenue outlook baked in there and then outside of potential revenue upside what else drives that upside from 735. Thanks. So much.

Catherine O'brien: Hi, everyone. Thanks, so much for your time, it's good to be back on one of these things.

Speaker Change: Yes.

Speaker Change: I don't want to be greedy after fourth quarter beat in first quarter revenue guide that was much higher than I was expecting.

Speaker Change: So as we talked about at Investor Day, and you think about it.

Speaker Change: With capacity growth in the low single digits revenue growth of 5% and when you think about margin expansion of about 50 basis points that gives you about 10% earnings growth. So with this forecast we're focused on things that we can control.

I'd love to dig in on the greater piece of your greater than 735 full year guide and Dan hinted that a little bit in his prepared remarks.

Speaker Change: If we can assume that your prior commentary around mid single digit revenue growth for the full year stands and youre starting off with high single digit growth.

Speaker Change: It relates to our capacity, where we're putting it.

Speaker Change: The premium revenue growth loyalty those types of elements along with driving.

Speaker Change: Efficiencies from a delta perspective.

Speaker Change: And that provides us the confidence and we have good visibility as we sit here today as it relates to first quarter and really the first half of the year. Good about that second half will unfold as we progress we will give you more color and context on that.

Speaker Change: So as we talked about at Investor Day, and you think about it.

Speaker Change: You talked about with capacity growth in the low single digits revenue growth of 5% and when you think about margin expansion of about 50 basis points that gives you about 10% earnings growth. So with this forecast we're focused on things that we can control as it relates to our capacity where we are.

Speaker Change: And as I mentioned in the note I think the industry contracted how it evolves through the year and especially the back half as it relates to main cabin that we've talked about that could provide additional upside as it relates to margins as we progress through the year.

Speaker Change: Putting it.

Speaker Change: The premium revenue growth loyalty those types of elements along with driving.

Speaker Change: That's great. Thanks, and then maybe one for Glen a quick one in the press release, you noted that all geography geographic entities came in stronger in the fourth quarter than you. Initially expecting was there any one standout in terms of the magnitude of that improvement and how do these trends inform your view on capacity allocation geographically.

Speaker Change: Efficiencies from a delta perspective.

Speaker Change: Over the course of 2025, thanks, so much for the time everyone.

As I mentioned in the note I think the.

Speaker Change: Well I would say the outstanding performance was in the Trans Atlantic.

Speaker Change: The industry construct and how it evolves through the year and especially the back half as it relates to main cabin that we've talked about that could provide additional upside as it relates to margins as we progress through the year.

Speaker Change: Alright, as most everybody knows the summer IATA seasons as a peak in the winter is the off peak.

Speaker Change: Unusually.

Speaker Change: Yeah.

Speaker Change: Not able to generate significant returns in the off peak many months we have taken.

Speaker Change: That's great. Thanks, and then maybe one for Glen a quick one in the press release, you noted that all geography geographic entities came in stronger in the fourth quarter than you were initially expecting was there any one standout in terms of the magnitude of that improvement and how do these trends inform your view on capacity allocation geographically over the course of 2012.

Speaker Change: Just really really strong not only advanced bookings for close in business travel going in the Trans Atlantic has been incredibly strong.

Speaker Change: What was driving that and it's really U S point of origin.

Speaker Change: Again today. The dollar was up again, the euro is down to 102 Europe is an incredibly screaming buy for as a tourist destination and people are finding that particularly in southern Europe.

Speaker Change: Five thanks, so much for the time everyone.

Speaker Change: Well I would say the outstanding performance was in the transit lab.

Alright, as most everybody knows the summer IATA seasons as a peak in the winter is the off peak unusually well.

Speaker Change: Whether it is actually pretty nice in the winter and the street's arent as crowded. So it's not about time to go. So I think we've got a confluence of a lot of things happening, but all of those are favorable to our environment and we're really capitalizing on it.

Speaker Change: Not able to generate significant returns in the off peak many months we have begun.

Speaker Change: Just really really strong not only advanced bookings, but close in business travel going in the Trans Atlantic has been incredibly strong.

Speaker Change: So much.

Okay.

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

Speaker Change: You asked what are what is driving that and it's really U S point of origin.

Speaker Change: Hi, good morning, everyone and congrats on the results of a nice to see the market taking notice add definitely exciting that CES. This week and I know you guys announced a lot of new partnerships, but maybe can you elaborate more for investors. How you plan to monetize sky miles going forward, especially with like <unk> and some of the new things you are now.

<unk> this week.

Speaker Change: Well. Thanks, Brandon It was good that you are out there too to see if it was an exciting week for Delta.

Speaker Change: So much.

Speaker Change: Okay.

Speaker Change: So the question of monetization is interesting.

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

Speaker Change: We're not we're not announcing these partnerships so that we can start taking and starting to try to capture revenue immediately out of it. This is all about creating a much longer term relationship and experience based platform for our customers the monetization opportunities will unfold and do.

Brandon Glinski: Hi, good morning, everyone and congrats on the results to date and I still see the market taking notice.

Speaker Change: Definitely exciting that CES. This week and I know you guys announced a lot of new partnerships, but maybe can you elaborate more for investors. How you plan to monetize sky miles going forward, especially with like <unk> and some of the new things you announced this week.

Speaker Change: Course.

Speaker Change: With a more valuable.

Speaker Change: Item in my mind is how we are growing the value of the sky <unk> membership and wanting our customers to continue to demonstrate an even greater amount of loyalty to delta as part of that giving them more reason to be flying delta than ever before and every every step of the journey.

Speaker Change: Well. Thanks, Brandon It was good that you are out there too to say it was it was an exciting week for Delta.

Speaker Change: A question on monetization is interesting.

Speaker Change: <unk> relationship is unique in its exclusive and it's new.

Speaker Change: It's something that as we think about Uber and the impact not just for over <unk> as well I think we'll have a big impact on on them as well as with us.

Of course.

Speaker Change: Youtube is going to be a huge enhancement for our in flight entertainment product offerings, and it's going to drive more and more sign ups to be to be part of the sky miles program. So we will talk about monetization at some point in the journey, but thats not the initial goal of what we're doing here.

Speaker Change: With a more valuable.

Speaker Change: Item in my mind is how we are growing the value of the sky modest membership and wanting our customers to continue to demonstrate an even greater amount of loyalty to delta as part of that giving them more reason to be flying delta than ever before and every every step of the journey.

Speaker Change: Definitely appreciate that Ed and then Dan can you give us some insight into some of the levers you're pulling this year on keeping CASM low single digits.

Speaker Change: <unk> relationship is unique in its exclusive and it's new.

Speaker Change: It's something that as we think about Uber and the impact not just for Uber Uber eats as well I think we will have a big impact on on them as well as with us.

Speaker Change: Maybe we underappreciated how much.

Speaker Change: Network restoration costs were in the last couple of years.

Youtube is going to be a huge enhancement for our in flight entertainment product offerings, and it's going to drive more and more sign ups to be to be part of the sky miles program. So we will talk about monetization at some point in the journey, but thats not the initial goal of what we're doing here.

Speaker Change: Yes, I think consistent to many of the items that we talked about.

Speaker Change: At Investor Day, It really comes down to if you know that.

Speaker Change: So called investments that we're making cost related to our people on the growth in seniority.

Speaker Change: We still have in 2025.

Speaker Change: Definitely appreciate that and then Dan can you give us some insight into some of the levers you're pulling this year on keeping CASM low single digits.

Speaker Change: Airports coming online and the full run rate of those developments along with the rate inflationary elements that we're seeing in those and that will be somewhat consistent to what we saw in 2024 and continued investment in customer experience. But then you were alluding to on the efficiency side.

Maybe we underappreciated how much like network restoration costs were in the last couple of years.

Speaker Change: It's really getting better utilization out of our assets and investments that we made part of it is the fleet and the network. It's about the growth is going into the higher margin Glen alluded to it the premium seats are driving vast majority of the seats that we're adding the capacity that we're adding is going into the low.

Speaker Change: Yes, I think consistent to many of the items that we talked about.

Speaker Change: At Investor Day, It really comes down to you know that.

Speaker Change: So called investments that we're making cost related to our people on the growth in seniority.

Speaker Change: We still have in 2025.

Speaker Change: Cost high margin core hub structures over 80% of the incremental capacity half of that growth of capacity is coming from the utilization.

Speaker Change: The fleet mainline and regional we expect the regionals to be backed up full flying of our assets. We have that capability. So that inefficiency, it's been sitting as part of our financials and our run rate associated with it.

Speaker Change: It's really getting better utilization out of our assets and investments that we made part of it is the fleet and network it's about.

Speaker Change: The growth is going into the higher margin Glen alluded to it the premium seats are driving vast majority of the seats that we're adding the capacity that we're adding is going into the low cost high margin core hub structures over 80% of the incremental capacity.

Speaker Change: The workforce the delta teams and contractors.

Speaker Change: Put that capability in Ed really push us to the team to put that capability and get that operational excellence as we restore the airline and we're growing in to that experience. So this year you saw us grow the airline.

Speaker Change: Half of the growth of capacity is coming from the utilization.

Speaker Change: 6% and an average head count was.

The fleet mainline and regional we expect the regionals will be back to full flying of our assets. We have that capability. So that inefficiency has been sitting as part of our financials and our run rate associated with it.

Speaker Change: Up to we ended the year on a year over year basis flat.

Speaker Change: As we start to now step down into 3% to 4% growth that you are starting to see that that experience come through and getting that and then we think in delta we have the unique element or as it relates to maintenance John and the team at Tac ops.

Speaker Change: The workforce the delta teams and contractors.

Speaker Change: Put that capability in <unk>.

Speaker Change: Although the volume of activity.

Ed really push us to the team to put that capability and get that operational excellence as we restore the airline and we're growing in to that experience. So this year you saw us grow the airline.

That will start to normalize and then you get the improvement in that whole maintenance supply chain.

Speaker Change: Turnaround times are still they talked about at Investor day, well above historical levels. They were stable in 2024.

Speaker Change: 6% on an average head count was.

Speaker Change: But in 2025, we expect to start to make progress. The question will be how much progress as the industry make and we want to be part of leading that improvement and driving that efficiency and that team there gaining experience. So across all of these I wouldn't say there were network efficiencies inefficiencies I'd say just across the company.

Up to we ended the year on a year over year basis flat as we start to now step down into 3% to 4% growth that you are starting to see that that experience come through and getting that and then we think at Delta we have the unique element or as it relates to maintenance John and the team at Tech ops.

Speaker Change: Although the volume of activity.

Speaker Change: We have the opportunity for broad based efficiencies and.

Speaker Change: That will start to normalize and then you get the improvement in that whole maintenance supply chain.

Speaker Change: Grow into our airports those will over what time and then.

Speaker Change: Turnaround times are still they talked about at Investor day, well above historical levels. They were stable in 2024.

Speaker Change: We also talked about this at Investor Day, I think we're just at the doorstep of what technology can unlock over the long term and that we wont see big big dollars associated with that in 'twenty, five, but thats multi multi year for the next three to five years that we're quite excited about what that can do for the company.

Speaker Change: Thank you both for the answers.

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

Speaker Change: We have the opportunity for broad based efficiencies and.

Connor Cunningham: Hi, everyone. Thank you Glen obviously, a really really solid start for <unk>, but theres a lot of moving parts. This year from from the calendar and I think you benefited from the Max grounding.

Speaker Change: Grow into our airports those will over what time and then.

Connor Cunningham: So your comps are actually particularly difficult. So shouldn't we expect a somewhat strong sequential acceleration into the spring just trying to understand if like your actual core results are even stronger than what you're reporting here today, even though even though those those really good too as well just any thoughts there. Thank you.

Speaker Change: Excited about what that can do for the company.

Speaker Change: Thank you both for the answers.

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

Speaker Change: I would just say.

Connor Cunningham: We're experiencing a very very strong demand period.

Connor Cunningham: As we see our sales in January we usually don't post record sales. We've had two of our top record sales base since the beginning of the year.

Speaker Change: Hi, everyone. Thank you Glen obviously, a really really solid start for <unk>, but there is a lot of moving parts. This year from from the calendar and I think you benefited from the Max grounding.

Connor Cunningham: And so.

Connor Cunningham: So I think early signs are that this is going to be a very very strong year for us it's too early to call the second and third and fourth quarters.

Speaker Change: So your comps are actually particularly difficult. So shouldn't we expect a somewhat strong sequential acceleration into the spring just trying to understand if your actual core results are even stronger than what you're reporting here today, even though even though both of those really good too as well just any thoughts there. Thank you.

Connor Cunningham: What we can see in the first quarter and maybe into April is a really really strong demand across all entities.

Connor Cunningham: Helpful and then maybe yes.

Connor Cunningham: Yes, I think a lot of that.

Connor Cunningham: Okay.

Speaker Change: I would just say, we're experiencing a very very strong demand period.

Connor Cunningham: Surround the idea of what kind of supply in the us domestic market.

There is an argument to be made that there is an even better supply story on the international side.

Speaker Change: As we see our sales in January we usually don't post record sales. We've had two of our top record sales days since the beginning of the year.

Connor Cunningham: Bodies are hard to come by.

Connor Cunningham: There are some engine issues there as well can you just talk about the international setup as you look from a supply standpoint, and what that could mean for for the Atlantic. It again this year. Thank you.

Speaker Change: And so I think early signs are that this is going to be a very very strong year for us it's too early to call the second and third and fourth quarters, but what we can see in the first quarter and maybe into April is a really really strong demand set across all entities.

Connor Cunningham: We're really really excited about the way the spring and summer are shaping up in terms of competitive capacity in the Trans Atlantic.

I think all the basis points are in there for another record year in the Trans Atlantic again early in the booking we had a real big transatlantic booking season coming up over the next month and a half as people firm up their plans for summer travel, but I expect that we're going to see a very very robust returns and I'd also point out that last.

Speaker Change: Helpful and then maybe.

Speaker Change: Yes, I think a lot of young.

Speaker Change: Just around the idea of more supply in the us domestic market.

Speaker Change: Think theres an argument to be made that there is an even better supply story on the international side.

Speaker Change: Bodies are hard to come by.

Speaker Change: There is some engine issues there as well can you just talk about the international setup as you look from a supply standpoint, and what that could mean for for the Atlantic again. This year. Thank you.

Connor Cunningham: Here, we had the Olympics in Paris, which was a very big negative for us as we pass through the summer quarters starting in late June.

Connor Cunningham: Through July and August peak, so I think not only do we have a great competitive dynamic, but we also have some things that are uniquely beneficial to delta as you look at this summer's performance in the Trans Atlantic versus last summer knowing how big we are in Paris.

Speaker Change: We're really really excited about the way the spring and summer are shaping up in terms of competitive capacity in the Trans Atlantic.

Speaker Change: I think all of the basis points are in there for another record year in the Trans Atlantic again early in the booking we had a real big Trans Atlantic booking season coming up over the next month and a half as people firm up their plans for similar travel, but I expect that we're going to see a very very robust returns and I'd also point out that last.

Connor Cunningham: Awesome. Thank you.

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

Speaker Change: Hi, everyone. Thanks, so much for the time.

Speaker Change: Here, we had the Olympics in Paris, which was a very big negative for us as we pass through the summer quarter, starting in late June and through July and August peak. So I think not only do we have a great competitive dynamic, but we also have some things that are uniquely beneficial to delta as you look at this summer's performance in the Trans Atlantic versus Ly.

Tom Fitzgerald: Could you maybe elaborate a little bit on what you're seeing across customer segments.

Tom Fitzgerald: Business and leisure as well as by age cohort, so maybe boomers and Gen X versus versus some of the millennials.

Speaker Change: Sure I'm happy to report first on the second part of the question. The boomers are driving the premium being a boomer myself.

Speaker Change: Sure.

Speaker Change: We are in Paris.

Speaker Change: I would have us driving our premium results, which is I think great for now but also great for later, because we know as people continue as the cohort continues to age out and the new generation passes that threshold of wanting to buy a more premium products and services. The newer generation is wealthier and we.

Speaker Change: Awesome. Thank you.

Thank you. Your next question is coming from Tom Fitzgerald from TD Cowen Your line is live.

Hi, everyone. Thanks, so much for the time.

Tom Fitzgerald: Could you maybe elaborate a little bit on what you're seeing across custom.

We have a bigger share of that generation. So excited not only for today as the boomers are driving at but excited for tomorrow as we pass it onto the next generations.

Speaker Change: Customer segments.

Speaker Change: Business and leisure as well as by age cohort, so maybe boomers and Gen X versus versus some of the millennials.

Speaker Change: So that's the question on and then across the spectrum consumer leisure very strong demand across corporates very strong unit revenues in the fourth quarter as we pointed out our sales in the fourth quarter up 10% on corporate sales those trends are continuing into the first quarter. So continued very strong growth our survey.

Speaker Change: Sure I'm happy to report on the second part of the question. The boomers are driving the premium and being a boomer myself I'm proud of us driving our premium results, which is I think great for now but also great for later, because we know as people continue as the cohort continues to age out and the new generation passes that threshold of wanting to buy.

Speaker Change: As we survey the corporate traveler every year that corporate travel managers I think the number was 90% expected to exceed or meet last year's spend so all the components that we see are driving a really robust demand drop as we sit here in January.

Speaker Change: Our more premium products and services the newer generation is wealthier.

Speaker Change: And it's we have a bigger share of that generation. So excited not only for today as the boomers are driving it but excited for tomorrow as we pass it onto the next generations.

Speaker Change: So that's the question on and then across the spectrum consumer leisure very strong.

Speaker Change: That's really helpful. Thanks, So much Glenn and then just as a follow up I'd love to hear what what Youre seeing in some of your core hubs, we've seen obviously southwest pulling back in Atlanta, and a lot of.

Manned across corporates very strong unit revenues in the fourth quarter as we pointed out our sales in the fourth quarter up 10% on corporate sales those trends are continuing into the first quarter. So continued very strong growth our surveys.

Speaker Change: Low cost and ultra low cost pulling back significantly out of places like Minneapolis. So curious if what you're seeing in bookings and yields there. Thanks again for the time and congrats on the quarter.

Speaker Change: The corporate traveler every year that corporate travel managers I think the number was 90% expected to exceed or meet last year's spend so all the components that we see are driving a really robust demand drop as we sit here in January.

Speaker Change: Alright.

Speaker Change: Start giving of hub by hub yield and traffic information, but I would say that we're very encouraged by the competitive dynamics that are going on in all of our hubs as we head into the spring and summer with the possible exception of Boston, which is at an elevated capacity level, but I would say surprisingly resilient for us and the off peak.

Speaker Change: Boston is a very seasonal market and we're in really the low season for Boston right now and it's performing incredibly well. Despite the fact that it's got a significant amount of industry capacity on it.

Speaker Change: Low cost and ultra low cost pulling back significantly out of places like Minneapolis. So curious just what you're seeing in bookings and yields there. Thanks again for the time and congrats on the quarter.

So.

Speaker Change: I think we're we like where we're sitting here of course, the wildfires in Los Angeles are not helping Los Angeles origin and destination.

Speaker Change: Alright.

Speaker Change: But there's always something going on.

Speaker Change: Really really good about where we sit today.

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

Good morning, everybody and citizens probably for Glen.

Speaker Change: My thoughts as well the topic with fuel recapture.

Speaker Change: And we're not too distant past.

Speaker Change: No.

I think we're we like where we're sitting here of course, the wildfires in Los Angeles are not helping Los Angeles origin and destination.

Speaker Change: No.

Speaker Change: Professional lifetime, it could take up to a year for windstream to recalibrate, the higher input costs higher fuel costs, but given the evolution we've been on.

Speaker Change: But there's always something going on and I feel really really good about where we sit today.

Speaker Change: Things like higher fuel can be recaptured somewhere inside of two quarters.

Speaker Change: When we think about that past precedent, though yield production.

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

Speaker Change: I don't know kind of modest.

Speaker Change: One was for our environmental and building the most market. So thats my question with yields already being pretty strong do you think that that alters the calculus does it make it harder and longer to recapture higher fuel or do we still get to that 100% recapture mark inside of a couple of quarters.

Speaker Change: Good morning, everybody and citizens probably for Glen.

As well the topic with fuel recapture.

Speaker Change: One point in the not too distant past.

Speaker Change: My professional lifetime.

Speaker Change: Could take up to a year for windstream to recalibrate, the higher input costs higher fuel costs, but.

Speaker Change: Evolution, we've been on.

Speaker Change: I believe that it's never been shorter.

Speaker Change: Right, you know higher fuel can be recaptured somewhere inside of two quarters.

Speaker Change: That's a personal belief based on how the industry is responding and the fact that the bottom half of the industry is under intense pressure.

Speaker Change: When we think about that past precedent, though yield production.

Speaker Change: To continue to improve its results. So I think that backdrop is what you have to focus on.

Speaker Change: I don't know kind of modest.

Speaker Change: Today, we are in a strong environment at least in most markets. So thats my question with yields already being pretty strong do you think that that alters the calculus does it make it harder and longer to recapture higher fuel or do we still get to that 100% recapture mark inside of a couple of quarters.

Speaker Change: Terms of fuel recapture the industry needs to recapture that fuel faster than it has in the past.

Speaker Change: Yeah, and not only fuel, but I mean margins.

Speaker Change: Margins are.

Ed Bastian: Very low levels and they have captured non fuel cost and fuel cost improve margins overall, so I think thats the backdrop that Ed talked about in regards to the improving industrial industry backdrop that we're sitting in.

Speaker Change: I believe that it's never been shorter.

Speaker Change: That's a personal belief based on how the industry is responding and the fact that the bottom half of the industry is under intense pressure.

Speaker Change: Excellent and then just a quick follow up on corporate post Covid Delta some of your competitors have talked about.

Speaker Change: To continue to improve its results. So I think that backdrop is what you have to focus on.

Speaker Change: Changes in how business travelers are flying that's had some impact on pay a weak demand.

Speaker Change: Fuel recapture the industry needs to recapture that fuel faster than it has in the past.

Speaker Change: Somewhat elongated booking curve.

Speaker Change: There is my question as corporate continues to rebound is corporate behavior.

Speaker Change: And not only fuel, but I mean.

Speaker Change: Margins are.

Very low levels and they have captured non fuel costs and fuel costs improve margins overall, so I think that's the backdrop that Ed talked about in regards to the improving industrial industry backdrop that we're sitting in.

Speaker Change: Beginning to revert back to the way that it used to be or are those behavioral trends.

Speaker Change: What youre seeing today.

Speaker Change: Since Tim with the.

Speaker Change: Post Covid world that women thanks in advance.

Speaker Change: Excellent and then just a quick follow up on corporate post Covid Delta and some of your competitors have talked about.

Speaker Change: I'd say on the margin, it's reverting, but its still different.

Speaker Change: Changes in how business travelers are fine that's had some impact on weak demand.

Speaker Change: On the margin close in has picked up because of the booking curve at elongated.

Speaker Change: Covid recovery.

Speaker Change: Somewhat elongated booking curve.

Speaker Change: Sure.

Speaker Change: Does it come in over the past year, or so and yes, Tuesday, and Wednesday travel is picking up so.

Speaker Change: There is my question corporate continues to rebound is corporate behavior.

Speaker Change: I would say is it's not back to where it was but on the margin is coming more towards what it was pre COVID-19.

Speaker Change: Beginning to revert back to the way that it used to be or are those behavioral trends.

Speaker Change: Now that youre seeing today.

Speaker Change: Okay very interesting thanks, so much.

Speaker Change: With the post Covid World that we live and thanks in advance.

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

Speaker Change: I'd say on the margin, it's reverting, but its still different.

Speaker Change: Hey, Thanks, just to maybe continue that theme as.

Speaker Change: On the margin close in has picked up because the booking curves had elongated.

Speaker Change: As we play back the fourth quarter.

Speaker Change: Does the revenue surprise really driven by there was some stronger post election trends, which obviously some of the hotels called out.

Speaker Change: Covid recovery.

Speaker Change: Sure.

Speaker Change: Does it come in over the past year, or so and yes, Tuesday, and Wednesday travel is picking up.

Speaker Change: But do you think the compressed period between Thanksgiving and peak holidays.

Speaker Change: So.

Speaker Change: I would say is it's not back to where it was but on the margin is coming more towards what it was pre COVID-19.

Speaker Change: Actually stimulated compression in corporate and how would you mark that corporate recovery.

Speaker Change: Okay very interesting thanks, so much.

Speaker Change: Excluding some of the seasonal noise into 2025.

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

Speaker Change: I think clearly for the month of December.

Speaker Change: Hey, Thanks, just to maybe continue that theme as.

Speaker Change: The late Thanksgiving is helpful for the month, but when you put those two months together I don't think it's that much different whether it compresses or adjusted.

We play back the fourth quarter.

Speaker Change: Does the revenue surprise really driven by there was some stronger post election trends, which obviously some of the hotels called out.

Speaker Change: Next year.

Speaker Change: Remember that return date for Thanksgiving will be in November and December was essentially one day.

Speaker Change: But do you think the compressed period between Thanksgiving and peak holidays.

And I think we'll see similar results next year I think the big surprise for US is again, when we did earnings right. After the election right before right. After the election, and we haven't really seen that strength of sales.

Speaker Change: Actually stimulated compression in corporate and how would you mark that corporate recovery X.

Speaker Change: Excluding some of the seasonal noise.

Speaker Change: 2025.

Speaker Change: Leading into the election and it was a definite uptick you could see.

Speaker Change: I think clearly for the month of December.

Speaker Change: And you could feel post election that goes out for 365 days.

Speaker Change: The late Thanksgiving is helpful for the month, but when you put those two months together I don't think it's that much different whether it compresses or adjusted growth next year.

Speaker Change: People felt more confident and they felt a little bit less confident before the election.

Speaker Change: The big inflection point.

Speaker Change: Remember the return date for Thanksgiving will be in November and December.

Glenn: That's helpful and then just for a follow up Glenn.

Speaker Change: Essentially one day.

Speaker Change: In Latin what inning are we in for the rebuild of that entity.

Speaker Change: It has been in investment mode. There for a while when would you expect to enter harvest mode.

Speaker Change: Yes.

Speaker Change: I think as we indicated in the script we're we're.

Speaker Change: Leading into the election and it was a definite uptick.

Speaker Change: We are toning down our investment in <unk>, we've got most of the quarters in place that we need to feed each other and we've worked on that coming out of Covid. So I wouldn't say, we're moving into harvest, but we're definitely moving into a more mature.

Speaker Change: And you could feel post election that goes out for 365 days.

Speaker Change: People felt more confident and they felt a little bit less confident before the election and there was a big inflection point.

Speaker Change: Physician and deep South America.

Speaker Change: That's helpful and then just for a follow up Glenn.

Speaker Change: Thank you.

Speaker Change: In Latin what inning are we in for the rebuild of that entity.

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

Speaker Change: Delta has been in investment mode. There for a while when would you expect to enter harvest mode.

Shannon Doherty: Hi, Good morning, everyone and thanks for taking my question, maybe just one for Glenn here with premium revenue question Kindjal PC carbon could it be possible without the Rodney gap Akshay, Steve the same between the two even as you're growing your premium fleet mix, just given higher yields and overall enhanced product offering.

Speaker Change: Okay.

Speaker Change: I think as we indicated in the script.

Speaker Change: We are toning down our investment in <unk>, we've got most of the quarters in place that we need to feed each other and we worked on that coming out of Covid. So I wouldn't say, we're moving into harvest, but we're definitely moving into a more mature.

Speaker Change: Alright, well I think.

Speaker Change: Our plan for 2025 indicate.

Speaker Change: Assumes that we will continue to keep the premium revenues growth.

Speaker Change: Physician and deep South America.

Speaker Change: Thank you.

Trajectory that we're on I think the upside surprise for us would be.

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

Speaker Change: Kevin starts to accelerate through the year, given the fact that capacity in the industry level has come down significantly in that pool.

Speaker Change: Hi, Good morning, everyone and thanks for taking my question, maybe just one for Glenn here with premium revenue growth continued to outpace any carbon could it be possible without the Rodney gap Akshay, Steve the same between the two even as you're growing your premium fleet mix, just given higher yields and overall enhanced product offerings.

Speaker Change: So that's how I would frame 2025 has continued trends that we're seeing in premium and potential upsides in the main cabin improving significantly.

Mike: Thank you Mike.

Follow up here what are your thoughts on the calendar shift that a later Easter this year could it be possible that.

Speaker Change: Alright, well I think our plan for 2025.

Speaker Change: Keith.

Speaker Change: Assumes that we will continue to keep the premium revenues growth.

Mike: Robin positive in both the March and June quarters as travelers take can you trust.

Dejectory that we're on I think the upside surprise for us would be.

Mike: One.

Mike: When was the last year.

Mike: Yeah.

Mike: Spring break Easter.

Speaker Change: Main cabin starts to accelerate through the year, given the fact that capacity in the industry level has come down significantly in that pool.

Mike: I didn't really hear.

Mike: On Easter shift of Easter shift that you've seen.

Mike: <unk>.

Speaker Change: So that's how I would frame 2025 has continued trends that we're seeing in premium and potential upside being in the main cabin improving significantly.

Mike: Usually a late Easter is bad for March but good for the airline.

So we'll see.

Mike: We'll see how that plays out this year, but.

Mike: As you say.

Speaker Change: Thank you.

Mike: Longer that travel peak period, the better the general returns are for the season, but then in months play out differently, because you compress the PPP, which is.

Follow up here what are you saw some calendar shifts that a later Easter this year could it be possible that if a.

Speaker Change: Robin positive in both the March and June quarters as travelers take can you trust.

Mike: Which is not a good thing, but the longer season offset that.

Speaker Change: Instead of one.

Speaker Change: When was the last year.

Speaker Change: Spring break Easter.

Mike: Thank you.

Speaker Change: I didn't really hear your thoughts on.

Speaker Change: The Easter shift of Easter shift could you.

You were at <unk>.

Speaker Change: Thank you.

Mike: Yes.

Speaker Change: Usually a late Easter is bad for March but good for the airlines.

Speaker Change: Compressed peak. Thank you. Your next question is coming from Ravi Shanker from Morgan Stanley. Your line is live.

So we will see.

Speaker Change: We'll see how that plays out this year, but.

Ravi Shanker: Great. Thanks, good morning, and happy new year everyone.

Speaker Change: As you say.

Speaker Change: And then if I can revisit the topic of Europe.

Speaker Change: The longer that travel peak period.

Speaker Change: Just this kind of unusual strength in <unk>, you elaborate that a little bit but are you confident that this is not pulling forward from later in the summer I am very confident.

Speaker Change: Better the general returns are for the season, but then in months play out differently, because you've compressed the PPP which is.

Speaker Change: Which is not a good thing, but the longer season offset.

Speaker Change: I am very confident this is this is another year of and if you think about the baby boomers travel.

Speaker Change: Thank you.

Speaker Change: The threat all these together you say who is driving premium revenue. It's the boomers, who is driving why is that happening the euro at 102.

You were at <unk>.

Speaker Change: Compressed.

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

Speaker Change: Go to a restaurant in New York and then go to a restaurant in Europe, you will see a vast difference in your bill and so this is a great time to travel to Europe people are seeing.

Ravi Shanker: Great. Thanks, good morning, and happy new year everyone.

Speaker Change: Glen if I can revisit the topic of Europe.

Speaker Change: Just this kind of unusual strength in <unk>, you elaborate that a little bit but are you confident that this is not pulling forward from later in the summer I am very confident.

Speaker Change: U S consumers are very smart they figure these things out pretty quickly and we're seeing robust demand in the off peak and I am sure that the peak is going to be even better.

Speaker Change: I think a lot depends on the quality of the food as well.

Speaker Change: I'm very confident this is this is another year of and if you think about the baby boomers travel.

Speaker Change: As a follow up how do we think about the pricing algorithm between main cabin mid cabin and the front of the play and kind of as you talk about more momentum in main cabin RASM.

Speaker Change: The threat all these together you say who is driving premium revenue. It's the boomers, who is driving why is that happening the euro at 102.

Speaker Change: Like do you adjust.

Speaker Change: Go to a restaurant in New York and then go to a restaurant in Europe, we'll see.

Speaker Change: Clean pricing Glenn are in real time to adjust.

Speaker Change: See a vast difference in your bill and so it is a great time to travel to Europe people are seeing.

How do you see that flow through to the cabin right I think one of the things that one of the reasons, we decided to really focus on premium back 10, or 15 years ago was we wanted to control our own destiny. So the fact that we've been able to get this premium revenue growth. Despite the fact that main cabin has been under a lot of duress.

Speaker Change: U S consumers are very smart they figure these things out pretty quickly and we're seeing robust demand in the off peak and I'm sure that the peak is going to be even better.

I think a lot depends on the quality of the food as well.

Speaker Change: As a follow up how do we think about the pricing algorithm between main cabin mid cabin and the front of the plane instead of as you talk about more momentum in main cabin RASM.

Speaker Change: I would expect us to be able to continue to optimize that but we've tried to disconnect main cowan from premium products in terms of our pricing ability and I think that will be our strategy. We don't want to price ourselves out we want people to continue to grow and experienced this because once they do they tend not to go back so our.

Speaker Change: Like do you adjust.

Speaker Change: Clean pricing Glenn are in real time to adjust.

How do you see that flow through to the.

Speaker Change: Brian I think one of the things that one of the reasons, we decided to really focus on premium back 10, or 15 years ago was we wanted to control our own destiny. So the fact that we've been able to get this premium revenue growth. Despite the fact that main cabin has been under a lot of duress I would expect us to be able to continue to optimize that.

Speaker Change: As we continue to put more premium seats and.

Speaker Change: Driving premium revenues is going to come from higher lows not necessarily hard yields.

Speaker Change: Understood. Thank you.

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

Speaker Change: Hey, good morning, everyone I guess, Glenn maybe when we look out past one the first quarter and I know, it's early but domestic schedule showing kind of high single digit growth in <unk>.

Speaker Change: But we've tried to disconnect main cowan from premium products in terms of our pricing ability and I think that will be our strategy. We don't want to price ourselves out we want people to continue to grow and experienced this because once they do they tend not to go back so our.

Speaker Change: It's obviously relatively high to the 3% to 4% full year outlook.

Speaker Change: So when I look historically this can come in anywhere from one to three points do you think that's reasonable and then any any comments or color on how you think your capacity to trend throughout this year.

Speaker Change: As we continue to put more premium season.

Speaker Change: Driving premium revenues is going to come from higher lows not necessarily hard yields.

Understood. Thank you.

Speaker Change: Well. Thank you for that question because I've been looking for the opportunity to give a little bit of context of the shape of the.

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

Speaker Change: The growth in capacity first quarter, we're going to be probably somewhere between four and a half and five.

Andrew: Hey, good morning, everyone.

Speaker Change: Glen maybe when we look out past one the first quarter and I know, it's early but domestic schedule showing kind of a high single digit growth in <unk>.

I think we are $4 seven loaded right now, we'll see what completion of somewhere between four five and five I would assume depending on how completion factor plays out second quarter, we have not really loaded.

Speaker Change: It's obviously relatively high to the 3% to 4% full year outlook, but when I look historically this can come in anywhere from one to three points.

Speaker Change: Our schedules yet youll start to see as we can I believe April.

Speaker Change: That's reasonable and then any any comments or color on how you think your capacity to trend throughout this year.

Speaker Change: Part of vehicles going in which will be.

Speaker Change: A couple of points reduction of what we have selling out there and you'll see us continue to bring that back into line I would expect the June July and August would be our low point for year over year growth.

Speaker Change: Well. Thank you for that question because I've been looking for the opportunity to give a little bit of context of the shape.

Speaker Change: The growth in capacity first quarter, we're going to be probably somewhere between four and a half and five.

Speaker Change: In the off peak.

With a little bit more growth in the off peak to try and get better utilization back to Dan's point of how.

Speaker Change: I think we are $4 seven loaded right now, we'll see what completion of somewhere between four five and five I would assume depending on how completion factor plays out second quarter, we have not really loaded.

How do we work the trade between unit cost and unit revenues.

Speaker Change: Sure that we're optimizing our margins.

Speaker Change: That's great color. Thank you and then maybe just sticking on the capacity front obviously.

Our schedules yet youll start to see this weekend I believe April.

Speaker Change: You've spoken to we've seen the strong trends in the Atlantic clearly the demand is there how should we think about your growth across the Atlantic. This year will it be system average above or below just just thinking about how that could trend as we progress through the year. Thank you.

Speaker Change: Part of vehicles going on which will be a couple of points reduction of what we have selling out there and you'll see us continue to bring that back into line I would expect the June July and August would be our low point for year over year growth.

Speaker Change: In the off peak.

Speaker Change: A little bit more growth in the off peak to try and get better utilization back to Dan's point of how do we work the trade between unit cost and unit revenues to ensure that we're optimizing our margins.

Speaker Change: For the Trans Atlantic our schedules are pretty well loaded.

There may be.

Speaker Change: Some tweaks around the edges as we move through them with aircraft availability and crew availability, but I think largely we are in place and is slightly above the average not significantly.

That's great color. Thank you and then maybe just sticking on the capacity front.

Speaker Change: Great. Thank you Glenn.

Speaker Change: Thank you. Your next question is coming from David Vernon from Bernstein. Your line is live.

Speaker Change: Hey, good morning, guys and thanks for taking the question, so Glenn going back to corporate.

Speaker Change: Demand right now the 10% growth is there a way to that you can help us understand kind of how much of that sort of volume how much of that yields and then obviously last year was.

<unk> are pretty well loaded.

There may be.

Speaker Change: Is it pretty.

Speaker Change: Some tweaks around the edges as we move through them with aircraft availability and crew availability, but I think largely we are in place and it's slightly above the average not significantly.

Speaker Change: Interesting year for corporate growth of American taking a step back southwest participating more in Gds's I'm, just trying to get a sense for maybe how share is trending in corporate from your perspective.

Great. Thank you Glenn.

Speaker Change: So we don't comment on other People's share what we can say is our share is at or near record highs every month.

Speaker Change: Thank you. Your next question is coming from David Vernon from Bernstein. Your line is live.

Speaker Change: And so we've seen no deterioration in our share.

David Vernon: Hey, good morning, guys and thanks for taking the question, so Glenn going back to corporate.

Speaker Change: In the past year and the forward sales and then.

David Vernon: Demand right now the 10% growth is there a way to that you can help us understand economics that sort of volume how much of that yields and then obviously last year.

Speaker Change: As it relates to.

Speaker Change: These trends.

Speaker Change: It was primarily early in the year driven by traffic and then as we headed towards the end of the year. It was driven by both a mix of traffic and yields. So now we have yields positive and traffic positive contributing to that number.

David Vernon: Was it pretty.

David Vernon: Interesting year for corporate growth with American taking a step back southwest participating mooring gds's I'm, just trying to get a sense for maybe how share is trending and incorporate from your perspective.

Speaker Change: Excellent. Thank you and then.

David Vernon: So we don't comment on other People's share what we can say is our share is at or near record highs every month.

Speaker Change: As you think about that the ASM growth the shape that it was really helpful. Can you can you help us understand kind of the balance between international and domestic as we progress through the year.

David Vernon: And so we've seen no deterioration in our share.

Speaker Change: Yes, I think.

David Vernon: In the past year and the forward sale and then.

Speaker Change: Probably a little bit higher on international.

<unk> being the lowest growth rates as we move through the year.

David Vernon: As it relates to.

David Vernon: These trends.

Speaker Change: Continuing with the Pacific the run rates and when we get to the latter part of this year the Pacific will come down significantly.

David Vernon: It was primarily early in the year driven by traffic and then as we headed towards the end of the year. It was driven by both a mix of traffic and yields. So now we have yields positive and traffic positive contributing to that number.

Speaker Change: But.

Speaker Change: But the Atlantic is going to be just slightly ahead of our our system average and domestic probably just slightly below.

David Vernon: Excellent. Thank you and then.

Speaker Change: Alright. Thank you guys. Thanks for the time.

As you think about the ASM growth the shape for us that was really helpful. Can you can you help us understand kind of the balance between international and domestic as we progress through the year.

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

Speaker Change: Hey, good morning, everyone.

David Vernon: Yes, I think probably a little bit higher on international.

Savi: If I might on the on the Capex front and the aircraft deliveries I'm guessing your Capex astellas thinking.

David Vernon: <unk> being the lowest growth rates as we move through the year.

Speaker Change: <unk> is around $5 billion.

David Vernon: And then continuing with the Pacific the run rates and when we get to the latter part of this year the Pacific will come down significantly.

Speaker Change: But you did have kind of 46 deliveries in 'twenty, sorry, 38 versus kind of a 46 assumption just curious what youre expecting in 'twenty.

David Vernon: But.

Speaker Change: That 5 billion capex or so at that level, yes.

David Vernon: But the Atlantic is going to be just slightly ahead of our our system average and domestic probably just slightly below.

Speaker Change: Yes.

Speaker Change: $5 billion a good level.

Speaker Change: We had a few less deliveries in.

David Vernon: Alright. Thank you guys. Thanks for the time.

Speaker Change: 24 than we expected, we expect to right around 40%.

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

Speaker Change: 40 ish year in 2025.

Savi: Hey, good morning, everyone.

Speaker Change: Got it.

Speaker Change: If I might on the on the Capex front and the aircraft deliveries I'm guessing your Capex is still thinking is around $5 billion.

Speaker Change: And then maybe if I can follow up.

Speaker Change: On the non Opex side any color you can provide on how we should think about it for for this year in terms of.

Speaker Change: You did have kind of 46 deliveries in 'twenty, sorry, 38 reps just kind of a 46 assumption just curious what you're expecting in 2000, and then is that.

Speaker Change: On the interest side, but also Kevin noninterest side.

Speaker Change: Yes, I think it will be think of it as flattish where you have a benefit.

Speaker Change: 5 billion capex or so at that level.

Speaker Change: The deleveraging, that's probably just under $100 million benefit and then you. The real question will be where does all the other pieces fall out pension finalizing it here is as we go through the month of January.

Speaker Change: Yes.

Speaker Change: $5 billion a good level.

Speaker Change: We had a few less deliveries in.

24 than we expected, we expect right around 40%.

Speaker Change: 40 ish here in 2025.

Got it.

Speaker Change: And then maybe if I can follow up with.

Speaker Change: Performed well it should be flattish to maybe a slight improvement we will see where we finally locked that in here as we get through January we have always the moving pieces with equity earnings from our partners.

Speaker Change: On the non Opex side any color you can provide on how we should think about it for for this year in terms of.

Speaker Change: On the interest side, but also Kevin noninterest side.

Speaker Change: Yes, I think it will be I think of it as flattish where you have a benefit.

Speaker Change: And whether that will be up or down and that progresses through the year. We benefited from that this past year as they were better than expected and that drove some of the improvement and we won't have that.

Speaker Change: The deleveraging.

Speaker Change: That's probably just under $100 million benefit and then you. The real question will be where does all the other pieces fall out pension finalizing it here is as we go through the month of January.

Speaker Change: Incurring.

Speaker Change: Gains that we had from some investments that we sold so that will be headwinds planet flattish right around that $800 million, Mark thereabouts and Julian team can kind of work with you if there's any dynamic as it relates to quarterly splits.

Speaker Change: I appreciate that thank you.

Speaker Change: Matthew will now go to our final analyst question.

Speaker Change: Certainly your final question is coming from Sheila <unk> from Jefferies. Your line is live.

Sheila: Thank you and good morning, great quarter guys.

Speaker Change: Just sticking on the comment if we could elaborate answer two questions first on just stepping up retirement share again in 2025, how do you think about the number of.

Speaker Change: Deliveries this year and how that signals to the strong Atlantic demand that youre seeing.

Speaker Change: And wondering if you're just any changes around how youre thinking about 7677 retirements.

Speaker Change: I appreciate that thank you.

Speaker Change: On the on the I'll take the retirement, a little bit on the retirements.

Speaker Change: Matthew will now go to our final analyst question.

Speaker Change: Just over 20 aircrafts.

Speaker Change: Certainly your final question is coming from Sheila <unk> from Jefferies. Your line is live.

Speaker Change: In 2024, and we expect in 2025 for that to be a little bit higher probably closer to 30 thereabouts.

Sheila: Thank you and good morning, great quarter guys maybe.

Sheila: Maybe just sticking on the comment if we could elaborate I have two questions first on just stepping up retirement share again in 2025, how do you think about the number of.

Speaker Change: We'll kind of see how this year progresses and how the fleet plan settles in for 2026, we'll be finalizing that late spring early summer associated with that but Thats a good thing it allows John and the team to have a material flow back into the Tac ops team and they are really good about having that back into the installed base and fleet.

Sheila: Deliveries this year and how that signals to the strong Atlantic demand that youre seeing.

Sheila: And wondering if you're just seeing any changes around how youre thinking about sort of six 7%.

Sheila: Retirements.

Sheila: On the I'll take the retirement, a little bit on the retirement.

Speaker Change: And driving efficiency associated with that.

Speaker Change: As it relates to our deliveries will be about 40, plus just about 12 to 13 of those in 2025 will be wide bodies that the mix of the $3 30 and $3 50.

Sheila: Retired just over 20 aircrafts.

Sheila: In 2024, and we expect in <unk>.

Sheila: In 2025 for that to be a little bit higher.

Sheila: Closer to 30 thereabouts.

Speaker Change: Thank you and maybe Dan if I could ask a follow up on just maintenance spend how do we think about it for 2025 as it works towards normalized levels.

Sheila: See how this year progresses and how the fleet plan settles in for 2026, we'll be finalizing that late spring early summer associated with that but Thats a good thing it allows John and the team to have a material flow back into the tech ops team and they are really good about having that back into the installed base and fleet and draw.

Speaker Change: I think it's going to move towards normalized levels, we should see an improvement year over year.

Speaker Change: We start to see that we're going to invest a little bit more year over year in the first quarter and then you'll see it start to step down, but the normalization of that doesn't occur in one year, it's over multiple years.

Sheila: Living efficiency associated with that.

Sheila: As it relates to our deliveries will be about 40, plus just about $12 13 of those in 2025 will be wide bodies that the mix of the $3 30 and $3 50.

Speaker Change: Understood. Thank you.

Speaker Change: Matthew will now move to the media portion of the question.

Thank you and maybe Dan if I could ask a follow up on just maintenance spend how do we think about it for 2025 as it works towards normalized levels.

Speaker Change: Certainly at this time will be conducting a Q&A session for media questions. If you have any questions or comments. Please press star then one on your phone. Please hold while we poll for questions.

Speaker Change: I think it's going to move towards normalized levels, we should see an improvement year over year.

Speaker Change: Understood. Thank you.

Speaker Change: Thank you. Your first question is coming from Leslie Joseph from CNBC Youre.

Speaker Change: Matthew will now move to the media portion of the question.

Speaker Change: <unk> is live.

Speaker Change: Hi, Good morning, everybody just wanted to ask about Los Angeles flights can you talk about the level of cancellations or delays that youre seeing just kind of given that even in areas that aren't affected just kind of like limited resources.

Speaker Change: Yes.

Speaker Change: To getting around the city and do you expect any material impact and then second on the incoming administration and tariffs do you have the ability to take planes exclusively from mobile and <unk>.

Speaker Change: Narrow bodies and anything else that youre doing to prepare for potential tariffs. Thanks.

Speaker Change: Thank you. Your first question is coming from Leslie Joseph from CNBC.

On the Los Angeles wildfires, we monitor sales on a daily basis by geographic region, and we have seen a decline in sales not a wholesale reduction in uptick in cancellations, but a decline in sales. During this period. So we will see.

Speaker Change: Your line is live.

Leslie Joseph: Hi, good morning, everybody.

Speaker Change: Just wanted to ask about Los Angeles flights can you talk about the level of cancellations or delays that youre seeing just kind of given that even in areas that aren't affected.

Speaker Change: I think as soon as the period ends we can probably put a wrapper around how much we thought that costs us, but I don't think its going to be significant to the quarter hopefully not.

Leslie Joseph: Limited resources.

Leslie Joseph: Difficulty getting around the city and do you expect any material impact and then second on the incoming administration and tariffs do you have the ability to take planes exclusively from mobile.

Speaker Change: Hey, Leslie it's Peter Carter on tariffs, we do have.

In the case of narrow bodies.

Leslie Joseph: Anything else that you are doing to prepare for potential tariffs. Thanks.

Speaker Change: Some I'll say.

Speaker Change: Alternative ways to receive delivery of aircraft to mitigate the impact of tariffs.

Speaker Change: On the Los Angeles wildfires, we monitor sales on a daily basis by geographic region, and we have seen a decline in sales not a wholesale reduction in an uptick in cancellations, but a decline in sales during this period. So we'll see.

Speaker Change: Which is what we used in the last Trump administration, our hope of course is that.

Speaker Change: That Airbus is not subject to tariffs because as we know.

Speaker Change: As soon as at the period ends we can probably put a wrapper around how much we thought that cost us, but I don't think its going to be significant to the quarter hopefully not.

Speaker Change: Substantial portion of those aircraft are produced in the U S and employee.

Speaker Change: <unk> of Americas.

Speaker Change: Hey, Leslie it's Peter Carter on tariffs, we do have.

Speaker Change: Thank you.

Speaker Change: Okay.

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

Leslie Joseph: Some I'll say.

Leslie Joseph: Alternative ways to receive delivery of aircraft to mitigate the impact of tariffs.

Speaker Change: Yes.

Alison Sider: Hi, Thanks, so much just curious.

Leslie Joseph: Which is what we used in the last Trump administration, our hope of course is that.

Speaker Change: Their environments.

Speaker Change: Are you seeing any indications or have any concerns that with higher fares there might be some inflation fatigue, among consumers, especially in basic or main cabin.

Leslie Joseph: That Airbus is not subject to tariffs because as we know a substantial portion of those aircraft are produced in the U S and employee.

Speaker Change: I think the answer to that is clearly no.

Speaker Change: We see robust demand, we see record sales and.

Leslie Joseph: <unk> of Americans.

Speaker Change: If you think about airline tickets, while coming out of Covid. There was an acceleration that reflected the new economics of the airlines last year the inflation for airline tickets was relatively benign so.

Leslie Joseph: Thank you.

Leslie Joseph: Okay.

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

Speaker Change: It's really driving volumes and slightly higher fares, but not anything that we think is going to destroy value over the medium or long term.

Alison Sider: Hi, Thanks, so much just curious.

Speaker Change: Fair environment are you seeing any indications or have any concerns that with higher fares there might be some inflation fatigue, among consumers, especially in basic or main cabin.

Speaker Change: Hi, Thanks.

Speaker Change: We've just seen other companies in other industries, we thinking of sustainability pledges and dei commitments and I'm. Just curious if there's anything you could share if there's anything delta is kind of reevaluating in either of those spaces.

Speaker Change: I think the answer to that is clearly no.

Speaker Change: We see robust demand, we see record sales and <unk>.

Speaker Change: Again.

Peter Carter: Good morning, It's Peter Carter No. We're not we are steadfast in our commitments because we think that they are actually critical to our business sustainability is about being more efficient in our operations and really DNI is about talent and thats been our focus and of course.

Speaker Change: If you think about airline ticket as well coming out of Covid. There was an acceleration that reflected the new economics of the airline last year the inflation for airline tickets was relatively benign so.

Speaker Change: It's really driving volumes and slightly higher fares, but not anything that we think is going to destroy value over the medium or long term.

The key differentiator at Delta is our people.

Ann: Thanks Ann.

Peter Carter: Thank you.

Ali Matthew: Thanks Ali Matthew we have time for one call one more if we could get one in please.

Speaker Change: Certainly your last question is coming from <unk> <unk> from Bloomberg News your line is live.

Ann: Again.

Good morning, It's Peter Carter No. We're not we are steadfast in our commitments because we think that there are actually critical to our business sustainability is about being more efficient in our operations and really DNI is about talent and thats been our focus and of course.

Hi, Thank you I wanted to go back to the impact.

Speaker Change: The impact of the La Flyers I'm, just wondering if over time after the fires themselves are largely put out.

Speaker Change: Do you expect perhaps a drop in demand in that area because all of these people who are who have lost their everything they have and are likely to be much less inclined to travel for a certain period.

Ann: The key differentiator at Delta is our people.

Ann: Thank you.

Speaker Change: Alright, I think unfortunately after natural disasters, we actually see an uptick in demand.

Speaker Change: Thanks Ali Matthew we have time for one call one more if we could get one in please.

Speaker Change: As people go into rebuild that insurance adjustments come from all over the country. So I would say until it's rebuilt you actually.

Speaker Change: Certainly your last question is coming from <unk> <unk> from Bloomberg News your line is live.

Speaker Change: Hi, Thank you I wanted to go back to the <unk>.

Speaker Change: Never.

Speaker Change: Natural disasters, a terrible thing and certainly something that.

Speaker Change: La Flyers I'm, just wondering if over time after the fires themselves are largely put out do.

Speaker Change: Our Hearts go out to everybody in Los Angeles are affected by this.

Speaker Change: But from a long term airline perspective, we faced hurricanes, we faced flooding, we faced all of that and usually the impacts are.

Speaker Change: In the beginning phases, followed by recovery.

Speaker Change: Alright, I think unfortunately after natural disasters, we actually see an uptick in demand.

Speaker Change: Asheville for example, we are actually having more traffic to Asheville than we did in the pre pandemic or the flooding experienced as people go into rebuild their homes and businesses.

Speaker Change: As people go into rebuild that insurance adjustments come from all over the country. So I would say until it's rebuilt you actually.

Speaker Change: So it's an unfortunate occurrence, but I think nothing that will long term impact.

Speaker Change: Never.

Speaker Change: Natural disasters, a terrible thing and certainly something that.

Speaker Change: Thank you.

Speaker Change: Our Hearts go out to everybody in Los Angeles are affected by this.

Speaker Change: That should conclude the call today, Matthew Thank you very much.

Speaker Change: But from a long term airline perspective, we faced hurricanes, we faced flooding, we faced all of that and usually the impasse.

Speaker Change: Thank you that concludes today's conference call. Thank you everyone for your participation.

Speaker Change: <unk>.

Speaker Change: In the beginning phases, followed by a recovery phase.

Speaker Change: Take Asheville for example, we are actually having more traffic to Asheville than we did in the <unk>.

Speaker Change: <unk>.

Speaker Change: <unk> experience as people go into rebuild their homes and businesses.

So it's an unfortunate occurrence, but I think nothing that will long term impact.

Thank you.

Speaker Change: That should conclude the call today, Matthew Thank you very much.

Speaker Change: Thank you that concludes today's conference call. Thank you everyone for your participation.

Okay.

Q4 2024 Delta Air Lines Inc Earnings Call

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