Delta Air Lines (DAL) 12 Oct 232023 Q3 Earnings call transcript

Good morning, everyone, and welcome to the Delta Air Lines September Quarter 2023 Financial Results Conference Call. My name is Matthew, and I will be your coordinator. [Operator Instructions] As a reminder, today's call is being recorded. [Operator Instructions]

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

Thank you, Matthew. thanks us. and everyone, morning, for joining Good Today, Bastian; CFO, President, we are Dan CEO, Ed joined by Glen in Atlanta, Janki. Hauenstein; and our Delta's Ed and open the with overview will call strategy. of an performance discuss an update revenue Dan balance Glen will costs on our provide in environment, the and will sheet. we'll about forward-looking prepared represent statements remarks, then our analyst future media our beliefs questions take the to questions. Today's expectations events. that After and or we'll move discussion contains actual uncertainties All differ results forward-looking the risks could statements. to and from that statements forward-looking the materially cause involve

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

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

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

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with let me to And to details Dan to that, hand it the the over through Glen go quarter. and of

X.X%, the XX% prior employees good year. In MRO. Cargo travel their of Thank morning. generated and from you, the summer Total dedication for pressure season. up $XX.X down Ed, a September point of revenues unit busy all revenue and quarter, want by over work thanking start I to hard during billion, and Delta our including of were

commercial are passenger With these Delta prior premium revenue we in our over industry, record a where with up Performance X% revenue generational results, success steady to airport was strategy. Domestic versus strength I hubs the continued expect leading was through quarter coastal in deliver positions unit September leveraging the year. of our the our reflecting quarter bills.

expectations. travelers through revenue prior the X premium outperforming strength international a to growth cabin our as increase companies business across into demand line services their double-digit producing 'XX. outperforming this loyalty up passenger already Express Transatlantic our A of travel like demand has of record with we steadily well stay improve grew corporates paid record same recent above these this the the during Premium high to to travelers cabins strong a up in and sectors Pacific continued our products we portfolio. by financial XX% remains now with prior and levels. Total and quarter. travel $X.X approximately majority the year. was expecting American to corporate over over advance rolled above XX% initiatives. flights, return-to-office has delivered co-brand with merchandising from our revenue are upsell prior long-haul the in key significant out indicates capabilities. Amex grew premium our margins continue contributor XX% international margins. Business XXXX expectations been corporate and generation continues was growth as a survey from year travel saw and product in Less and first-class remuneration Select continue factor Delta XQ to been record We recovered revenue revenue all margins fall. Demand SME strength is move main a and year, continued into billion with points. Domestic XX% hybrid International load with or as very technology over and and over our continuing of for is with in XX%, entities summer

revenue reaching loyalty remuneration differentiated streams, year goal revenue of close Delta's full and including to year-to-date, expect industry. Diversified billion. long-term We $XX billion premium focused XX% are to of reflecting positioning the of and generated have $X our on

less product. Capacity year, than fourth XX%, This few up Delta our to for is over full planned reflecting in revenues demand be unit our to we to we revenue to guidance versus the up grow over prior the unit down expected the implying XX% with capacity December X.X% year. XX% quarter to points had year, quarter, a total Turning end X.X% X% to prior prior high is total revenues even year year. bringing of the at the to for XX% robust expect

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

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

the evaluate monitoring restoring capacity core traffic in hubs focused Israel we to continued The situation performance. on we In remains very Pacific, remain restarting demand where the the December through quarter flights the restoring winter. expecting network. and are leisure fully and XX% strong, our we partner continue XX% European the grow driven international, by strength strong Southern as as expect reallocated as have higher-margin We leisure stabilizes. We're capacity Transatlantic we will the to closely seeing returns hubs. On to we situation are international

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

integrated the across commercial drive entities. In I'm confident continue performance that proud closing, For international with profitability I'm industry-leading all strong we and our delivered, to the record of confident profitability. our will have strategy teams X year, remain finishing revenue in

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

morning Thank you, Glen, and good everyone. to

XX.X%. delivered gross gallon, quarter, of September we $X.XX. up of earnings and ended fuel into of $XX.X prices a including Liquidity billion generated operating and billion. were share and and quarter operating flow $X.X a billion invested $X.XX of our of per including debt. the at debt repayments we've $X.XX $X.X refinery benefit margin Nonfuel is cash net unit the on we $X.X We of debt. This averaged costs of the For -- year-over-year accelerated billion $X.X billion business. repaid Year-to-date, reinvested billion higher-cost adjusted $X.X X.X%

a Our improved XX-month leverage to on ratio trailing Xx basis.

the upgraded from away our During credit quarter, to improving S&P financial rating BB+, a foundation. of recognition X our notch investment-grade,

in and capital balance with business reinvesting improving a cash investment-grade Our return the to to dividend. metrics through priorities our modest allocation our are sheet shareholders

guidance. Now moving to

to quarter, For we a expect costs flat on up X% basis. the year-over-year unit December nonfuel to be

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

improved are are health; XXX As supply challenges work starting health third, second, X chain. On on first, performance. fleet we deliver and to in and drivers there investments the maintenance: fleet our fleet; scope to September, discussed investment higher across reliability, in engine operational our expanded

Our and were ahead August of September metrics September. October is of ahead

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

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

face On the productivity. continues Engine take work impacting elevated, challenges industry to times supply remain airframe inefficiency and driving turnaround will time chain, and to through. that

to partners and industry. to performance, promise expertise central We drive our the heritage chain is leveraging a of pacing driven TechOps in key inefficiencies. Operational brand long by supply a industry-leading our deep best TechOps out are capability challenges. Delta working in our and item to closely excellence manage operational with has the

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

billion. $X.XX earnings the mid-November. free to with margin the We fuel operating we be our December and progressing we gallon, for we outlook to expected a breakeven production $X The roughly expect double-digit and of for of revenue brings $X.XX planned prices in turnaround on per to margin. costs, and resume on to as expect is operating X% expect This $X.XX $X.XX cash December to flow earnings our be to year Based to quarter per $X.XX full per outlook to quarter. share $X on share XX% to refinery refinery

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

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

the next we year, grown how and us rate unprecedented to run an last reducing reliability Over years, normalizing resulted operational our will Growth we've the expect optimize that have continue an size inefficiencies for is buffers improve. rebuild. operational airline, This intensity at our to to restore driving to airline and the the X of from out allow network. we of

areas Internationally, increasing Our and will high-margin we leveraging are next-generation the mix prioritizing of XXXX capacity Delta's hubs, for strength. are Domestically, gauge. focused our JV growth flying of aircraft. our we and partnerships core on connectivity be on driving best-in-class

Investor with strategy objectives laid durability well people capital and positioned everything do emphasis Delta the against leadership efficiency. In an out operationally every closing, earnings our Day to industry flow, financially. to cash at and and I'd financial Delta day. sincerely like We for are maintain the is thank we free on executing they

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

Thanks, a for up question? remind can how you Matthew, the Dan. to queue analysts please

first question Jamie from JPMorgan. Baker from Instructions] Your [Operator coming is

simply realize your So the comments, against we're with I focused believe trying just engine and groundings or on you're some the MRO your square least any GTF Dan, impacted I'm to on don't up obviously directly you're of reducing Pratt your not at expanding now. right And I -- to situation should benefiting situation. XXXX expectations? downside this scenario peers? expertise. Also, the think the impact of about some is embedded mess a guide your your we relative in-house more where GTF how maintenance does Or cost Delta? there ends the CASM in

the fleet. modest or are the analysis be half so Maybe there waiting that be still first appropriately. to so month based later XXXX assess If any XXX our on and we on to off-wing, this analysis Pratt. Turbofan on to should the that will That far inspections as we directly latter took of it the Geared both relates it our related with the impact We're later in from neo, start more the deliveries impact will be full things we've the minimal. will gotten coming fleet,

As to We're to them working we it relates ours their as that third-party is and capability. partner And it relates that. certainly certainly a an of will Pratt with close on MRO, support efforts. important one closely

working to have next allocation into the capacity material and that them of capacity the availability through work, We that. comes of down year do and ultimately to with but we'll on fall be

And Okay, before. of Delta obviously lot asked that's helpful. vacations lavish A this for fairly European took customers Glen, I've year. then about this

on spent Any Venn wondering that? because on know, and people folks. like? actual their spenders correlation SkyMiles on What's for you SkyMiles share potential that, summer have these what trips data their sort of big lavishly the data big spenders? scaling is winter winter You the on summer I don't can between they've diagram back What's I'm look Because about holidays.

Sure.

really is the which ending travel the from IATA of about be European we're October. season, primarily that excited gone And season. has what think would really the in lengthening I summer

Now through holidays, Year now talking doldrums about November, are period New to for X- the the the we're Europe. X-week and through through really a that only

accelerating winter the expected, and year-over-year which fall the we wouldn't look have reduced into are November, schedule bookings, most our comps in as January. IATA the and the So our But of into course, people we winter season. December actually

more we're winter, this that. of very and course, we the I of winter very Latin that a seeing seems expanded lot did winter we've continuing And into for excited demand than that leisure into robust. parts very, and So last we're advanced fall early about the think and also,

is shoulder very leisure even strong So still through off-peak and and periods.

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

full is if what international domestic changes? more kind in If seeing you also related that you're down may, as comment you out is if just I for the recently going weakness first first quarter's well? of Or the in I make to flat trend a about to year, strength kind capacity a Glen, last relative related on just So year turned to wasn't of was the maybe were in was -- that basis? quarter. to or decent being way some was your wondering that it it capacity and expected or that the

reshaping It's markets, so East-West really we tier a and no last shock, in the transcon warmer to not market, barnburner northern February those reallocating of the saw patterns are demand year. to sunnier that places. And and January

with in slightly. warm South Domestic up capacity down on places So be emphasis up. will will our America Pacific. total be and be more hubs will and Core actually capacity Latin sunny

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

talked revenue, from was kind transatlantic is about reason I what longer portion different of on been maybe we're that is domestic domestic of ask of That Delta kind than makes comment wondering than seems the purely hubs since I separately you've perhaps, your stable hearing getting international the kind the at it much restoring continuing given And sense. of the stable is also just domestic a may The trips, airlines. strength if I little you're of what in and of contribution from historic? you've June. kind bit how

right. Right,

few terms coming which been to carriers. speak really I variance of not think weeks. on year. in for was what it to portion the hasn't domestic But domestically. And coming I'm what minimis in it have all next domestic journey, the other premium is de the of from They really strength is products going the international last

XX% low to so up minimis double really digits, impact de our are -- Our in only transatlantic but represents travel, a domestic. employments total to of the that

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

on very have the years demand differentiated So think about to strategy that we've the last reinforces excited those working a I been XX And trends. for product.

Cunningham Your from next Melius coming question from Research. Conor is

Ed, of of seem erratic an adjustment touched recapture. doesn't in the there on like, capacity you I Right indices prepared on fuel. despite, side fuel much now, remarks, to participants your be some the think from

new if current you're in how trying approaching understand calculus a right fuel So the just now there's recapture market. to to

as really Well, lot the to within fuel just that obviously, it's months. volatility it. last the hard awful recapture fuel an couple to of of us the moved hits And ability compared

we've to I over X- X-quarter seen a rise. think traditionally,

pretty success it. the demand are the at inflationary good pressure, about board, across maintenance a and you fuel have just recapturing We fact are when strength costs increasing and other rate chain rates but are up, everyone's of up. that supply And the think the environment labor not costs and

Everyone a has be those market to to into able -- recalibrate similar to those pricing continue pricing. pressures incentive

there. So my Glen can as outlook into is I'm going 'XX. add his color optimistic own we're

you few into well. price I No, fuel really realized takes rapid usually takes when mentioned run-ups, think worked. time. fares. quarters it's have the industry But it that It for always to roll it historically, we And a

predict So to future, we're would history tell that's what the the history but at looking you.

Okay, investments. appreciate maintenance then to back operational and that. And just the Dan, costs

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

next doing that us maintenance, that operational least we're related it. item the of to you you. help is 'XX investments here. talked foundational our will to drive talked we're fleet middle work with Conor, into the to were about to stay reliability it middle thank planning When it year, making at reliability. a here engines, And be Ed that the the want We're we're our -- and We're first as and the in relates certainly going after about, as think process. Yes, about in operational the half of we of on and that

be talked to as second and of Day, as is, unlock is cost that our that plan to working to our that getting are lean operational to XXXX. The into inefficiencies optimize investment see get liability that improve, and And billion-plus. inefficiencies that part and the and you operational able that be foundation continue more you teams teams of out, their Investor what for reliability, back as our those plan And operating those to in out about are building start more investment we really able they're that at creates that part through will $X buffers financial every the operation.

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

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

can Glen too. in chime Yes. here,

I how and The fleet, we fly XXX has characterized we've a fleet been good as certainly and very it deploy within a think through are restoration that that returns to it related a gone it's one our network. workhorse. flexible we've our it's as the

where have new we're have delivery on back number it. as slide see recalibrated been XX, ago, we we we year-to-year. we of more that we When think continue flying, to leaned might XX months the get So and you reactivated have

started next team in that leaned it's then of on be good So we'll really allows we'll of that very very year overhauls years been one Delta next X we're gets an heavy the but we us same X, life that this the always and a last engines managing that end to viable have The how is us through through at doing year, has year the X, deploy asset. wave as that into. And the it it. wave we and work we flexible regards we've of that one

but XXs, get and to how did in in the those And in returns or deploy in manage also whole it's a stream. working out fleet redeployed of on and Glen them, deploy it you them for they're it's But for and back regards returning most the the -- how workhorse assets whether the them We to XXs with our the good then fleet them. we on great maintenance are returns. team those get good with and always closely with how best parts are

Nothing to add a other late took we of lot than deliveries.

our had was think I last one ever the XX -- produced built. we last

So some be of profile the the these as you decade, have but we'll start of planes these which fleet. the are -- of of in improve will able as we harvesting the get life our not to have that really the said, and engines, really end them we maintenance old, end this and we fleet, to towards of

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

been into the the was having dried have OEMs large towards and which given and That that chain in on is repair the to as Their running Delta's the as up, point flight the is It challenges well a over supply one And inability their been Your engines parts within having OEMs right. fundamentally. which market own they're assets own core to strength produce TechOps time acquire our new. the time. is market struggling thing related ability to has largely rebound on used repurpose at has our of to same produce needs. time, part all the at them activity, go

we'll the expense the to long-term business -- the talked And I'd just going think come. see at the it's Investor you're and years Delta. asset may that's This So going about this the best going all at a to because one capacity put is know can that across money is we isn't I dividends to out. keep pretty know constraints while my That's Day. industry. figure the this a limited And hit But Delta to pay us produce. on they're something line, TechOps we we in is team this this amount in we it of for the of

reopen? Appreciate Pacific, in And then expansion just and of excited Glen, what just those November. there's Pacific And follow-up from about? can in my round are the thoughts. I in China where that for maybe are broadly here another remind on we China you're us think just markets away you

to very I and place of expectations. to We excited exceeded connect to any hubs or success that it's has really Well, even our connect. the of the what Southeast Incheon is think a from think Asia we're with about one get hub our Korean, double our as best

So really some that, on been continuing trying lynchpin. to and But leverage a year. have work announcements to our next to really capacity that's increase we'll

tune for really South same been has a us. great destinations. surprise The really demand there Pacific demand that in with high leisure for

that's been Japan. well doing as well So as very

couple know, quite is and Japanese Japan you our a doing As was closed franchise well. for years of

our Pacific, many where it finally opportunities we're in be. to had airports. the to we're to airplanes. at we So on. you And restructuring put Pacific We you hold wrong years if to there investors We've returns got get and were We we this and wanted the us we're producing together, and coming. the the took years, recall, about great for wrong forward. moving were telling But our excited

Appreciate thoughts. the detailed

China, XXx say sorry, essentially Detroit I'm to in didn't I and We Seattle of daily Detroit from double -- a daily double went China, course. moving weekly, and -- to moving Detroit week, Seattle Xx. in to with

another and of -- this. if we'll So see wave there's

we we have China as is forward you first see going capacity abreast there into we'll move of reopening. the for that's thing that on to I the is, now? market keep right And think demand

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

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

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

So time just as could in those points what we do. to estimates are

will think As to probably less to what I than little be we the across actually board that. we'll be a do, to able

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

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

as obviously, Yes. next costs with Got continuing just we around, down capacity of Can kind us CASM-Ex think able give a just be confidence into guess, cost And maintenance year. Obviously, about CASM and XXXX on digits? you differently of moving well? sense I the to low it. single Makes of sense. Dan, that Or level year. should next in then your being

the I in As middle process. planning our mentioned we're still earlier, of

certainly that about. elements industry on the maintenance, all regarding in the pieces the a that moving pieces coming right, are more spending these all capacity, we're and about things lot talked all along that, together, we've So the talked given with we time

a deal. planning earlier Yes. to of unlocks efficiencies of Dan's the this going the in And Maintenance is part enterprise. And comments about across the to the to right ability process. a we're pivot a that. the drive optimization be big is is middle maintenance

dodge question. So your to trying we're not

typical We of will give the start you, we can at what the do. the at time year, we think

Your next from coming question O'Brien from is Goldman Catherine Sachs.

on months windows ago I it's this called seen today into Ed, and corporate? across you the Could a And bit What maybe drivers in they're maybe pickup regions that COVID, CNBC or morning, from we pre anything longer it. revenue more? of little still bigger you or than Any out that a on Day corporate industries are bookings. or versus really since couple dig appreciate just board? have on volumes a corporate Labor booking

see Well, we we're Labor anticipated we that. that Day indeed, call said that seeing of corporate travel up. we'd on post the volumes And last pick

think tech services couple the of sector I financial seeing sector growth. mentioned is The that and areas double-digit a we're sectors. Glen

We have, see return. seeing back, comes board, I'd back of it think come And travel I and say it's corporate we're across And the plateaus, it's comes as then you'll another and increases. back plateaus. wave --

us into spectrum. getting themselves. But the see of I it's of patterns, healthy other the normal that many of on still are think distinguishing end some the out driven fare and office lot the the to for a between and of sorting which new the and being companies factors it's one are work by return it's to carriers

So one of revenues the many differentiating are. the enabling factors us we grow that to is pace at

on year-to-date trending air pickup ETL of year lot first traffic liability a maybe your know at last And Dan. kicked is year? the is booking in normalization that performance off to just I fourth we of the volume corporate Makes versus the this from any of Should quarter speak X, given of really build. you quarter aware how expectations year, just we be then versus start sense. into the seeing? you're with for impact the the windows Can strong

it's starting back maybe We're expected. a as we say I'd of performing get to No, more bit the traditional little to seasonality.

only go was third as we you up we what it fourth And restoring, quarter, you're saw through the of kind a little the that's wrapped look down as and were patterns, you bit if we quarter here. different. historical As mid-teens at into

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

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

corporate sort called any September What probably of from out think most had actors' automotive that sector on sort you in writers' and and actually sector strike. perspective. of do the with the couple to what I the that underperforming mean, at media you're you think of of month then I drag corporates, least now? a of the your right Glen, a were carrier indexed and maybe sectors seeing the

strike, That Los a in are of I'll curtailed strikes clearly, ongoing. production Angeles, from as Angeles significant with the start in entertainment that the amount insignificant Detroit. change Well, and now has well to and a as not which has the had business business the UAW travel Los

X revenues of sectors. accelerating. I'm As you is year, corporate we're of very in both out, what encouraged really total as to we look positives that still are about those despite that those things kind forward being point big should next our And

I to drag despite X and can we probably business think impacted So resolves But you both we those on back them, fairly right, here a on, are and hopefully, most quickly the by are that level. a those sectors. spot are being those get X normal

just release quick Ed. didn't the of still based fine? see still a trajectory everything the just you're then now, on and $X-plus but know a in for you're And the is number Great. reiteration one I mid-budget, that Dan XXXX. or seeing to I

our That's plan, Mike.

as I that gave as of XXXX, mentioned and long cash track. we in free guide that others December we're on and As

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

that more people any their maybe to question have, And evidence probably international trips. going data you been doing have flying domestic I'm have travelers on Glen, initial internationally based data Jamie's SkyMiles in often rare you or do mining ask different a kind way. in of first that XXXX, traditional

the truth with there that to data year. this or see been there's has internationally up to trying substitution any thesis people of back domestic if flying Just

very a it's a that's small clearly, day say volume because in seats every of question, But did volumes. the expansion such it been the be international. we about back travel those very domestically and Europe, track an number who not and to terms we you and I'd every total to fly domestically seats have people of domestic hard day to visits the have Well, think of there's incremental would of if broad piece differential of number between domestic

very short-haul leisure. general, diminishing has long-haul in And a of so seen clearly, we for have been robust the while spend not

we really Transpacific when kind the for that might when like of explosion That's And that like of least, can as Transatlantic maybe feels initial of comes been it. it flow-through be Is not be which with been looks say a demand helpful. year be? saw the of pricing the way XXXX potentially they a kind pent-up that quite that it and way demand there Got that. better you domestic initially in the has follow-up, has not great opened, any in profitability region, historical to better through might but think

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

quarter right year. I the up where pleased capacity next that's our -- and first the it most now, the where through be to demand sitting and we're we're and very think in is with So the Pacific, will in fourth

about enthusiastic very getting results we're there. we're and -- the so And

coming is from Barclays. next Your from Oglenski Brandon question

hub your called coastal Glen, of is diverging here like Cabin I maybe in know can domestically? to trends weakness talk revenue? out travel areas any there Main strength, corporate your but being up And you you've with

called products led pretty Main think, though, the Cabin. throughout out services. diverging by I with yes, premium we've been consistent, and is have trends recovery been Well, it's Those

inconsistent So that's between quarters. not

we're it's and lot about in Northeast driving terms York excited in of the in relatively coastal -- there. And We've the to things look premium 'XX. is as forward really particularly what we're think hub New the geographically, we've for 'XX. I investments actually New York, flat how -- of think and much is I in particular, looking momentum in that's to something we see made a

on with to next does the your FAA? in a outlook how JVs Okay. this And they as on with for international impact then changes the X Mexico the the year, Category growing move side,

do much the from we great you in Asia we the in and down the with couldn't about think factories business do we've past. and really sector see the XXXX. And Mexico all now, that's incredible of been from those Mexican we demand in into a really strength through continued what into Right. what strength Mexico, are year, we for And an has moving read onshoring last them. the Aeromexico and us These when strength to working robust with in business. think in Mexico, looking really source I press in seen things wanted and see you

with coordinating us see You them.

joint We have venture. ATI

continue working Mexico the markets to those So Atlanta to airports. them to very and gateway auto we've being as better, strength in we able where see been on with Detroit secondary serve including sector closely including work a to primary and and primary

Becker Helane Your next question is TD from coming Cowen. from

to Is Or process U.S. Just or you book avoid do on about visas, you going that are summer you on people need Atlantic, as how think especially next surprises? how to are reservation North -- as the citizens where respect follow-ups? to going trips? communicating -- be they thinking with that about the in travel to

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

Yes.

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

Okay, that's helpful.

And of guess, I lot in terms I -- but a in in the big was the of, it is ASMs other can't question that How the total actually market? total It's just that then exposure? had changes big Israel. be on to your

our point But October ranges worst-case a how there scenario. staying in we're much exposure of evolve kind not with we I inside very we're X through then is that ASMs. of but Israel reason give here saying an It's so it's so how know don't see included a we we this yet in The think is, fourth confident extended and can fluid. exact feel get what very our not quarter guide going will little number to revenue over included we'll And least is -- at of we're hit happens. the we've guidance

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

Jefferies. Your coming from is question last Sheila Kahyaoglu

wanted ask you I question. to And a

the leaning You curve made industry like. here the you're with leading pay into comment really about pilot cost the a and and

how the to about in report your you Delta and provide into question double-digit and comes, versus and moving carriers? if do other margin we today what think the want they'll maybe pieces Delta XXXX, low-cost QX maybe versus So carriers or that margins

'XX that that margins. our we our board labor guide the posting you new good Delta the market in those have Sheila, you we is look with at The all double-digit should at plan. gave across news our at X-year today of costs

they're the other carriers cost So their Delta negotiations, to future chasing extent increasing need to labor be cost. be just to going in the

our And look are we've is I all think trying their here, that pricing. conversion opportunity business not finding make we -- that of running sure something our better costs about a we at to as and we're as have of industry rates to make we're another incentives the talked same way into kind sure

opportunity I XX about longer Delta all utilization the talk ask previously ramping are or could if to XXX. I only said engines. more, could big you at visits right Sure. with don't And know running just I GTF TechOps Anything was No, XX that if TechOps. if sense. think you've the what is? lot and shop potentially a now. makes a talk us GTF Maybe engines Obviously, to Delta term you X about? give could asset for Delta on --

it baseline would overhauls in about Geared XXX, Talked Yes. at for the TechOps range. this be year, Turbofan XXX engine

and built that. to Pratt and medium- needs XXX to up related capacity have to longer-term discuss that long-term We capacity to -- with to -- take continue

only TechOps it as that heritage also Delta think about and of the at whether expertise Geared long the it rolls we the today being medium create optimistic great engine talked very term. this LEAP real over to the and we about positioning the it the a have that's position, and Turbofan, team, what in us not we be of that's key next-generation and platforms, our on as we whether multiples can about but that opportunities Day, So our have Investor all for set business relates

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

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

session be At questions. for Q&A time, we'll a media conducting this

coming [Operator Dawn is from question from Instructions] Your Street Wall first Gilbertson Journal.

and Ed, I the expect changing? color, more the if SkyMiles to announce or Glen, any changes back you us give could rolling you Ed to when you or on wonder be reaction the things might

of couple reassess the indicated -- rolled I Dawn, go changes the the mentioned changes. to respect out over needed that have that last same with the good weeks I've time, to we've rollout our from at qualification and certainly the publicly we're feedback we receiving had customers levels. too and back many new we planned for

are Delta, the to maintained intense is worked interview, there is this of to loyalty We've great. the it morning One to loyalty see. CNBC common heartwarming all the though, there's and things, I hard we build throughout this is is which brand The to that on X it. feedback. really mentioned

that continue have premium that. And to that continue the to in that will offer. build something of sees about maintain that. everyone most we that secondly, the also to has be no There everyone done assets to because that customers be We number of premium agrees should we question are excess

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

what's I on front. driving cancellations? to are I change have seeing you driving terms Okay. What of card the feedback X initial quick just or follow-up mean, are is on seeing your in sign-ups quick pretty just -- impact could reaction, and/or an you that credit I If plans? mean, this

I as Everything and It's in acquisitions agree in levels. think continues some is feedback. with not any seeing the stay trajectory them. Well, changes mentioned good or we're no, comments, -- seeing to intact, it, Glen, some on I this that his rather candidly, we're of of during spend it's change not feedback with

from question Sider coming Wall is Journal. Street from Your next Alison

cost There's projections loss at, about like recently something into at potential that started really the your drugs impact sort that anything that savings you like you factor of big weight all? look been fuel taking people some that? Is in or As numbers. analysis of Ozempic

Ali. we No, don't,

And then would a to be on ongoing also craft potential I asks flying those would activation? Delta Israel open I if openness, curious Israel? could any if follow this. of to or points I know the there's discussions government guess, there was government Or to flights. there kind to under of a on Israel flying evacuation But circumstances? the was I just with fly under Is you rather outside charter if up.

looking at any discussions, It's people Israel. to Europe. considered additional are providing don't have that out to But into no, There operate now, I've some unsafe plans Europe of lift we're as carrier we in be to airspace for indicated. Right to get currently. U.S. flying a

next Mary from Schlangenstein is coming Your from Bloomberg question News.

capacity redeploying waiver it other how the that ask to York in whether advantage in of because if capacity Delta that markets? controller wanted to slot start can the is continues you're airlines asked that the about expect into long And shortage, much Also significant you whether some term to to traffic talk of? have with taking impact? situation ongoing I air where real reduce of New congestion you the quickly, were

our on Well, that issues into order and believe, now. surrounding are help of waiver using LaGuardia entirety right the congestion in airspace thanks flights for out and the that to is, question. of XX% planning airports Kennedy we're with I the Yes, slot of which those

have trying So to do we're what is minimal impact.

We will markets. from individual any withdraw not

of of out some will But gauge now. shouldn't the that parts assets the put are redeployed for larger from summer. We up any be into different will get other our in. And than New York really it freed thin some frequencies. network We'll very

through extending the know, out, XX% rolled winter. which we summer, forward you and had that's it the As from that's just

So to today. you versus any won't see we're think, changes where dramatic schedule really, I sitting our

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

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

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

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

coming next from Leslie is Josephs Your question from CNBC.

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

Sure.

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

So the some some there's fare initiatives. also yes, at There's bottom discounting. end,

-- think a So stable quarter and between fluid we're it calling And very situation. very it's fourth quarter. third I right we're always now,

or... that discounting like there -- a XXXX to, And that a you're reference is the is or kind par like on with is of fares point that

are, above. Yes. are markets Certain markets certain

always a very in think 'XX, may where is below, I at end, general, the were So below but be -- the there fare they market they not There's really. basket not. in in they're is but market slightly a that bottom

time Matthew, please. X Leslie. final have for Thank question, we you,

David Slotnick last is from Your question TPG. from coming

it? reaction back Going the expecting were you surprised to of were what degree ]? [ the And you the stuff sort suppose of instead customer loyalty program, and of by that I

to by of make received very any certainly changes. way, we've were feedback not expecting the We the is us some positive and some encourages And feedback.

matter. X silent wasn't cohort on there that any the So was

to to to about be program full were clear have But program. modifications announced. it. that, about there on perspective. gives that changes will the some There it us the we're And that sit the I've modifications been We XXX view what reflect I going back, chance we points a to. very still of to a could make but make thought we

Do changes follow-up. that's a American impact access? lounge fall? to if going any And just revenue? to just that demand so, that, the the Express premium your think Was expecting card they with royalty will And potentially

American American with full of to knowledge, we've with so anything, we announced acquisitions. this seen back-and-forth did higher Express. we've if Express, this a we, did And it, since together premium course, shift card

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

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

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