Q3 2025 Delta Air Lines Inc Earnings Call

Speaker #1: Good morning, everyone, and welcome to the Delta Air Lines September quarter 2025 financial results conference call. My name is Matthew, and I'll be your coordinator.

Operator: Good morning, everyone, and welcome to the Delta Air Lines September Quarter 2025 Financial Results Conference Call. My name is Matthew, and I'll be your coordinator. At this time, all participants are on a listen-only mode until we conduct a question and answer session following the presentation. 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 would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations and Corporate Development. Please go ahead.

Speaker #1: At this time, all participants are in listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded.

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

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

Speaker #2: Thank you, Matthew. Good morning, and thank you for joining us for our September quarter 2025 earnings call. Joining us today from Atlanta are our CEO, Ed Bastian, our President, Glen Hauenstein, and our CFO, Daniel Janki.

Julie Stewart: Thank you, Matthew. Good morning, and thank you for joining us for our September Quarter 2025 earnings call. Joining us today from Atlanta are CEO Ed Bastian, our President, Glen Hauenstein, and our CFO, Daniel Janki. Ed will open the call with an overview of Delta Air Lines' performance and strategy. Glen will provide an update on the revenue environment, and Dan will discuss costs on our balance sheet. After the prepared remarks, we'll take analyst questions. We ask you to please limit yourself to one question and a brief follow-up so we can get to as many of you as possible. After the analyst Q&A, we will move to our media questions. 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 #2: Ed will open the call with an overview of Delta's performance and strategy. Glen will provide an update on the revenue environment, and Dan will discuss costs and our balance sheet.

Speaker #2: After the prepared remarks, we'll take analyst questions. We ask you to please limit yourself to one question and a brief follow-up, so we can get to as many of you as possible.

Speaker #2: After the analyst Q&A, we will move to our media questions. As a reminder, today's discussion contains forward-looking statements that represent our beliefs or expectations about future events.

Speaker #2: All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in DELTA's SEC filings.

Julie Stewart: Some of the factors that may cause such differences are described in Delta Air Lines' SEC filings. We'll also discuss non-GAAP financial measures, and all results exclude special items unless otherwise noted. With that, I'll turn it over to Ed.

Speaker #2: We'll also discuss non-GAAP financial measures and all results exclude special items unless otherwise noted. And with that, I'll turn it over to Ed.

Speaker #3: Thank you, Julie. Good morning, everyone. We appreciate you joining us today. This quarter's results reinforce that DELTA's competitive advantages and differentiation have never been more evident.

Ed Bastian: Thank you, Julie. Good morning, everyone. We appreciate you joining us today. This quarter's results reinforce that Delta's competitive advantages and differentiation have never been more evident. In the September quarter, Delta's revenue growth and earnings came in at the top end of our expectations, delivering performance that we anticipate will lead the industry across all key financial measures. Revenue grew 4%, led by premium, corporate, and loyalty, reflecting the power of Delta's brand, the financial strength of our customer base, and improving industry fundamentals. We reported pre-tax income of $1.5 billion and earnings of $1.71 per share, with an 11.2% operating margin. Free cash was $830 million, bringing our year-to-date free cash flow to $2.8 billion. We generated a return on invested capital of 13%, five points above our cost of capital and in the top half of the S&P 500.

Speaker #3: In the September quarter, DELTA's revenue growth and earnings came in at the top end of our expectations, delivering performance that we anticipate will lead the industry across all key financial measures.

Speaker #3: Revenue grew 4%, led by premium, corporate, and loyalty. Reflecting the power of DELTA's brand, the financial strength of our customer base, and improving industry fundamentals.

Speaker #3: We reported pre-tax income of $1.5 billion and earnings of $1.71 per share, with an 11.2% operating margin. Pre-cash was $830 million, bringing our year-to-date pre-cash flow to $2.8 billion.

Speaker #3: We generated a return on invested capital of 13%, five points above our cost of capital, and in the top half of the S&P 500.

Speaker #3: Operationally, DELTA once again led the industry on reliability and customer experience. Through a busy summer, our teams delivered for our customers, and I want to thank them for their outstanding work and dedication.

Ed Bastian: Operationally, Delta once again led the industry on reliability and customer experience. Through a busy summer, our teams delivered for our customers, and I want to thank them for their outstanding work and dedication. Their professionalism and care create the trust that consumers have in the Delta brand. Sharing success with our people is core to our culture. We've accrued nearly $1 billion year to date towards next February's profit sharing because when Delta succeeds, so should our people. I also want to recognize the essential aviation workers, the controllers, TSA officers, federal air marshals, and many others who are keeping our system safe and secure during the ongoing government shutdown. Thank you for your professionalism and your commitment to the traveling public. We're hopeful that Congress will act to reopen the government as soon as possible.

Speaker #3: Their professionalism and care create the trust that consumers have in the DELTA brand. Sharing success with our people is core to our culture. We've recruited nearly 1 billion dollars year-to-date towards next February's profit sharing, because when DELTA succeeds, so should our people.

Speaker #3: I also want to recognize the essential aviation workers. The controllers, TSA officers, federal air marshals, and many others who are keeping our systems safe and secure during the ongoing government shutdown.

Speaker #3: Thank you for your professionalism and your commitment to the traveling public. We're hopeful that Congress will act to reopen the government as soon as possible.

Speaker #3: Now, turning to our outlook, our fundamentals are improving, and the positive momentum is continuing. Since July, travel demand has strengthened, led by a rebound in business travel, which was in the high single digits for the quarter.

Ed Bastian: Now, turning to our outlook, our fundamentals are improving, and the positive momentum is continuing. Since July, travel demand has strengthened, led by a rebound in business travel, which was up high single digits in the quarter. The U.S. economy remains on solid footing, and our customer base is financially strong, with rising preference for premium products and services. SkyMiles membership is expanding, particularly among younger consumers, and engagement is strong across all cohorts. Consumer spending on the Delta American Express co-brand card is up double digits year to date, with a recent acceleration in travel and entertainment that mirrors the improvement that we're seeing in bookings. Premium revenue growth remains robust. The main cabin trends are improving. Structural changes taking hold across the industry as unprofitable flying is rationalized and carriers not earning their cost of capital adjust strategies to prioritize returns.

Speaker #3: The US economy remains on solid footing, and our customer base is financially strong. With rising preference for premium products and services, SkyMiles membership is expanding, particularly among younger consumers, and engagement is strong across all cohorts.

Speaker #3: Consumer spending on the Delta AMEX co-brand card is up double digits year-to-date, with a recent acceleration in travel and entertainment that mirrors the improvement we're seeing in bookings.

Speaker #3: Premium revenue growth remains robust, and the main cabin trends are improving. Structural change is taking hold across the industry as unprofitable flying is rationalized, and carriers not earning their cost of capital adjust strategies to prioritize returns.

Speaker #3: Against this backdrop, we expect to deliver a double-digit operating margin again in the December quarter, with earnings comparable to what we earned in the September quarter.

Ed Bastian: Against this backdrop, we expect to deliver a double-digit operating margin again in the December quarter, with earnings comparable to what we earned in the September quarter. This would be at or above our all-time fourth quarter earnings performance. This brings our outlook for full-year earnings to approximately $6 per share, which is in the upper half of our July guidance range. Free cash generation remains a key differentiator for Delta, and we are updating our full-year outlook to $3.5 to $4 billion, growing our cash generation over last year and consistent with our long-term framework as we build a fortress balance sheet. At the heart of our position of industry leadership is a relentless focus on elevating the customer experience. We're investing across every phase of the journey to make travel with Delta more seamless, personalized, and premium, growing our value proposition to customers.

Speaker #3: This would be at or above our all-time fourth-quarter earnings performance. The springs are outlooked for full-year earnings to approximately $6 per share, which is in the upper half of our July guidance range.

Speaker #3: Free cash generation remains a key differentiator for Delta, and we are updating our full-year outlook to $3.5 to $4 billion, growing our cash generation over last year and consistent with our long-term framework as we build a fortress balance sheet.

Speaker #3: At the heart of our position of industry leadership is a relentless focus on elevating the customer experience. We're investing across every phase of the journey to make travel with DELTA more seamless, personalized, and premium, growing our value proposition to customers.

Speaker #3: On the ground, we're harvesting the benefits of generational investments in our airport infrastructure, this includes upgraded airport facilities, modernized sky clubs, the launch of DELTA One lounges and JFK, LAX, Boston, and Seattle.

Ed Bastian: On the ground, we're harvesting the benefits of generational investments in our airport infrastructure. This includes upgraded airport facilities, modernized Sky Clubs, the launch of Delta One Lounges in JFK, LAX, Boston, and Seattle. By year-end, Delta One check-in will be available across all of our hubs. We've also partnered with Uber to begin streamlining the airport pickup and drop-off experiences, enhancing convenience from curb to gate. In the air, we're continuing to expand premium seating and enhance service offerings, ensuring more customers can experience our most elevated products. Digitally, we're delivering a connected experience for SkyMiles members. With nearly 1,000 aircraft equipped with fast, free Wi-Fi, well more than all of our U.S. competitors combined, our integrated platform is setting the standard for in-flight connectivity and personalization.

Speaker #3: By year-end, DELTA One check-in will be available across all of our hubs. We've also partnered with Uber, excuse me, to begin streamlining the airport pickup and drop-off experiences and enhancing convenience from curb to gate.

Speaker #3: In the air, we're continuing to expand premium seating and enhance service offerings, ensuring more customers can experience our most elevated products. Digitally, we're delivering a connected experience for SkyMiles members.

Speaker #3: With nearly 1,000 aircraft equipped with fast, free Wi-Fi—well more than all of our U.S. competitors combined—our integrated platform is setting the standard for in-flight connectivity and personalization.

Speaker #3: Exclusive partnerships with American Express, Uber, and most recently YouTube extend SkyMiles further, into our members' daily activities, deepening engagement and preference for the DELTA brand beyond the flight.

Ed Bastian: Exclusive partnerships with American Express, Uber, and most recently, YouTube extend SkyMiles further into our members' daily activities, deepening engagement and preference for the Delta brand beyond the flight. It's all powered by our people, delivering welcomed, elevated, and caring service that reinforces our industry leadership, sustains our durable revenue premium, and underpins our strong financial foundation. In closing, our financial focus remains on profitable growth, margin expansion, and disciplined capital allocation, all aligned with the three-to-five-year framework that we shared last November. As we enter the final stretch of our centennial year, I'm more optimistic than ever about Delta's future. Thank you for joining us today. With that, I'll hand it over to Glen to discuss our commercial trends and demand, followed by Dan with the financial details. Thank you, Ed, and good morning.

Speaker #3: And it's all powered by our people, delivering welcomed, elevated, and caring service. That reinforces our industry leadership, sustains our durable revenue premium, and underpins our strong financial foundation.

Speaker #3: In closing, our financial focus remains on profitable growth, margin expansion, and disciplined capital allocation, all aligned with the three-to-five-year framework that we shared last November.

Speaker #3: As we enter the final stretch of our centennial year, a more optimistic than ever about DELTA's future. Thank you for joining us today, and with that, I'll hand it over to Glen to discuss our commercial trends and demand followed by Dan with the financial details.

Speaker #3: Thank you, Ed, and good morning. I want to begin by thanking the DELTA team for their outstanding commitment throughout the busy summer season. And to our customers for their continued loyalty to DELTA.

Ed Bastian: I want to begin by thanking the Delta team for their outstanding commitment throughout the busy summer season and to our customers for their continued loyalty to Delta. For the September quarter, revenue increased 4.1% year over year to $15.2 billion, a third-quarter record and ahead of our guidance as momentum built through the quarter. Trends across our business are improving, and customer preference for the Delta brand is showing up in our results. Total unit revenue improved by 0.3% over last year. Importantly, domestic unit revenue turned positive with sequential improvement as the quarter progressed. This was supported by a main cabin inflection as industry supply moderated and demand improved, materializing earlier than our initial expectations. Internationally, profitability across all entities was strong, with premium continuing to bolster results. Corporate sales trended positively throughout the quarter, up 8% over prior year, with sequential improvement across all sectors.

Speaker #3: For the September quarter, revenue increased 4.1% year-over-year to $15.2 billion, a third-quarter record and ahead of our guidance as momentum built through the quarter.

Speaker #3: Trends across our business are improving, and customer preference for the DELTA brand is showing up in our results. Total unit revenue improved by 0.3% over last year, importantly domestic unit revenue turned positive, with sequential improvement as the quarter progressed.

Speaker #3: This was supported by a main cabin inflection, as industry supply moderated and demand improved materializing earlier than our initial expectations. Internationally, profitability across all entities was strong, with premium continuing to bolster results.

Speaker #3: Corporate sales trended positively throughout the quarter, up 8% over the prior year, with sequential improvement across all sectors. Domestic corporate sales grew double digits, including mid-teens growth in our coastal hubs.

Ed Bastian: Domestic corporate sales grew double digits, including mid-teens growth in our coastal hubs. We see opportunities for further growth as corporate confidence rebuilds, reinforced by 90% of our most recent corporate survey respondents anticipating that their 2026 travel volumes will increase or remain steady year over year. Diverse high-margin revenue streams grew double digits year over year and contributed 60% of total revenue. Within that, premium revenue grew 9% with improvement across all products driven by strong demand and consistent investment in premium offerings. Loyalty revenue improved 9%, and travel-adjacent products grew mid-teens as SkyMiles members engaged beyond the flight and throughout our loyalty ecosystem. Cargo revenues increased 19%, driven by the Pacific. Maintenance, repair, and overhaul revenue grew more than 60% on higher volumes and timing of shipments.

Speaker #3: We see opportunities for further growth as corporate confidence rebuilds, reinforced by 90% of our most recent corporate survey respondents anticipating that their 2026 travel volumes will increase or remain steady year over year.

Speaker #3: Diverse, high-margin revenue streams grew double digits year-over-year and contributed 60% of total revenue. Within that, premium revenue grew 9%, with improvement across all products driven by strong demand and consistent investment in premium offerings.

Speaker #3: Loyalty revenue improved 9%, and travel-adjacent products grew in the mid-teens as SkyMiles members engaged beyond the flight and throughout our loyalty ecosystem. Cargo revenues increased 19%, driven by the Pacific. Maintenance, repair, and overhaul revenue grew more than 60% due to higher volumes and the timing of shipments.

Speaker #3: DELTA's loyalty ecosystem continues to be a powerful driver of enterprise value. Anchored by the attractiveness of the SkyMiles program, a financially healthy, highly engaged member base, and our exclusive co-brand partnership with American Express, co-brand holders are among our most valuable customers, traveling more often and spending more on DELTA.

Ed Bastian: Delta's loyalty ecosystem continues to be a powerful driver of enterprise value, anchored by the attractiveness of the SkyMiles program, a financially healthy, highly engaged member base, and our exclusive co-brand partnership with American Express. Co-brand holders are among our most valuable customers, traveling more often and spending more on Delta. While roughly one-third of active SkyMiles members hold a co-brand card today, we have further runway as both engagement and member penetration continue to rise. A key proof point is the sustained momentum on spend growth, which has outpaced other consumer credit cards by 2x over the last few years. During the quarter, spend grew at double-digit pace, with new card acquisitions up year over year and a record mix of customers choosing the premium cards.

Speaker #3: While roughly one-third of active SkyMiles members hold a co-brand card today, we have further runway as both engagement and member penetration continue to rise.

Speaker #3: A key proof point is the sustained momentum on spend growth, which has outpaced other consumer credit cards by 2x over the last few years.

Speaker #3: During the quarter, spend grew at double-digit pace, with new card acquisitions up year-over-year and a record mix of customers choosing the premium cards. With that, remuneration from American Express increased 12% over prior year to $2 billion in the quarter.

Ed Bastian: With that, remuneration from American Express increased 12% over prior year to $2 billion in the quarter, keeping us on track to deliver over $8 billion this year and advancing towards our long-term goal of $10 billion within the next few years. Turning to the outlook, the environment continues to improve. Over the past six weeks, sales trends have accelerated across all geographies and in every advanced purchase window, positioning Delta to close the year from a position of strength. While we are monitoring potential impacts from the U.S. government shutdown, we have not seen a material effect to date. For the December quarter, we expect total revenue to grow 2% to 4% year over year, on top of last year's record performance, with solidly profitable unit revenues.

Speaker #3: Keeping us on track to deliver over $8 billion this year and advancing toward our long-term goal of $10 billion within the next few years.

Speaker #3: Turning to the outlook, the environment continues to improve. Over the past six weeks, sales trends have accelerated across all geographies and in every advanced purchase window.

Speaker #3: Positioning Delta to close the year from a position of strength. While we are monitoring potential impacts from the U.S. government shutdown, we have not seen a material effect to date.

Speaker #3: For the December quarter, we expect total revenue to grow 2% to 4% year-over-year on top of last year's record performance, with solidly profitable unit revenues.

Speaker #3: Passenger RASM is showing healthy improvements sequentially, reflecting continued strength in domestic and a step change improvement in the transatlantic on firmer main cabin trends and corporate demand.

Ed Bastian: Passenger RASM is showing healthy improvements sequentially, reflecting continued strength in domestic and a step-change improvement in the transatlantic on firmer main cabin trends and corporate demand. At the same time, financial divergence across the industry has never been greater. As carriers prioritize earnings, their cost of capital, and eliminate unprofitable flying, competitive capacity in our hubs is down year over year, and we expect a very healthy supply-demand balance across the industry into 2026. In closing, I'm very optimistic as we enter the final quarter, building our momentum and positioning Delta for continued top-line growth and margin expansion into 2026. With that, I'll turn it over to Dan to cover the financials.

Speaker #3: At the same time, financial divergence across the industry has never been greater. As carriers prioritize earnings, they are adjusting their cost of capital and eliminating unprofitable flying. Competitive capacity in our hubs is down year-over-year, and we expect a very healthy supply-demand balance across the industry into 2026.

Speaker #3: In closing, I'm very optimistic as we enter the final quarter, building our momentum and positioning Delta for continued top-line growth and margin expansion into 2026.

Speaker #3: And with that, I'll turn it over to Dan to cover the financials.

Speaker #4: Thank you, Glen. And good morning to everyone. Delta's competitive advantages drove another strong quarter. As we continue to set the pace for the industry, our teams are delivering operationally for our customers and driving efficiency.

Daniel Janki: Thank you, Glen, and good morning to everyone. Delta's competitive advantages drove another strong quarter. As we continue to set the pace for the industry, our teams are delivering operationally for our customers and driving efficiency. Year to date, we are outperforming the industry across on-time performance, completion factor, and net promoter score. Our premium offerings, industry-leading loyalty programs, and elevated experiences we provide across the entire travel journey are driving increased customer preference for flying Delta and underpin our differentiated financial results. In the September quarter, we delivered record third-quarter revenue of $15.2 billion, with an operating margin of 11.2% and earnings of $1.71 per share.

Speaker #4: Year-to-date, we are outperforming the industry across on-time performance, completion factor, and net promoter score. Our premium offerings, industry-leading loyalty programs, and elevated experiences we provide across the entire travel journey are driving increased customer preference for flying DELTA and underpins our differentiated financial results.

Speaker #4: In the September quarter, we delivered record third-quarter revenue of $15.2 billion. With an operating margin of 11.2% and earnings of $1.71 per share, non-fuel unit cost growth was approximately flat to the prior year, bringing the year-to-date non-fuel unit cost growth to less than 2%.

Daniel Janki: Non-fuel unit cost growth was approximately flat to prior year, bringing the year-to-date non-fuel unit cost growth to less than 2%, consistent with our low single-digit guidance at the start of the year, even as we've reduced capacity after the summer peak to align to demand. I want to thank the entire Delta team for their hard work to achieve these results. Delta generated third-quarter operating cash flow of $1.8 billion, and after reinvesting $1.1 billion into the business, we generated free cash flow of $830 million. On our capital structure, we continue to take an opportunistic approach. Last month, we successfully repriced our SkyMiles term loan, reducing the rate by 225 basis points, demonstrating the strength of our balance sheet and the attractiveness of Delta credit. Strong cash generation has enabled debt paydown of nearly $2 billion year to date, with gross leverage ending the quarter at 2.4 times.

Speaker #4: Consistent with our low single-digit guidance at the start of the year, even as we've reduced capacity after the summer peak to align to demand.

Speaker #4: I want to thank the entire DELTA team for their hard work to achieve these results. DELTA generated third-quarter operating cash flow of $1.8 billion, and after reinvesting $1.1 billion back into the business, we generated free cash flow of $830 million.

Speaker #4: On our capital structure, we continue to take an opportunistic approach. Last month, we successfully repriced our SkyMiles term loan, reducing the rate by 225 basis points.

Speaker #4: This demonstrates the strength of our balance sheet and the attractiveness of Delta's credit. Strong cash generation has enabled us to pay down nearly $2 billion year-to-date, with gross leverage ending the quarter at 2.4 times.

Speaker #4: Now, turning to the outlook. For the December quarter, as Glen shared, we expect revenue growth of 2% to 4% year-over-year, with positive unit revenue.

Daniel Janki: Now, turning to the outlook. For the December quarter, as Glen shared, we expect revenue growth of 2% to 4% year over year with positive unit revenue. On the cost side, disciplined execution supports non-fuel unit cost growth in low single digits, in line with our full-year guidance. With that, we expect fourth-quarter earnings of $1.60 to $1.90 per share and an operating margin of 10.5% to 12%. For the full year, this brings earnings per share of approximately $6, in the upper half of our guidance range we provided in July. On free cash flow, we are updating our guidance to $3.5 to $4 billion. This outlook is within our long-term target range, enables us to pay down debt while returning cash to shareholders.

Speaker #4: On the cost side, disciplined execution supports non-fuel unit cost growth and low single digits, in line with our full-year guidance. With that, we expect fourth-quarter earnings of $1.60, to $1.90 per share, and an operating margin of 10.5% to 12%.

Speaker #4: For the full year, this brings earnings per share of approximately $6. In the upper half of our guidance range, we provided in July. On free cash flow, we are updating our guidance to three and a half to four billion.

Speaker #4: This outlook is within our long-term target range, enables us to pay down debt, while returning cash to shareholders. Our capital allocation priorities remain unchanged.

Daniel Janki: Our capital allocation priorities remain unchanged, reinvesting where returns are strong, reducing debt, and maintaining our fortress investment-grade balance sheet, which was recently recognized by Fitch with a revised outlook from stable to positive during the quarter. Our investments are focused on the customer experience, as Ed and Glen spoke about, and on driving efficiency through technology and our fleet. We continue to advance our fleet renewal strategy with approximately 40 aircraft deliveries this year and next. These additions drive meaningful value for our customers through expanded premium seating and for our shareholders through increased efficiency and greater scale among our key fleets. Looking into 2026 and beyond, our focus is on profitable growth and delivering long-term financial targets outlined at our Investor Day last November, including earnings growth, durable free cash flow, debt repayment to drive sustained value for our shareholders.

Speaker #4: Reinvesting where returns are strong, reducing debt, and maintaining our fortress investment-grade balance sheet, which was recently recognized by Fitch with a revised outlook from stable to positive during the quarter.

Speaker #4: Our investments are focused on the customer experience. As Ed and Glen spoke about, and on driving efficiency through technology and our fleet. We continue to advance our fleet renewal strategy, with approximately 40 aircraft deliveries this year and next.

Speaker #4: These additions drive meaningful value for our customers through expanded premium seating, and for our shareholders through increased efficiency, and greater scale among our key fleets.

Speaker #4: Looking into 2026 and beyond, our focus is on profitable growth and delivering long-term financial targets outlined at our investor day last November. Including earnings growth, durable free cash flow, debt repayment, to drive sustained value for our shareholders.

Speaker #4: In closing, I want to extend my sincere thanks to the entire DELTA team, for their commitment to one another, and to our customers. And with that, I'll turn it back to Julie for Q&A.

Daniel Janki: In closing, I want to extend my sincere thanks to the entire Delta team for their commitment to one another and to our customers. With that, I'll turn it back to Julie for Q&A.

Speaker #2: Thank you, Dan. Matthew, can you please remind the analysts how to enter the call queue and go to our first question from Dwayne Finneyworth of Evercore AI.

Julie Stewart: Thank you, Dan. Matthew, can you please remind the analysts how to enter the call queue and go to our first question from Dwayne Finney-Worth of Evercore ISI?

Speaker #1: Certainly. Everyone at this time will be conducting a question and answer session. Once again, if you have any questions or comments, please press * then 1 on your phone at this time.

Operator: Certainly. Everyone, at this time we will be conducting a question and answer session. Once again, if you have any questions or comments, please press star, then one on your phone at this time. Your first question is coming from Dwayne Finney-Worth from Evercore ISI. Your line is live.

Speaker #1: Your first question is coming from Dwayne Finneyworth from Evercore AI. Your line is live.

Speaker #5: Hey, hey, thank you. good morning. With respect to the strong improvement in, cash flow year-over-year and operating cash flow, can you just expand on the drivers of that improvement?

[Analyst 1]: Thank you. Good morning. With respect to the strong improvement in cash flow year over year and operating cash flow, can you just expand on the drivers of that improvement? How much of that is just the working capital benefit of maybe the booking curve normalizing versus earlier in the year? Maybe there's some dynamics around MRO. Any thoughts you have would be helpful.

Speaker #5: How much of that is just the working capital benefit of maybe, the booking curve, normalizing versus earlier in the year, maybe there's some dynamics around MRO, any, any thoughts you have would be, helpful.

Speaker #4: Yeah, certainly, Dwayne, thank you for the question. Year-to-date, we're on track to where we were last year. On similar earnings, and that's even with actually a headwind as it relates to the booking curve, as we talked about over the summer, that spring and summer, that compressed.

Daniel Janki: Yeah, certainly, Dwayne. Thank you for the question. Year to date, we're on track to where we were last year on similar earnings. That's even with actually a headwind as it relates to the booking curve. As we talked about over the summer, that spring and summer that compressed, it's starting to expand. We haven't yet gotten all that back. We expect more of that to materialize here in the fourth quarter. The underlying improvement to offset that is coming out of working capital. We built up a lot of just, I won't call it inefficiencies, but excesses. We're rebuilding the airline. Now's our time as we drive efficiency to work that off. You're seeing that in working capital.

Speaker #4: It's starting to expand, we haven't yet gotten all that back. We expect more of that to materialize here in the fourth quarter. And, the underlying improvement to offset that is coming out of working capital.

Speaker #4: we've built up, you know, a lot of just, I won't call it inefficiencies, but excesses we are rebuilding the airline, and now's our time as we drive efficiency to work that off, and you're seeing that in working capital.

Speaker #5: Thanks. And then maybe Glen, for my follow-up, one of the questions we got from a generalist this morning was, can you put the corporate recovery in context excluding any, you know, benefit from a crowd strike comp?

[Analyst 1]: Thanks. Maybe Glen, for my follow-up, one of the questions we got from a generalist this morning was, can you put the corporate recovery in context, excluding any, you know, benefit from a CrowdStrike comp? In other words, you know, are we fully back? How would you put this corporate recovery in context? Thank you.

Speaker #5: In other words, you know, are we, are we fully back? You know, how, how would you put this corporate recovery in context? Thank you.

Speaker #4: Yeah, I, I think we're, we're well beyond where the crowd strike impact was from last year, and we're seeing similar results to what we disclosed in the third quarter earnings moving into the fourth queue.

Glen Hauenstein: Yeah, I think we're well beyond where the CrowdStrike impact was from last year, and we're seeing similar results to what we disclosed in the third quarter earnings moving into the fourth quarter. I'd just remind you and other people on the call that while corporate revenues have recovered to 2019 levels and are actually slightly above those now, the number of passengers that are booking because fares are higher are still in the high 70%. We think as business continues to normalize, we have a lot of runway to continue to expand the corporate demand.

Speaker #4: And I just remind you, and, and other people on the call, that while corporate revenues have recovered to 2019 levels and are actually slightly above those now, that the number of passengers that are booking, because fares are higher, are still in the high 70s.

Speaker #4: So we think as business continues to normalize, we have a lot of runway to continue to expand the corporate demand.

Speaker #5: Thank you.

[Analyst 1]: Thank you.

Speaker #1: Thank you. Your next question is coming from Tom Fitzgerald from TD Cowan. Your line is live.

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

Speaker #6: Hi, everyone. Thanks very much for your time. I was wondering if you could unpack the improvements you're seeing in the domestic market and how much that might be unique to you, just given your exposure to higher-income households.

[Analyst 2]: Hi everyone. Thanks very much for the time. I was wondering if you could unpack the improvements you're seeing in the domestic market and how much that might be unique to you, just given your exposure to higher-income households.

Speaker #4: Well, certainly, I, I think our exposure to higher household income cohort has enhanced our relative position versus carriers that are catering to a more stressed lower to middle-income environment.

Glen Hauenstein: I think our exposure to a higher household income cohort has enhanced our relative position versus carriers that are catering to a more stressed, lower to middle-income environment. We'll see as everybody else reports. I can only speak for Delta and the strength that we've seen and continuing to accelerate as we head into the fourth quarter.

Speaker #4: So, we'll see as everybody else reports. I can only speak for Delta in the strength that we've seen, and continuing to accelerate as we head into the fourth quarter.

Speaker #6: Okay, that's very helpful. And this is kind of on the same topic. I was wondering if you could unpack some of the mixture of benefits that you might see as we move into 2026 and 2027, as you take on delivery of new aircraft.

[Analyst 2]: Okay, that's really helpful. Just kind of on the same topic, I was wondering if you could unpack some of the makeshift benefit that you might see as we move into 2026 and 2027 as you take on delivery of new aircraft. Thanks again for the time.

Speaker #6: Thanks again for the time.

Speaker #4: Well, we continue to invest in the, in the higher-end products, whether or not that's opening up new DELTA One lounges or, or check-in areas, and so as we continue to take delivery, they come with a higher mix of, of premium products.

Glen Hauenstein: We continue to invest in the higher-end products, whether or not that's opening up new Delta One Lounges or check-in areas. As we continue to take delivery, they come with a higher mix of premium products. If you look next year, we haven't given any guidance, but most of our growth, if not almost all of it, will be in the premium sectors.

Speaker #4: And if you look next year, well, we haven't given any guidance, but most of our growth, if not almost all of it, will be in the premium sectors.

Speaker #4: Yes.

[Analyst 2]: Yes.

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

Operator: Thank you. Your next question is coming from Katie O'Brien from Goldman Sachs. Your line is live.

Speaker #7: Hey, good morning, team. Thanks for the time. maybe, one for Dan. You know, not asking for 2026 guidance, but, but this year your unit cost performance benefited from efficiency gains from growing into your workforce and your fleet and your airport assets.

[Analyst 3]: Hey, good morning, team. Thanks for the time. Maybe one for Dan, you know, not asking for 2026 guidance, but this year, your unit cost performance benefited from efficiency gains from growing into your workforce and your fleet and your airport assets. I guess, what inning are we in in that efficiency growth, and are there further tailwinds from this into next year?

Speaker #7: I guess, what inning are we in, in that efficiency growth? And are there further tailwinds from this into next year?

Speaker #4: Yeah, we, we talked a, a bunch about this at the investor day last November, and those, all those trends are intact. we certainly are still in the early to middle innings where we believe over the long term we can continue to drive efficiency by growing into that workforce, continuing to get, growth in the generational airports that we've built that are actually in our run rate.

Daniel Janki: Yeah, we talked a bunch about this at the Investor Day last November, and all those trends are intact. We certainly are still in the early to middle innings where we believe over the term we can continue to drive efficiency by growing into that workforce, continuing to get growth in the generational airports that we've built that are actually in our run rate, the investment that we've made in fleet as we get scale and efficiency as we continue on the fleet renewal. The other element that we talked about is just the role of technology and that it will have in regards to enabling our workforce and giving them tools and transparency to just be more efficient. We think that is certainly in the very, very early innings of the unlock, and we have years of that in front of us.

Speaker #4: the, the investment that we've made in, in fleet as we get scale and efficiency, as we continue on the, the fleet renewal. And then the other element that we talked about is just the, the role of technology.

Speaker #4: And that it will have, in regards to enabling our workforce and giving them tools, and transparency to just be more efficient. And we think that is certainly in the very, very early innings of the unlock, and we have years of that in front of us.

Speaker #7: Yeah, that's great. And then my second one is actually a bit of a follow-up to, to Tom's. I, I wanted to dig in a bit on domestic main cabin turning positive specifically.

[Analyst 3]: Yeah, that's great. My second one is actually a bit of a follow-up to Tom's. I wanted to dig in a bit on domestic main cabin turning positive specifically. Can you give a little more color there? I know one driver of that is that domestic main cabin seats for Delta are down year over year. Can you tell us by how much? Maybe the converse of that, I know back in August when I was in Atlanta, we spoke about how you're adding, you're doing some retrofits to add incremental Delta Comfort seats this year. What does this year's retrofits do for premium seat mix into next year? I know you said most of next year's growth is driven by premium seats, but just wondering specifically how the retrofits contribute to that as well. Thanks so much.

Speaker #7: Can you give a little more color there? I, I know one driver of that is that domestic main cabin seats for DELTA are down year-over-year, can you tell us by how much?

Speaker #7: And then maybe the converse of that. I know back in August when I was in Atlanta, we spoke about how you're adding—you're doing some retrofits to add incremental DELTA Comfort+ seats this year.

Speaker #7: What does this year's retrofits do for the premium seat mix into next year? I know you said most of next year's growth is driven by premium seats, but just wondering specifically how the retrofits contribute to that as well.

Speaker #7: Thanks so much.

Speaker #4: Right. Certainly, as we continue the premiumization, if you will, of the Delta ecosystem, it is really dependent on two things. One is the retrofits, which you mentioned, and which accounts for probably about 25% to 30% of the incremental premium seats.

Glen Hauenstein: Certainly, as we continue to the premiumization, if you will, of the Delta ecosystem, it is really dependent on two things. One is the retrofits, which you mentioned, which accounts for probably about 25% to 30% of the incremental premium seats, and then new aircraft deliveries that are continuing to come with a higher mix of premium as they roll out of the factory. Both those contribute to the continuation of improving the experience for our customers. Lastly, on main cabin demand, we have seen an inflection. Our main cabin seats are down slightly. They're not down significantly from last year, so relatively flat. What we have seen is the rationalization of capacity in many of our hubs.

Speaker #4: And then new aircraft deliveries that are continuing to come, with a higher mix of premium as they roll out at the factory. So both those contributing to the continuation of improving the experience for our customers.

Speaker #4: and then lastly, on, on main cabin demand, we have seen an inflection. our

Speaker #1: Yeah.

Speaker #4: Main cabin seats are down slightly. They're not down significantly from last year, so relatively flat. But what we have seen is the rationalization of capacity in many of our hubs. As a matter of fact, if you look forward through November, capacity in almost all of our hubs is down year-over-year from competitive sets.

Glen Hauenstein: As a matter of fact, if you look forward through November, the capacity in almost all of our hubs is down year over year from competitive sets, which is allowing us to rationalize the seats that are there and continue to drive unit revenues up.

Speaker #4: Which is allowing us to rationalize the seats that are there and continue to drive unit revenues up.

Speaker #7: Really helpful, thank you.

[Analyst 3]: Really helpful. Thank you.

Speaker #1: Thank you. Your next question is coming from Jamie Baker from JP Morgan. Your line is live.

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

Speaker #8: Good morning. So, for Glen, premium revenue growth exceeded that of main cabin by 13 points. That's obviously a new record, and I guess my question is a bit of a follow-up to, you know, Katie's.

[Analyst 4]: Thanks. For Glen, premium revenue growth exceeded that of main cabin by 13 points. That's obviously a new record. My question is a bit of a follow-up to Katie. Obviously, part of the outcome is driven by weakness in the oil and consumer, but can you drill down a bit deeper into actual changes in consumer behavior? For example, if you looked at SkyMiles member behavior, how much premium growth is driven by your more affluent members taking more trips versus maybe less affluent flyers trading up to a better experience? There seem to be so many moving pieces to explain the 9% rise in premium, the 4% contraction in main. We obviously know the outcome is great, but any further comment on the specific building blocks would be helpful.

Speaker #8: I mean, obviously part of the outcome is driven by weakness in the low-end consumer, but can you drill down a bit deeper into actual changes in consumer behavior, you know, so if you, for example, if you looked at SkyMiles member behavior, how much premium growth is driven by your more affluent members, taking more trips, versus maybe less affluent flyers trading up to a better experience?

Speaker #8: You know, there seems to be so many moving pieces to explain the 9% rise in premium. The 4% contraction in main, we obviously know the outcome is great.

Speaker #8: But any further comment on the specific building blocks would be helpful.

Speaker #4: Well, Jamie, I think we’ve been outlining this for many years. We believe that premium still has a long runway.

Glen Hauenstein: Jamie, I think, you know, we've been outlining this for many years that we think that premium still has a long runway. As you know, following this industry for a long time, we were not selling premium seats 10 or 15 years ago. We were giving them away. The re-engineering of the whole purchase process where we made them much more affordable and much more attainable has allowed people to buy up into those categories. We've always said that we aren't really at the end state in terms of getting the distribution systems where we need them to be to make sure that those products are being displayed to end consumers or agencies the way that they need to be. That's been a long journey too. Yes, it's been a transformation.

Speaker #1: Mm-hmm.

Speaker #4: And, you know, as you know, following this industry for a long time, we were not selling premium seats 10 or 15 years ago.

Speaker #4: We were giving them away. And, you know, the re-engineering of the whole purchase process where we made them much more affordable and much more attainable has allowed people to buy up into those categories.

Speaker #4: And, you know, we always said that we aren't really at the end state in terms of getting the distribution systems where we need them to be, to make sure that, that those products are being displayed to end consumers or agencies the way that they need to be.

Speaker #4: And that's been a long journey too. So yes, it's been a transformation, and yes, all of the above are true, that people are attaching to these products, and then the repeat rate on them is incredibly high.

Glen Hauenstein: Yes, all of the above are true that people are attaching to these products, and then the repeat rate on them is incredibly high. I think in previous calls, I've equated it to the car that you drive today. Is it better than the first car you had? The answer is probably yes. You don't see many people going back to cars that are worse. I think once people get used to traveling in a certain product, whether it's Comfort Plus, Delta Premium Select, or Delta One, they tend not to go back. Their retention rates are in the mid-80%. The intent to repurchase is very high. They're continuing to expand the availability of the products, the price points on the products. This is a journey, a long journey we're on. I think it's a great question.

Speaker #4: And I, I think in previous calls, I've equated it to the car that you drive today is it better than the first car you had?

Speaker #4: The answer is probably yes. You don’t see many people going back to cars that are worse. I think once people get used to traveling in a certain product, whether it’s Comfort Plus, Delta Premium Select, or Delta One, they tend not to go back.

Speaker #4: Their retention rates in the mid-80s. And so the re intent to repurchase very high, the continuing to expand, the, the availability of the products, the price points on the products, and this is a journey a long journey we're on.

Speaker #4: So I think it's a great question, and I think, we see that there are many, many more opportunities in premium as the, in the coming years.

Glen Hauenstein: I think we see that there are many, many more opportunities in premium in the coming years. I appreciate it. Jane, if I could add to that.

Speaker #1: That's great.

Speaker #4: I appreciate my good, Jamie, if I could add to that. A couple of

Speaker #1: Yeah.

Speaker #4: things. There, there's also, you need to look at the geographies, right? You look at the investment we've made in LA and Boston and New York and, you know, the coastal best in Seattle, that's where, considerable amount of premium lives.

Operator: Yeah.

Glen Hauenstein: A couple of things. You need to look at the geographies, right? Look at the investment we've made in L.A. and Boston and New York and the coastal investment in Seattle. That's where a considerable amount of premium lives. Delta historically wasn't as big in those markets as we are now. Not only have we moved in there, we've built generational experiences through the airports, the Delta One Lounges. Corporate travel is our bread and butter. We are the very best at it, very best serving it. Corporate travel is premium, right? All of these things show, as you said in your question, there's a lot to that. We see a considerable amount of continued momentum forward in premium. The question we get from customers all the time is, when can we get more?

Speaker #4: And DELTA historically wasn't as big in those markets as we are now. And not only have we moved in there, we've built generational, experiences, you know, through the airports, the DELTA One lounges, corporate travel is our bread and butter.

Speaker #4: We are the very best at it, very, very best serving it. Corporate travel is premium, right? And so, you know, all of these things go in, as you said in your question, there's a lot to that.

Speaker #4: But we see, we see a considerable amount of continued momentum forward in premium and, you know, the question we get from customers all the time is, when can we get more?

Speaker #5: Well, thanks for that, gentlemen. In, in that actually leads to my follow-up. what does the Venn diagram look like between premium and corporate? So if JP Morgan buys me a main cabin ticket to Miami, that's clearly going to show up as corporate for you.

[Analyst 4]: Thank you for that, gentlemen. That actually leads to my follow-up. What does the Venn diagram look like between premium and corporate? If J.P. Morgan buys me a main cabin ticket to Miami, that's clearly going to show up as corporate for you. It's going to be on our discount. If J.P. Morgan buys me Delta One to Los Angeles, I guess that counts as both corporate and premium?

Speaker #5: You know, it's going to be on our, you know, on our discount. But if JP Morgan buys me DELTA One to Los Angeles, I guess that counts as both corporate and premium.

Speaker #4: Yes. Corporate.

Glen Hauenstein: Yes.

Speaker #5: So what could you quantify sort of what that overlap?

[Analyst 4]: Could you quantify sort of what that overlaps?

Speaker #4: Well, 1% of premium is corporate?

Glen Hauenstein: What percentage of premium is corporate?

Speaker #5: Yeah.

Speaker #4: Is probably 30 to 40%. I, we can get the exact numbers.

[Analyst 4]: Yes.

Glen Hauenstein: It's probably 30% to 40%. We can get the exact number.

Speaker #5: Okay. Okay, good.

[Analyst 4]: Okay, good.

Speaker #4: More and more, more and more and I think this is the, the exciting part for us. If you think about one of the issues we had many years back, the difference between yields on corporate and high-yield leisure were very, very different.

Glen Hauenstein: More and more, more and more. I think this is the exciting part for us. If you think about one of the issues we had many years back, the difference between yields on corporate and high-yield leisure were very, very different. It was a steep cliff if you were not filling your planes with corporate on what you had to fill them with. Now those have diverged. In some cases, personal leisure is higher than corporate these days. It has given us a really nice ability to manage. One of the issues we've had with our team that we've been working on is sometimes we run out of seats for corporate, and we have to go and put more seats in market because corporate was getting squeezed out by higher yielding leisure.

Speaker #4: And so it was a steep cliff if you weren't filling your planes with corporate on what you had to fill them with. And now, those adverts in, in some cases, corporate, personal leisure is higher than corporate these days.

Speaker #4: So it's given us a really nice, ability to manage. And one of the issues we've had with our team that we've been working on is sometimes we run out of seats for corporate and we have to go and put more seats in market because corporate was getting squeezed out by higher yielding leisure.

Speaker #5: Excellent. And, and if I could just squeeze in a third follow-up, just because you brought that point up. You had said 2027 was the year in which premium would overtake main cabin.

[Analyst 4]: Excellent. Is there any third follow-up? Just because you brought that point up, you had said 2027 was the year in which premium would overtake main cabin. Any reason we wouldn't see that occur in a quarter or two next year?

Speaker #5: Any reason we wouldn't see that occur in a quarter or two next year?

Speaker #4: Oh, I think you will.

Speaker #5: Okay, thank you very much, everybody.

Glen Hauenstein: Oh, I think you will.

[Analyst 4]: Okay, thank you very much, everybody.

Speaker #4: Thank you, Jamie.

Glen Hauenstein: Thank you, Jamie.

Speaker #1: Thank you. Your next question is coming from Connor Cunningham from Melius Research. Your line is live.

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

Speaker #8: Hi, everyone. Thank you. Glen, you had a chance to talk about your first car. I think it was the Rambler. I believe you referenced that a couple of months ago.

[Analyst 4]: Hi, everyone. Thank you. Glen, you had a chance to talk about your first car. I think it was the Rambler. I think you referenced that to a couple of investors.

Speaker #4: Remember the Rambler Classic. I, I was high.

Glen Hauenstein: I remember. The Rambler's classic.

Speaker #8: Maybe we can.

Speaker #4: High school.

[Analyst 4]: Maybe we can.

Speaker #8: Maybe we can stick with the, the premium discussion, because there still seems to be a fair underappreciation for what's going on here. I, I think out there.

Glen Hauenstein: It was my high school.

[Analyst 4]: Maybe we can stick with the premium discussion because there still seems to be a fair underappreciation for what's going on here, I think, out there. Obviously, the revenue growth on premium versus main cabin has been very, very strong for quite some time. I was hoping you could talk about the profitability of the segments of the cabin. Should we look at the gap in just the terms of the growth overall as a good benchmark for the differences in overall contribution? There seems to be another step function change coming on seat mix. It seems like there's a further step function change coming on profitability as well. If you could just talk about the segments on a profitability standpoint, that would be helpful.

Speaker #8: So, like, obviously the revenue growth on premium versus main cabin has been very, very strong for quite some time. But I was hoping you could talk about the profitability of the segments of the cabin.

Speaker #8: I think that the, I, I mean, should we look at the gap in just the terms of the growth overall as a good benchmark for the differences in overall contribution?

Speaker #8: I just, it just, there seems to be another step function change coming on seat mix. So it just seems like there's a, a, a, a further step function change coming on, on profitability as well.

Speaker #8: So, if you could just talk about the segments from a profitability standpoint, that would be helpful.

Speaker #4: I, I just think that, you know, when you think about what's different, and what's changed over the last 10 or 15 years, the premium products used to be loss bleeders, and now they're the highest margin products.

Glen Hauenstein: I just think that, you know, when you think about what's different and what's changed over the last 10 or 15 years, the premium products used to be loss leaders, and now they're the highest margin products. That's really the headline. Yeah. Really, in descending order of their premium, this is their margin. The best margins are in the most premium products, and you just work your way down. We've had some convergence on Delta Premium Select, which has actually been so popular as we've introduced it that the margins are starting to converge with Delta One, and we're working on separating those back out again. You know, really exciting opportunities. These are relatively new products for the airlines. We've only had them, and we've only been selling them, and we've only been selling them in widely available distribution for less than 10 years.

Speaker #4: That's really the headline. And really in

Speaker #1: Yeah.

Speaker #4: descending order of their premiumness is their margin. So the best margins are in the most premium products, and you just work your way down.

Speaker #4: Now, we've had some convergence on Delta Premiums flight, which has actually been so popular since we've introduced it that the margins are starting to converge with D1. We're working on separating those back out again.

Speaker #4: But, you know, really exciting opportunities. These are relatively new products for the airlines. We've only had them, and we've only been selling them, and we've only been selling them in widely available distribution.

Speaker #4: For less than 10 years.

Speaker #5: Interesting. Great. maybe on corporate, just a follow-up to, to Dwayne's question, in general. I got, I got a similar question as well. Like, it's, so I know that there's some crowd strike noise within it, but the 8% number is obviously a lot.

[Analyst 4]: Interesting. Great. Maybe on corporate, just to follow up to Dwayne's question in general, I got a similar question as well. I know that there's some CrowdStrike noise within it, but the 8% number is obviously a lot. If you look at some of the other travel industries out there, they're not calling out a gain like that. To me, it kind of seems like you're driving additional share gains, or maybe you could just talk about how the overall market is expanding in general and how you're continuing to drive share within it. Thank you.

Speaker #5: And if you look at, you know, some of the other travel industries out there, they're not calling out a, a game like that. So to me, it kind of, it seems like you're driving additional share gains or, maybe you could just talk about how the overall market is expanding in general, and, and, and, and how you're continuing to drive share, within it.

Speaker #5: Thank you.

Speaker #4: Well, first of all, I'd like to call out our sales team there. The best sales team in the industry, doing amazing job for us.

Glen Hauenstein: First of all, I'd like to call out our sales team. They're the best sales team in the industry, doing an amazing job for us. Clearly, we are continuing to take share on the margin. We monitor our share, and then we reconcile it later. I think we're seeing mild gains in total share and certainly higher gains in revenue share. There's a lot of opportunity as we look forward here, as corporations are still not traveling in the volumes they did pre-pandemic. As that travel continues to come back, I think we could look at third-quarter sales and take the CrowdStrike out of it, we're still in the double digits.

Speaker #4: And clearly, we are continuing to take share on the margin. So, you know, we monitor our share, and then we reconcile it later.

Speaker #4: But I think, you know, we're seeing, mild gains in total share and, and certainly higher gains in revenue share. But, yeah, there's a lot of opportunity to, as we look forward here, is that, you know, corporations are still not traveling in the volumes they did pre-pandemic.

Speaker #4: And so as that travel continues to come back, and I, I think we could look at third quarter sales and. Take the crowd strike out of it.

Speaker #1: Yeah.

Speaker #4: We're

Speaker #4: still in the double digits.

Speaker #5: I think what I'd add on corporate, because I've heard it a couple of times, is that somehow it might be driven by CrowdStrike.

Daniel Janki: I think what I'd add on corporate, because I've heard it a couple of times, that somehow it might be driven by CrowdStrike. Actually, that 8% September was higher than 8. It was 9%. And that didn't have CrowdStrike in it. I think there's real momentum here with corporate. It's across all the segments. This hasn't anything to do with the technology outage.

Speaker #5: Actually, that 8% in September was higher than 8. It was 9%. And that didn't...

Speaker #4: Right.

Speaker #5: I have CrowdStrike in it. So I think there's real momentum here with corporate. It's across all the segments. This hasn't anything to do with the technology outage.

Speaker #4: Yeah, and one other thing, Connor, I'd add is corporate's suspended travel in the early part of the year. So there is also what was some level of, of pent-up demand.

Glen Hauenstein: Yeah. One other thing, Connor, I'd add is corporate suspended travel in the early part of the year. There is also what was some level of pent-up demand to get back out. I don't think you can underestimate that. I don't see that stopping, by the way, because you know our outlook when we asked corporates, they're going to continue to grow. There was clearly for four or five months this spring, we were not seeing any corporate growth. They all got back on the road together at the same time.

Speaker #4: To get back out. And I, I don't think you can underestimate that. I don't see that stopping, by the way, because, you know, our outlook when we asked corporates, they're going to continue to grow.

Speaker #4: but there was, there was, you know, clearly for four or five months, this spring, we were not seeing any corporate growth. And then they all, they all got back on the road together at the same time.

Speaker #4: So yeah.

Speaker #5: Awesome. Thank you.

Speaker #4: Sales up into this week are staying at or above the numbers we disclosed for third quarter, yes. Thank

[Analyst 4]: Awesome. Thank you.

Glen Hauenstein: Yields up into this week are staying at or above the numbers we disclosed before.

Speaker #5: Awesome. Thank you.

Speaker #4: you.

[Analyst 4]: Awesome. Thank you.

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

Operator: Thank you. Your next question is coming from Andrew Tedore from Bank of America. Your line is live.

Speaker #5: Okay, good morning, everyone. Maybe Glen, maybe switching gears a little bit and, speaking about Atlantic here. Obviously RASM down 7% in three queue. I know you spoke about a step function change happening here, but kind of doubt you're expecting to get back to flat in four queue.

[Analyst 1]: Hey, good morning, everyone. Maybe Glen, I'm switching gears a little bit and speaking about Atlantic here. Obviously, RASM down 7% in Q3. I know you spoke about a step function change happening here, but I kind of doubt you're expecting to get back to flat in Q4. Maybe could you speak to how Atlantic performs throughout Q3 and what you need to see in order for that entity to climb back to flat unit revenue?

Speaker #5: But maybe could you speak to, you know, how Atlantic performed throughout three queue and kind of what you need to see in order for that entity to, to climb back to flat unit revenue?

Speaker #4: Well, you know, I, I think, third quarter was clearly disappointing, and I think it was a, a host of things. Some of it might have been our, our fault in terms of where we thought the booking curves would be and how we held out for higher fares and so next year we're going to be in much more aggressive in building a solid book earlier in the year.

Glen Hauenstein: I think the third quarter was clearly disappointing, and I think it was a host of things. Some of it might have been our fault in terms of where we thought the booking curve would be and how we held out for higher fares. Next year, we're going to be much more aggressive in building a solid book earlier in the year. I think the other thing was the booking, as Ed refers to it, as the spring swoon. When the spring swoon was happening, everybody got a little nervous when tariffs were introduced. That was the booking window for the latter part of the summer. That had some impact on main cabin as well.

Speaker #4: I think the other thing was, the booking as, as Ed refers to it as the spring swoon. When the spring swoon was happening and everybody got a little nervous when tariffs were introduced, that was the booking window for the latter part of the summer.

Speaker #4: so that, that had some impact on main cabin as well. And then finally, I think we've discussed earlier is that, given that the cohort on the premium products is really it's, it's in their 60s, that the fall has become a relatively more attractive period than the summer in terms of high-yield leisure.

Glen Hauenstein: Finally, I think we've discussed earlier that given the cohort on the premium products is really in their 60s, the fall has become a relatively more attractive period than the summer in terms of high-yield leisure. It's a combination of all three. We're going to attack it multifaceted next year. I think we're going to hopefully not have any kind of swoon in the whole demand set. We're going to be a little bit more aggressive in terms of main cabin and filling up those cabins earlier in the booking curve. We're going to adjust our capacity to make sure that we're not creating the church feast for Sunday in July and August. We're going to flatten that out more for the summer out of season to have a better distribution of capacity.

Speaker #4: So it's a combination of all three. So we're going to attack it multifaceted next year. I think, you know, we're going to hopefully not have any kind of swoon in the whole demand set.

Speaker #4: We're going to be a little bit more aggressive in terms of main cabin and, and, filling up those cabins earlier in the booking curve.

Speaker #4: And then we're going to adjust our, capacity to make sure that we're not, creating the church priest or Sunday in July and August. We're going to flatten that out more for the summer out of season to have a, a better distribution of capacity.

Speaker #5: That's interesting. Thank you. and then going since you spoke about kind of margins within the cabin, curious if you'd be willing to rank your geographies by margin performance thus far in 2025 and, you know, maybe how you expect that to change if at all heading into four queue in 2026.

[Analyst 1]: That's interesting. Thank you. Glenn, since you spoke about kind of margins within the cabin, curious if you'd be willing to rank your geographies by margin performance thus far in 2025 and, you know, maybe how you expect that to change, if at all, heading into Q4 in 2026. Thank you.

Speaker #5: Thank you.

Speaker #4: It's, it's historically we had, a domestic premium and an international. And, and I'm not going to go beyond the international as a whole, but, this year they're relatively similar.

Glen Hauenstein: Historically, we had a domestic premium and an international, and I'm not going to go beyond the international as a whole, but this year, they're relatively similar. They've converged on each other. We're going to have a race. We've got our domestic for 2026, our domestic improvement versus our international improvement, and we're going to compete them against each other and see which one can generate the higher returns next year.

Speaker #4: They've converged on each other. And, you know, we're going to have a race. We've got our domestic for '26, our domestic improvement versus our international improvement, and we'll, we're going to compete them against each other and see which one can generate the higher returns next year.

Speaker #5: Great. Thank you.

[Analyst 1]: Great. Thank you.

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

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

Speaker #9: Oh, yeah. Hey, good morning, everyone. Hey, Glen, back. We're in shutdown. If you sort of think back to 2018, 2019, when did it start to bite?

[Analyst 2]: Oh, yeah. Hey, good morning, everyone. Hey, Glen. Back when shutdown, if you sort of think back to 2018, 2019, when did it start to bite? I mean, we're day nine in, and what can you recall what that financial impact was to Delta Air Lines?

Speaker #9: I mean, were day nine in and what can you recall what that financial impact was to DELTA?

Speaker #4: Well, we said at the time it was a little bit less than a, it was about a million dollars a day. And now it's less than a million dollars a day for various reasons.

Glen Hauenstein: We said at the time it was a little bit less than, it was about $1 million a day. Now it's less than $1 million a day for various reasons. One is that DCA travel was off even before. DCA has not been a real driver in terms of revenue improvement this year. Less than $1 million a day now, and it was about $1 million a day previously.

Speaker #4: One is that, DCA travel was off even before that. So, so, you know, DCA has not been a real driver in terms of revenue improvement this year.

Speaker #4: so less than a million dollars a day and now, and it was about a million dollars a day previously.

Speaker #9: Right. And then just a second quick one here. I thought it was interesting you called out Boston in your release. clearly non-hub flying. Historically, non-hub flying tended to be lower margin, RASM dilutive.

[Analyst 2]: Great. Just a second quick one here. I thought it was interesting you called out Boston in your release. Clearly, non-hub flying. Historically, non-hub flying tended to be lower margin, razz and dilutive. What's changed? What makes the Delta product, or maybe I'm answering the question. I'll leave it to you. Why is it different this time? Thank you.

Speaker #9: What, what's changed? what, what makes the DELTA product oh, maybe I'm answering the question. I'll, I'll leave it to you. Why is it different this time?

Speaker #9: Thank you.

Speaker #4: I, I think, you know, we used to look at the airline at a route level. But that wasn't really thinking about what's inside the minds of customers.

Glen Hauenstein: I think we used to look at the airline at a route level, but that wasn't really thinking about what's inside the minds of customers and what makes customers choose Delta over a different carrier. I think the answer is relevance, right? If we're not relevant, we cannot acquire the SkyMiles. We cannot acquire the premium flyer, the credit cards. The ecosystem, you have to have relevance. That's why it's important for us to have focused cities. Those focused cities have been quite profitable for us, sometimes exceeding that of the hubs. We're continuing to invest in focused cities. We don't have a lot of them, but the ones we do have, we've chosen for specific reasons. Let's say Austin, we've chosen because we don't have a Texas hub. Everybody else has a Texas hub except Delta. As you know, Texas in and of itself is a huge revenue market.

Speaker #4: And, you know, what makes customers choose DELTA over a different carrier? And I think the answer is relevance, right? If we don't, if we're not relevant, we cannot acquire the SkyMiles, we cannot acquire the premium flyer, the credit cards, and so the ecosystem you have to have relevance.

Speaker #4: And, that's why it's important for us to have focus cities.

Speaker #1: Yeah.

Speaker #4: And those focus cities have been quite profitable for us. You know, sometimes exceeding that of the hubs and so we're continuing to invest in, in, in focus cities.

Speaker #4: you know, we don't have a lot of them, but the ones we do have, we've chosen for specific reasons and, and say Austin, we've chosen because we don't have a Texas hub.

Speaker #4: Everybody else who, everybody else has a Texas hub except DELTA, and as you know, Texas is a in and of itself is a huge, revenue market.

Speaker #4: So you know, it's seeing those opportunities, looking at the demographics, looking at the GDP of generation for these cities and saying, "Where do we need to have a relevant offer so that people will join our SkyMiles program?

Glen Hauenstein: Seeing those opportunities, looking at the demographics, looking at the GDP of generation for these cities and saying, where do we need to have a relevant offer so that people will join our SkyMiles program, they will join our and get our credit cards, and we can produce a relevance.

Speaker #4: They will join our and get our credit cards." And we can produce a relevance.

Speaker #9: Very good. Thank you.

[Analyst 2]: Very good. Thank you.

Speaker #1: Thank you. Your next question is coming from Sheila Kayaglu from Jeffries. Your line is live.

Operator: Thank you. Your next question is coming from Sheila Kahyaoglu from Jefferies. Your line is live.

Speaker #7: good morning, guys. And thank you for the time. I want to maybe follow up on the Atlantic comments. So two questions there. You know, how do we think about Atlantic capacity next year, Glen?

[Analyst 3]: Good morning, guys, and thank you for the time. I want to maybe follow up on the Atlantic comments. Two questions there. How do we think about Atlantic capacity next year? Glen, you mentioned more evenly dispersed. I guess, how are you thinking about that? Secondly, given your competitor just announced some new additions, how are you thinking about competitive capacity, your own network planning, as well as the A330-350 product?

Speaker #7: You mentioned more evenly dispersed. I guess how are you thinking about that? And maybe secondly, given your competitor just announced some new additions, how are you thinking about competitive capacity or own network planning as well as the A330/350 product?

Speaker #4: Well, I, I think our product is, is best in class in the transatlantic. We've, we continue to monitor our relative performance in terms of net promoter scores, and I think, it's got, it's leading right now and it's going to get much better as we continue to deliver new airplanes with, the DELTA One suites and with the enhanced, DELTA premium select and larger DELTA C plus cabins.

Glen Hauenstein: I think our product is best in class in the transatlantic. We continue to monitor our relative performance in terms of net promoter scores. I think it's leading right now, and it's going to get much better as we continue to deliver new airplanes with the Delta One suites and with the enhanced Delta Premium Select and larger Delta C+ cabins. I'm really excited about the product that we're putting in market. We've chosen not to fly narrow bodies in the transatlantic because of product and brand issues, and we're not going to go in that direction. Next year's capacity, I don't know. I think it's early in the game. Not everybody's announced what they're going to fly. Usually, everybody announces what they're going to fly, not what they're not going to fly. That usually follows after what we're going to fly next year.

Speaker #4: So, I'm really excited about the product that we're putting in market. We've chosen not to fly narrow bodies in the transatlantic because of product and brand issues.

Speaker #4: and, and so we're not going to go in that direction. And, but next year's capacity, I don't know. I mean, I, I think it's early in the game.

Speaker #4: Not everybody's announced what they're going to fly. And usually everybody announces what they're going to fly, not what they're not going to fly. And so that usually follows after, after what we're going to fly next year.

Speaker #4: So we'll see how it all shakes out. I, I, I think it's going to be probably low single digits. And as far as our summer, we'll be probably in the very, very low single digits if growth at all in the very peak months of July and August.

Glen Hauenstein: We'll see how it all shakes out. I think it's going to be probably low single digits. As far as our summer, we'll be probably in the very, very low single digits. It's growth at all in the very peak months of July and August with a slightly higher shoulder season, which is becoming more peaky.

Speaker #4: with a slightly higher shoulder season, which is becoming more peaky.

Speaker #7: Great. Thank you.

[Analyst 3]: Great. Thank you.

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

Operator: Thank you. Your next question is coming from Savi Syth from Raymond James. Your line is live.

Speaker #7: Hey, good morning. I wonder if you could, share what we're seeing on the kind of Latin America side, perhaps kind of broken out by near national and long haul?

[Analyst 3]: Hey, good morning. I wonder if you could share what you're seeing on the Latin America side, perhaps kind of broken out by near national and long haul.

Speaker #4: Latin America?

Speaker #1: Yeah, long haul, short haul.

Glen Hauenstein: Latin America, long haul, short haul. Yeah, long haul has been very solid for us. It comes into season in the winter. It's looking for a very good, strong winter season. Short haul has been a mixed bag. Caribbean doing well. Mexican beach is under a little pressure, but all still very profitable for us. Continuing to make investments in those regions.

Speaker #4: Yeah. long haul's been very solid for us. It's, it comes into season in the winter. It's looking for a very good, strong winter season.

Speaker #4: short haul has been a mixed bag. Caribbean doing well, Mexican beaches under a little pressure, but, all still very profitable for us. So continuing to, to, make investments in those regions.

Speaker #7: That's helpful. And if I might, on the maintenance side, Dan, so you maybe have, do you expect 2026 to be kind of above or below in terms of kind of heavy maintenance events and setting that aside?

[Analyst 3]: That's helpful. On the maintenance side, Dan, do you expect 2026 to be kind of above or below in terms of competitive maintenance events? Setting that aside, what are you seeing in terms of inflation on maintenance and parts? Is that getting better?

Speaker #7: Like, what are you seeing in terms of inflation on maintenance and parts? Is that getting better?

Speaker #3: Safi, apologize. We weren't able to hear you clearly on this side, Kay. I know it related to 2026, but I couldn't hear the context of the question.

Daniel Janki: Savi, apologize. We weren't able to hear you clearly on this side. I know it related to 2026, but I couldn't hear the context of the question. Could you repeat it?

Speaker #3: Could you repeat it?

Speaker #7: Yeah, sorry about that. I, I was just on, on the maintenance side. do you expect 2026 to have kind of more or less heavy maintenance events?

[Analyst 3]: Sorry about that. I was just on the maintenance side. Do you expect 2026 to have kind of more or less heavy maintenance events? Beyond the event, just on inflation, what are you seeing on the maintenance and parts? Is that improving from kind of heavy levels?

Speaker #7: And beyond the events, just on inflation, just what are you seeing on, on the maintenance and parts? And is there, is that improving from kind of heavy levels?

Speaker #3: Yeah, we're still, we're still in, in we're in the early stages of our planning for 2026. So we, we haven't worked through all, our capacity and maintenance of more to come on that as we work through the fall here.

Daniel Janki: We're still in the early stages of our planning for 2026. We haven't worked through all our capacity and maintenance. More to come on that as we work through the fall here. As it relates to inflation, yes, I think that's still one part of the supply chain, both as it relates to material availability, to repair, to components. All those have had inflation above the normal. They're coming more in line as the industry continues to get better, but it's got a long ways to go. We've kind of said that that part of the supply chain is multi-year in nature as it relates to the opportunities in front of it. Any aspect of it you can look at. The turn times and performance are still not at levels that we experienced in that 2017, 2018, 2019 perspective.

Speaker #3: as it relates to inflation, yes, you know, I think that's still one part of the supply chain. Both as it relates to material availability, to repair, to components, all those have had inflation above the normal.

Speaker #3: they're, they're coming more in line. as the industry continues to get better, but it's got a long ways to go. We've kind of said that, that part of the supply chain is, is multi-year in nature as it relates to the opportunities in front of it to any aspect of it you can look at.

Speaker #3: The turn times and performance are still not at levels that we experienced in the '17, '18, '19 perspective. As those come more in line and get healthier, you're going to see greater efficiency out of that.

Daniel Janki: As those come more in line and get healthier, you're going to see greater efficiency out of that.

Speaker #7: Understood. Thank you.

[Analyst 3]: Understood. Thank you.

Speaker #1: Thank you. Your next question is coming from Scott Group from Wolf Research. Your line is live.

Operator: Thank you. Your next question is coming from Scott Group from Wolfe Research. Your line is live.

Speaker #8: Hey, thanks. Good morning. So the fourth quarter earnings guidance is basically the same as Q3 earnings, and we've never really seen that before, I guess if you exclude CrowdStrike last year.

[Analyst 4]: Hey, thanks. Good morning. The fourth quarter earnings guidance is basically the same as Q3 earnings. We've never really seen that before, I guess, if you exclude CrowdStrike last year. I'm trying to understand, do you think this is just the new seasonality that makes Q4 a lot stronger, or would you say maybe that you under-earned in Q3? Maybe it's some of both. I think the implications for how to think about next year would be different based on how you think about that dynamic.

Speaker #8: I guess I'm trying to understand: do you think this is just the new seasonality that makes Q4 a lot stronger, or would you say maybe that you under-earned in Q3? And maybe it's some of both?

Speaker #8: I'm, I'm, I think the implications for how to think about next year, you know, would be different based on how you think about that dynamic.

Speaker #4: Yeah, the fourth quarter is actually at or slightly better than the third quarter. I think it's being driven by strong premium demands and corporate travel in season.

Glen Hauenstein: Yeah, fourth quarter, it's actually at or slightly better than third quarter. I think it's being driven by strong premium demands and corporate travel in season. We have a nice long season. If you remember last year, we had the election, and in the October period, we had the country kind of froze right before the election, and it unlocked a little bit after the election, but we had that period. We also have some favorability in terms of the calendar. I think fourth quarter is, as long as business is traveling, a very strong quarter for us. I think in third quarter, particularly in the transatlantic, we are going to strive to do better in next year's third quarter because we think we had some opportunity, if we had to replay that, to improve our results on the margin.

Speaker #4: So we have a nice long season. If you remember last year, we had the election, and in the October period, we had, the country kind of froze right before the election.

Speaker #4: And it unlocked a little bit after the election, but we had that period. We also have some favorability in terms of the calendar.

Speaker #4: So I think fourth quarter is, as long as business is traveling is a very strong quarter for us. And I think in third quarter, particularly in the transatlantic, we are going to strive to do better in next year's third quarter because we think we had some opportunity should we have to re if we had to replay that to improve our results on the margin.

Speaker #5: Okay. So maybe some of both.

Speaker #8: And then about a point of the revenue growth in Q3 was from MRO, maybe a little help from cargo. Is that sort of sustainable into Q4 and going forward, that MRO strength?

[Analyst 4]: Maybe some of both. About a point of the revenue growth in Q3 was from MRO, maybe a little help from cargo. Is that sort of sustainable into Q4 and going forward, that MRO strength?

Speaker #3: The MRO over the long term, yes. You're going to see it. You won't see it every quarter at 60% plus. I'd say both the second and third quarters were quite strong as it related to MRO.

Daniel Janki: The MRO over the long term, yes, you're going to see it. You won't see it every quarter at 60% plus. I'd say both the second and third quarter were quite strong as it related to MRO. For the year, you think of it more in that 20% to 30% range. We would like to see many years of MRO growth well above the growth of the core airline and being double-digit. You won't see it at those levels. You'll see much, actually, I think as you get to the fourth quarter, it's probably closer to flat year over year.

Speaker #3: For the year, you think of it more in that 20% to 30% range. But we would like to see many years of MRO growth well above the growth of the core airline.

Speaker #3: And being double-digit, but you won't see it at those levels. You'll see much, actually, I think as you get to the fourth quarter, it's probably closer to flat year-over-year.

Speaker #4: And And on, on, cargo, great, third quarter. And, a shout out to our cargo team. I think they did a fabulous job. We have seen some I'd say choppiness as we enter the fourth quarter and we'll see how that, res what the final result is.

Glen Hauenstein: On cargo, great third quarter, and a shout out to our cargo team. I think they did a fabulous job. We have seen some, I'd say, choppiness as we enter the fourth quarter, and we'll see what the final result is. I wouldn't expect that the 19% would be sustainable into Q4. It's probably going to come down from there. We'll see, but still probably growth in the cargo.

Speaker #4: But I wouldn't expect that the 19% would be sustainable into Q4. It's probably going to come down from there.

Speaker #1: Yeah.

Speaker #4: And, we'll, we'll see, but still probably growth in the, in cargo.

Speaker #5: Thank you guys. Very helpful.

[Analyst 4]: Thank you, guys. Very helpful.

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

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

Speaker #9: great. good morning, everyone. Glen, maybe a couple of follow-ups to your earlier comments, kind of specifically focused on one queue. can you help us understand how you're thinking about one queue network planning, just given all the continual noise that continues to be out there, and also what happened last year with the kind of closing weakness and corporate and everything else?

[Analyst 2]: Great, Dan. Good morning, everyone. Glen, maybe a couple of follow-ups to your earlier comments, kind of specifically focused on Q1. Can you help us understand how you're thinking about Q1 network planning, just given all the continual noise that continues to be out there, and also what happened last year with the kind of closing weakness in corporate and everything else? Are you treating last year as a one-off, or are you kind of being more cautious going into next year or fix that?

Speaker #9: Are you treating last year as a one-off, or are you being more cautious going into next year because of that?

Speaker #4: I think we're going to head into one queue the same way we're exiting four queue, which is with a very strong backdrop. And, you know, the quarter we know the most about is the quarter we're in, and the quarter we know the least about is the fourth quarter of next year.

Glen Hauenstein: I think we're going to head into Q1 the same way we're exiting Q4, which is with a very strong backdrop. The quarter we know the most about is the quarter we're in, and the quarter we know the least about is the fourth quarter of next year. As the first quarter comes into focus, the demand is looking quite robust. Let's hope that that spring swoon doesn't occur again next year.

Speaker #4: But, as the first quarter comes into focus, the demand is looking quite robust. And so, let's hope that the spring swoon doesn't occur again next year.

Speaker #9: Understood. And just kind of on that topic of one queue and kind of focusing on transatlantic, you guys have been talking about that shoulder season strength for some time now, clearly manifesting right now.

[Analyst 2]: Understood. Just kind of on that topic of Q1 and kind of focusing on transatlantic, you guys have been talking about that shoulder season strength for some time now, clearly manifesting right now. Last year in December, you said that Q1 of 2025 in transatlantic was setting up for one of the strongest years you've ever seen. Part of that was driven by a favorable U.S. dollar. The dollar is not as favorable right now. From what you can see right now, do you see European strength continuing into Q1 2026, similar to what you saw coming into this year?

Speaker #9: last year in December, you said that one queue of 25 in transatlantic was setting up for one of the strongest years you've ever seen.

Speaker #9: and part of that was driven by, favorable US dollar. The dollar is not as favorable right now, but are you, from what you can see right now, do you see, European strength continuing into one queue '26 similar to what you saw coming into this year?

Speaker #4: Yes.

Glen Hauenstein: Yes.

Speaker #9: Easy enough. Thank you.

[Analyst 2]: Easy enough. Thank you.

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

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

Speaker #10: Hey, good morning. And thanks for taking the question. Maybe this one's for Ed or Dan, but you guys, I think in your prepared comments talked about your long-term goals of margin improvement.

[Analyst 4]: Hey, good morning, and thanks for taking the question. Maybe this one's for Ed or Dan, but you guys, I think in your prepared comments, talked about your long-term goals of margin improvement. I think everyone would agree on this call that airline stocks could be viewed pretty cheap, but maybe margin growth would really be welcomed for investors. I guess in that context, what is in your control here as you look into 2026? I'm not necessarily looking for guidance, but does it just have to be a market that's growing capacity a lot less than we have in the past few years, or is it all these things that we're talking about on the commercial side that just gain more momentum? What can you do on the cost side as well? I think Dan was just hinting at efficiencies there too. Thank you.

Speaker #10: And I think everyone would agree on this call that airline stocks could be pretty cheap, but maybe margin growth would really be welcomed for investors.

Speaker #10: So I guess in that context, what is in your control here as you look into 2026? I'm not necessarily looking for guidance, but does it just have to be a market that's growing capacity a lot less than we have in the past few years, or is it all these things that we're talking about in the commercial side that just gain more momentum?

Speaker #10: And, and what can you do on the cost side as well? I think Dan was just hinting at efficiencies there too. Thank you.

Speaker #3: Yeah. No, go. You know, I think I'd point you back to a lot that we talked about last November. Thanks for the question.

Daniel Janki: Yeah. No, I think I'd point you back, thanks for the question, to a lot that we talked about last November. There were a lot of things in there that we talked about that were Delta-specific as it related to things that are in our control as we look forward. We want to drive, we run the company for margins. We want to drive margins up into the mid-teens as we laid out. We feel that the playbook and the strategies and priorities in front of us enable us to do that. It starts with those growing the high margin revenue streams faster than the core, premiums at the core of that. We talked about premium seats growing, main cabin outpacing main cabin, so you have more product out there. Continue to grow the Amex relationship and loyalty faster.

Speaker #3: There were a lot of things in there that we talked about that were dealt with as specifically related to things that are in our control as we look forward.

Speaker #3: And we want to drive, we run the company for margins. We want to drive margins up into, the mid-teens as we laid out. And we feel that, the playbook and, and the strategies and priorities in front of us enable us to do that.

Speaker #3: Starts with those growing the high-margin revenue streams faster than the core, premiums at the core of that. We talked about premium seats growing, main cabin outpacing main cabin, so you have more product out there.

Speaker #3: Continue to grow the Amex relationship and loyalty faster. So, those are things that help you as it relates to the top line. The fleet renewal supports that.

Daniel Janki: Those are things that help you as it relates to the top line. The fleet renewal supports that. You look at the things that we want to do that and still drive good cost performance of low single digit. It goes back to the growing into the airports that are already in our run rate. It goes into the fleet actions that we've been growing of simplifying the fleet and getting scale out of it associated with it. Long-term, continue to grow and get more efficiency out of not only our workforce, but the entire supply base, but also the benefits that technology brings to it. We want a steady march over time of doing that. Certainly, the industry backdrop is we could be beneficial to that if supply and demand stay in balance.

Speaker #3: and then you look at the things that we, we want to do that and still drive good cost performance of low single digit. And again, it goes back to the growing into the, to the airports, that are already in our run rate.

Speaker #3: It goes into the fleet actions that we've been growing of simplifying the fleet and getting scale out of it. associated with it. And then long-term continue to grow in, get more efficiency, out of not only our workforce, but the entire supply base, but also the benefits that technology bring to it.

Speaker #3: So we want a steady march over time of doing that. Now, certainly, the industry backdrop is we could be beneficial to that.

Speaker #3: Supply and demand stay in balance. There's a real opportunity for that also to support additional margin growth in excess of the things that are dealt as specific and controlled.

Daniel Janki: There's real opportunity for that also to support additional margin growth in excess of the things that are Delta-specific and controlled.

Speaker #9: Well, and just maybe the really quick follow-up. I think you guys said co-brand spindles are up 12%. I might be off on that, but could you talk about some of the loyalty drivers right now and how sustainable that is looking into next year?

[Analyst 4]: Just maybe as a really quick follow-up, I think you guys said co-brand spend was up 12%. I might be off on that, but do you talk to some of the loyalty drivers right now and how sustainable that is looking into next year?

Speaker #4: Well, I think it's been driven by two things. One is the premiumization of the card itself. So we've been acquiring a record number of premium cardholders.

Glen Hauenstein: I think it's been driven by two things. One is the premiumization of the card itself. We've been acquiring a record number of premium card holders, and their spend is multiple of what our base member card spend is. You look at the total acquisition numbers and say, I think this is our seventh year of a million or more acquisitions, that the mix of those acquisitions is skewing higher and higher in terms of getting, reaching a more premium audience. Those customers have better credit scores, so they get approved more often and they spend more on their cards. That's been really one of the key drivers for us, not only in the total volume, but the number of premium cards that we've been able to acquire. That's driven, you know, versus our 2X versus growth versus total card spend.

Speaker #4: And their spend is multiple of what our basic member card spend is. So while you look at the total acquisition numbers and say, I think this is our seventh year of a million or more acquisitions, that the mix of those acquisitions is skewing higher and higher in terms of reaching a more premium audience.

Speaker #4: And those customers have better credit scores, so they get approved more often, and they spend more on their card. So that's been really one of the key drivers for us, not only in the total volume but also in the number of premium cards that we've been able to acquire.

Speaker #4: And that's driven, you know, our 2X versus growth versus total card spend. And that's been year after year that we've been able to do that.

Glen Hauenstein: That's been year after year that we've been able to do that and looking to continue to do that through 2026. The more attractive and the more, you know, if you think about the question that was preceded about why Austin or why Raleigh, these are high-income growth areas. These are places that we've acquired a lot of cards in and trying to understand the interaction between the airline and the card and how to maximize both of those together as opposed to just looking at an individual route.

Speaker #4: And looking to continue to do that through '26. And as the more attractive and the more you know, if you think about the question that was preceded about why Austin or why Raleigh, well, these are high-income growth areas.

Speaker #4: These are places that we've acquired a lot of cards in. And trying to understand the interaction between the airline and the card and, and how to maximize both of those together as opposed to just looking at an individual route.

Speaker #9: Thank you, Glen. Thanks, Dan.

[Analyst 2]: Thank you, Glen. Thanks, Dan.

Speaker #1: Thank you. Your next question is coming from Tom Wadlets from UBS. Your line is live.

Operator: Thank you. Your next question is coming from Tom Wadewitz from UBS. Your line is live.

Speaker #10: yeah. Good morning. And thanks for the question. wanted to see if you could give, maybe a little bit of additional, sense of the, you know, looking at '26, you, you know, you're saying that you'll be in line with the, the multi-year view.

[Analyst 4]: Good morning, and thanks for the question. I wanted to see if you could give maybe a little bit of additional sense of the, you know, looking at 2026, you're saying that you'll be in line with the multi-year view, so let's say 10% earnings growth, something like that. Do you assume that you get to, you know, revenue growth, low single digit revenue growth, some kind of revenue growth in main cabin? Should we think about this where you really get there with the good visibility you have on the premium and card and other things? You kind of get to that multi-year growth without a meaningful swing up in main cabin?

Speaker #10: So let's say 10% earnings growth, something like that. do you assume that you get to, you know, revenue growth, low single digit revenue growth, some kind of revenue growth in main cabin?

Speaker #10: Or should we think about this where you really get there with the good visibility you have on the premium, and card and other things?

Speaker #10: And that, that, you know, you kind of get to that multi-year growth without a meaningful swing up in main cabin?

Speaker #4: Well, I think we've already seen an inflection in main cabin, which is very exciting to us. The trends that we see today are probably the trends that are going to carry us at least through the beginning part of 2026.

Glen Hauenstein: I think we've already seen an inflection in main cabin, which is very exciting to us. You know, the trends that we see today are probably the trends that are going to carry us at least through the beginning part of 2026. I would expect that main cabin does have improvement as part of our base, as part of our base revenue assumptions for 2026. On top of that, the continued growth of the premium products and the card spend as well. Yeah, I'm excited about the fact that we have finally inflected in the main cabin.

Speaker #4: So I would expect that main cabin does have improvement as part of our base as part of our base revenue assumptions for '26. And on top of that, the continued growth of the premium products and the card spend as well.

Speaker #4: So yeah, I'm, I'm excited about the fact that we have finally inflected in, in the main cabin.

Speaker #10: Okay, but you wouldn't necessarily see that as upside. That's kind of assumed within getting to what, you know, what the multi-year is?

[Analyst 4]: Okay, you wouldn't necessarily see that as upside, that's kind of assumed within getting to what, you know, what the multi-year is?

Speaker #4: We haven't given any guidance on that yet, so.

Glen Hauenstein: We haven't given any guidance on that yet.

Speaker #10: Yeah. Thank you. Okay. Okay. No, that I appreciate that. That's fair enough. The improvement in main cabin, do you think that that's like, you know, I think the consumer and especially kind of lower-end consumer is, you know, it's unclear whether how optimistic you should be.

[Analyst 4]: Okay. No, I appreciate that. That's fair enough. The improvement in main cabin, do you think that that's like, you know, I think the consumer and especially kind of lower-end consumer is, you know, it's unclear whether, you know, how optimistic you should be. Do you think that what you've seen in the sales trend that's been favorable is that consumers flying more? Do you think it's just Delta's share in kind of industry capacity rationalization that's been beneficial? What do you think the kind of bigger driver would be of that improvement you've seen in Q4 and carrying into 2026?

Speaker #10: So do you think that what you've seen in the sales trend that's been favorable is that consumers are flying? Or do you think it's just Delta's share, in kind of industry capacity rationalization that's been beneficial?

Speaker #10: Or what do you think the bigger driver would be of that improvement you've seen in Q4 and carrying into '26?

Speaker #4: You know, at the low end of the industry, there's been a lot of seats removed, and that's allowed us to get a footing on fares.

Glen Hauenstein: At the low end of the industry, there's been a lot of seats removed, and that's allowed us to get a footing on fares. I think when you think about the financial performance of the carriers that are catering to the lower-income customers, they have not been good. Some had to declare bankruptcy. It's the restructurings that they're going through and having to get higher fares. They can't, they need more money to survive. We had one of our competitors say something about it's just math. It is just math. They have to get their fares higher, and that helps us get a footing on our main cabin as well.

Speaker #4: I think when you think about the financial performance of the carriers that are catering to the, lower-income customers, they have not been good. And, you know, some have had to declare bankruptcy.

Speaker #4: And, you know, it's the restructurings that they're going through and having to get higher fares. They can't, they need more money to survive.

Speaker #4: And so you know that we had a, one of our competitors say something about it's just math. Well, it is just math, is that they have to get their fares higher.

Speaker #4: In terms of, and that helps us get a footing on our main cabin as well.

Speaker #2: Matthew will now go to our final analyst question.

[Analyst 3]: Matthew, we'll now go to our final analyst's question.

Speaker #1: Certainly. Your last question is coming from David Vernon from Bernstein. Your line is live.

Operator: Certainly. Your last question is coming from David Vernon from Bernstein. Your line is live.

Speaker #10: Hey, good morning, team. And thanks for, for me in here. so Glen, maybe just a quick micro question for you in terms of the competitive capacity being down in DELTA hubs year over year.

[Analyst 2]: Hey, good morning, team, and thanks for fitting me in here. Glenn, maybe just a quick micro question for you in terms of the competitive capacity being down in Delta hubs year over year. I'm wondering if you're seeing any kind of difference in domestic revenue trends in your hubs versus some of the point-to-point leisure markets. I'm trying to get a lot of questions about whether kind of what you're seeing in main cabin is going to be an industry-wide thing or more of a Delta-specific thing.

Speaker #10: I'm wondering if you're seeing any kind of difference in domestic revenue trends in your hubs versus some of the point-to-point leisure markets. I'm trying to get a lot of questions about whether what you're seeing in main cabin is going to be an industry-wide thing or more of a Delta-specific thing.

Speaker #4: Well, we have three categories: we have Coastal Gateways, we have Core Hubs, and then we have Focus Cities. And they've all been behaving well. I'd say the biggest improvements have been in the Coastal Cities, where we've seen a big uptick.

Glen Hauenstein: We have three categories. We have coastal gateways, we have core hubs, and then we have focused cities. They've all been behaving well. I'd say the biggest improvements have been in the coastal cities where we've seen a big uptake. These are also the biggest and wealthiest cities in the country, the New Yorks, the LAs, the Bostons, Seattles, where corporate travel is significantly improving year over year and our share is improving. That's really been a big driver of it. The hubs have been performing very, very well. Our focused cities, the ones that we're investing in, are good as expected. I think it's a broad brush improvement from where we were just, you know, 90 days ago.

Speaker #4: And these are also the biggest and wealthiest cities in the country: New York, Los Angeles, Boston, and Seattle, where corporate travel is significantly improving year over year and our share is improving.

Speaker #4: So that, that's really been driver. a big driver of it. And the hubs have been performing at a very, very well. And our focus cities are the ones that we're investing in are, are as, as expected.

Speaker #4: So, yeah, I think it's a broad brush improvement from where we were just, you know, 90 days ago.

Speaker #10: Excellent. Thanks for that. And then maybe just if we kind of step back for a second, coming back to the commentary around, you know, earnings consistent with a long-term financial framework, you know, given the, the, the weakness in the, you know, the, the weirdness of frankly of 2025 with the, the second quarter slowdown, some of the irregular ops days.

[Analyst 2]: Excellent. Thanks for that. If we kind of step back for a second, coming back to the commentary around, you know, earnings consistent with a long-term financial framework. Given the weakness and the, you know, the weirdness of, frankly, of 2025 with the second quarter slowdown, some of the irregular ops days. If we don't have something like that repeat, is there any reason to think that we shouldn't be at the upper end of the frameworks you guys have laid out in the past? I'm just thinking just the comps are just going to be so much easier for a big part of next year that maybe we shouldn't be thinking that. I'm wondering if there's a reason we shouldn't be thinking it would be at the higher end of your longer-term financial framework.

Speaker #10: I mean, if we don't have something like that repeat, is there any reason to think that we shouldn't be at the upper end of, of, of the, the, the, the framework you guys have laid out in the past?

Speaker #10: I'm just thinking just the comps are just going to be so much easier in, in, in for, for, for a big part of next year that, that maybe we shouldn't be thinking that if I'm wondering if there's a reason we shouldn't be thinking it would be at the higher end of your, your longer-term financial framework.

Speaker #4: Hi, David. This is Ed. I'll take that. You know, we haven't given '26 specific insights yet, nor have we completed our planning process. So we'll probably be better equipped to talk about that towards the end of this year or early next year.

Glen Hauenstein: Hi, David. I'll take that. You know, we haven't given 2026 specific insights yet, nor have we completed our planning process. We'll probably be better equipped to talk about that towards the end of this year or early next year. No question, we saw some pretty, pretty strong headwinds that came quite abruptly. It hit us in late January, early February. We had the aircraft incidents, which certainly hurt revenue growth in some important markets. You had a lot of the trade uncertainty, saw consumer confidence plummeting, and to the point where Delta, as you recall, we wound up pulling our guide. There was so much uncertainty for a short period of time. No question, we have some tailwinds as we look forward into the new year. If today's environment projects into 2026, I think 2026 is going to be a really strong year.

Speaker #4: But no question, we saw some pretty, pretty strong headwinds that came quite abruptly. They hit us in late January, early February, and, you know, we had the aircraft incidents.

Speaker #4: Which, which, which certainly hurt revenue growth and, in some important markets, you had to deal with a lot of the trade uncertainties while consumer confidence was plummeting.

Speaker #4: And to the point where Delta, as you recall, we wound up pulling our guide. We were dealing with so much uncertainty for a short period of time.

Speaker #4: So, no question that we have some tailwinds as we look forward into the new year. If today's environment projects into 2026, I think 2026 is going to be a really strong year.

Speaker #10: All right. That's very helpful. Thank you very much for the time.

[Analyst 2]: All right. That's very helpful. Thank you very much for the time.

Speaker #2: All right, Matthew. That will wrap up the analyst portion of the call. I'll now turn it over to Tim Mates to start the media questions.

[Analyst 3]: All right, Matthew, that will wrap up the analyst portion of the call. I'll now turn it over to Tim Mates to start the media questions.

Speaker #1: Thank you, Julie. Matthew, as we transition from the analysts to members of the media, if you wouldn't mind, please describe how best to enter into the call queue and the process for one follow-up, please.

[Analyst 1]: Thank you, Julie. Matthew, as we transition from the analyst to members of the media, if you wouldn't mind, please describe how best to enter into the call queue and the process for one follow-up, please.

Speaker #5: Certainly.

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

Operator: Certainly. At this time, we'll be conducting a Q&A session for media questions. If you have any questions or comments, please press star, then one on your phone. Please hold while we poll for questions. Thank you. Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Please hold while we poll for questions. Your first question is coming from Leslie Joseph. Your line is live.

Speaker #1: Please hold while we poll for questions. Thank you. And once again, everyone, if you have any questions or comments, please press star, then one on your phone.

Speaker #1: Please hold while we poll for questions. Your first question is coming from Leslie Joseph. Your line is live.

Speaker #11: Hi, everyone. We've seen Amex, Chase, and some others raise credit card fees. I'm just wondering if you see any pushback from customers, in terms of acquisitions on your end, and if you think that credit card annual fees, at least, can keep going up.

[Analyst 3]: Hi, everyone. We've seen American Express, Chase, and some others raise credit card fees. Just wondering if you see any pushback from customers in terms of acquisitions on your end, if you think that credit card annual fees at least can keep going up. My second question, also seeing really long upgrade lists, which I guess would be good for you guys because you have a lot of elites, not just on your airline, but others. Curious how you're managing that and if the percentage of paid seats in premium has gone up since the last time you've updated everybody. Thanks.

Speaker #11: And then my second question, also seeing really long upgrade lists, which I guess would be good for you guys because you have a lot of elites.

Speaker #11: Not just on your airline, but others. I'm curious how you're managing that and if the percentage of paid seats in premium has gone up since the last time you've updated everybody.

Speaker #11: Thanks.

Speaker #4: Card Card fees. But we also injected a lot of value for customers and we had a record acquisition in that this year. And so we're very pleased with the results.

Glen Hauenstein: Card fees, but we also injected a lot of value for customers, and we had a record acquisition in that this year. We're very pleased with the results. I can't really comment to the results of American Express or Chase, but I would say as long as you're providing more value to the customers, it seems like a pretty safe bet that there's going to be strong demand for those premium products across the spectrum. In terms of our

Speaker #4: I can't really comment on the results of Amex or Chase. But I would say, as long as you're providing more value to the customers, it seems like a pretty safe bet that there's going to be strong demand for those premium products across the spectrum.

Speaker #4: And in terms of our, our, our.

Speaker #1: Yes, there's a long standby list, and we have a lot of premium customers. That's one of the reasons we've expanded our Comfort Plus offerings, because our most elite customers are allowed to upgrade into those products at the time of booking, and we didn't have enough of those.

Operator: Standby list, yes, there's a long standby list, and we have a lot of premium customers. That's one of the reasons we've expanded our Comfort Plus offerings, because our most elite customers are allowed to upgrade into those products at the time of booking. We didn't have enough of those. If you look across the spectrum, we were generally sold out of Comfort Plus early in the booking curve, and now being able to increase that so we can accommodate more of our most premium customers with premium offerings at the time of booking.

Speaker #1: If you look across the spectrum, we were generally sold out of Comfort Plus early in the booking curve. Now, we have been able to increase that capacity so we can accommodate more of our most premium customers with premium offerings at the time of booking.

Speaker #2: Thank you.

Speaker #3: Thank you. Your next question is coming from Mary Schlingenstein from Bloomberg News. Your line is live.

Julie Stewart: Thank you. Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live.

Speaker #4: Hi, good morning. in your forecast for transatlantic travel, I'm wondering if you still expect that to be mostly driven by US point of sale and do you see a rebound from non-US-based customers?

Ed Bastian: Hi, good morning. In your forecast for transatlantic travel, I'm wondering if you still expect that to be mostly driven by U.S. point of sale, or do you see a rebound from non-U.S.-based customers?

Speaker #1: You know, it's always been US point of sale driven. and so, so the question is how US point of sale will it be? you know, and our our point of sale revenue on our revenue we're approaching 80% US point of origin.

Operator: It's always been U.S. point of sale driven. The question is, how U.S. point of sale will it be? Our point of sale revenue, on a revenue, we're approaching 80% U.S. point of origin. Yes, we hope that there's going to be more. The dollar, of course, has strengthened. That makes coming to America more of a bargain for customers. Hopefully, we see that translate into a little bit higher European point of sale. We are mostly a U.S. point of origin driven company.

Speaker #1: So, yes. We hope that there's going to be more. The dollar, of course, has strengthened. That makes coming to America more of a bargain.

Speaker #1: For customers, and and so hopefully we see that translate into a little bit higher European point of sale. But, we are mostly a US point of origin-driven company.

Speaker #4: And what are some of the other factors that are ongoing that you see constricting non-U.S. point of sale? Is it still some of the concerns over immigration policies, things like that?

Ed Bastian: What are some of the other factors that are ongoing that you see constricting non-U.S. point of sale? Is it still some of the concerns over immigration policies, things like that?

Speaker #1: There's clearly safety concerns. There's there's a whole host of concerns of, of travel to the US, but I think, you know, we still have a great product here and we have great cities and we have people, with relatives and friends and family and so that it's gonna be there's gonna be demand.

Operator: are clearly safety concerns. There is a whole host of concerns of travel to the U.S., but I think we still have a great product here, and we have great cities, and we have people with relatives and friends and family. There is going to be demand. The question is, how much demand? The good news for us is we're not totally dependent on that. It's not our core business. I would expect hopefully that next year is a little bit better than this year for European point of sale. If for nothing else, the appreciation of the euro has made European fares look relatively more attractive. Mary, this is the conversation, it's also on the margins, right? It isn't as if Europeans have stopped traveling. They're still traveling in large numbers. The numbers may be down 5%, 7% in some of the markets. We're long term.

Speaker #1: The question is how much demand and, and, the good news for us is we're not totally dependent on that. It's not our core business, but, I would expect hopefully that next year is a little bit better than this year for European point of sale.

Speaker #1: For nothing else is that the appreciation of the euro has made European fares look relatively more attractive. And Mary, this is Ed.

Speaker #1: You know, the conversation, it's also on the margins, right? It isn't as if Europeans have stopped traveling. They're still traveling in large numbers.

Speaker #1: The numbers may be down, 5% to 7% in some of the markets. You know, we're long-term; we think our business model is very healthy for global expansion, and you're going to continue to see us pursue that.

Operator: We think our business model is very healthy for global expansion, and you're going to continue to see us pursue that.

Speaker #4: Great. Thank you very much.

Speaker #1: Thanks, Mary, and congratulations. Matthew, let's squeeze one more in, please.

Ed Bastian: Great, thank you very much.

Daniel Janki: Thanks, Mary, and congratulations. Matthew, let's squeeze one more in, please.

Speaker #3: Certainly. Your last question is coming from Niraj Troxy from the New York Times. Your line is live.

Julie Stewart: Certainly. Your last question is coming from Mirage Choksi from The New York Times. Your line is live.

Speaker #5: Hey, thank you. I was just curious, you know, there's there's some talk about the industry sort of bifurcating, you know, DELTA and United on one side doing very well and and then sort of the rest and, you know, I guess do you agree with that that assessment?

[Analyst 1]: Thank you. I was just curious, you know, there's some talk about the industry sort of bifurcating, you know, Delta and United on one side doing very well, and then sort of the rest. Do you agree with that assessment? If so, is it structural? Is it a sort of industry phase? Just sort of curious to get your sort of sense of what's happening.

Speaker #5: And then, if so, is it structural? Is it a sort of industry phase? Just curious to get your sense of what's happening.

Speaker #1: it's clearly, happening. if you look at the results this quarter, as I mentioned on CNBC this morning, we expect 60% of the overall industry profits to be driven by DELTA, expect the rest of it probably to be driven by United.

Operator: It's clearly happening. If you look at the results this quarter, as I mentioned on CNBC this morning, we expect 60% of the overall industry profits to be driven by Delta. Expect the rest of it probably to be driven by United largely. Then you have everybody else. This is not a new phenomenon. This has been happening really since COVID hit for over the last four or five years. There's a lot about the industry fundamentals that have changed, that we at Delta are driving a much higher level of quality experience, whether it's reliability, whether it's the product and services that we offer, whether it's the partners we're bringing to the table, whether it's the expansion internationally. If you are in a category that is seen as more of a commodity purchase, they're having a very difficult time.

Speaker #1: Largely. And then you have everybody else, and this is not a new phenomenon. This has been happening really since COVID hit, over the last four or five years.

Speaker #1: you know, there's a lot about, the industry fundamentals that have that have changed. That, we at DELTA are are driving a much higher, level of of quality experience, whether it's reliability, whether it's the product and services that we offer, whether it's the, partners we're bringing to the table, whether it's the expansion internationally.

Speaker #1: And, if you are in, a category that that is, you know, seen as more of a commodity, purchase, that they're they're they're having a very difficult time.

Speaker #1: You know, their cost structure's have increased as as labor costs have gone up. it's been very difficult to get airplanes to get supply. growth, those those lower-end models depend on high growth.

Operator: Their cost structures have increased as labor costs have gone up. It's been very difficult to get airplanes to get supply growth. Those lower-end models depend on high growth. There's a lot of congestion in the U.S. marketplace in terms of the sky. I think the bifurcation you're seeing is going to continue. Eventually, there will need to be rationalization to enable the lower end of the price spectrum to continue to sustain itself, to be able to continue to attract capital. I think we're seeing this all play out right in front of our eyes.

Speaker #1: And there's a lot of congestion in the in the, the US marketplace in terms of the sky. So, I I think the bifurcation you're seeing is gonna continue.

Speaker #1: And eventually, there will need to be rationalization to enable the lower end of the price spectrum to continue to sustain itself, to be able to continue to attract capital.

Speaker #1: And I think we're seeing this all play out right in front of our eyes.

Speaker #5: Thank you.

[Analyst 1]: Thank you.

Speaker #1: Matthew, that will wrap this up, please.

Daniel Janki: Matthew, that will wrap us up, please.

Julie Stewart: Certainly. Ladies and gentlemen, that concludes today's conference. Thank you for your participation today.