Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — J.P. Morgan Aviation, Transportation and Defense Conference 2013
19 slides from Delta Air Lines's conference presentation, Mar 4, 2013
Slide 1: Delta: Building on Our Success
Delta: Building on Our Success J.P. Morgan Aviation, Transportation and Defense Conference March 4, 2013
Slide 2: Safe Harbor
This presentation contains various projections and other forward - looking statements which represent Delta’s estimates or expectations regarding future events. All forward - looking statements involve a number of assumptions, risks and uncertainties, many of which are beyond Delta’s control, that c
Slide 3: Building on Our Success
Building on Our Success • Building on 2012’s financial momentum to grow earnings and expand margins in 2013 • On track to achieve Delta’s best March quarter since 2000 • Investments in network, operations, product and people driving revenue growth and corporate share gains • Structural cost initiati
Slide 4: The Leader In An Improving Industry
The Leader In An Improving Industry Pre - Tax Margin 4.3% 4.0% 1.6% 4.0% 4.2% (0.5%) 2012 Pre - Tax Income ($M) Note: All results exclude special items . 2012 Highlights: • Generated $1.6B net income, an increase of 30% from 2011 • Grew unit revenues 7% and unit revenue improvement outpaced the indu
Slide 5: Momentum Continues In March Quarter
Momentum Continues In March Quarter March quarter 2013 Operating margin 2.5 – 3.5% Fuel price, including taxes and settled hedges $3.23 - $3.28 March quarter 2013 vs. March quarter 2012 Passenger unit revenue Up 4.5 – 5.5% Consolidated ex - fuel unit cost Up 6 – 7% System capacity Down 2 – 3% Foreca
Slide 6: Delta Is Taking a Different Approach
Delta Is Taking a Different Approach All stakeholders need to share in our success to break the industry’s historical pattern 6 Employees • Best employee relations in the industry Customers • Continued benefits from investments in product, service, technology and operations Shareholders • 4 th conse
Slide 7: Focus on Free Cash Flow
Focus on Free Cash Flow 2.6 3.8 4.1 4.8 4.1 2.9 1.8 1.3 1.2 0.9 2.1 2.6 1.2 1.3 1.3 2.0 2.2 $(2.0) $(1.0) $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Est* $ Billions Capex Operating Cash Flow Historical Capital Spending and Op
Slide 8: Investing in the Business and Operational Reliability
Investing in the Business …and Operational Reliability 8 Investing in Network, Product and Facilities….. • Onboard: – Launch of Economy Comfort – Flat bed seats on 85% of international aircraft by end of 2013 – Wi - Fi on all two - class aircraft – Personal on - demand entertainment • Facilities: –
Slide 9: Generating a Revenue Premium To The Industry
14.5 % 13% 13% 11% 6% 8% 4.5 % 4% 0.5% 5.5 % 2.5% 4% 5.5% 5% 9% 5% 7% 8% 4% 5% 2% 1% - 1% 2% - 1% 1% 2.5% Jan-12 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-13 Feb Delta A4A Excl DAL Generating a Revenue Premium To The Industry Delta has a network, product and operation that customers are willin
Slide 10: Making Solid Inroads With Corporate Customers
Making Solid Inroads With Corporate Customers Corporate revenues increased by 8% in February, despite 5% decrease in capacity A diverse base of corporate customers…. …and strong gains in corporate revenue Leading customer satisfaction with business travelers… …producing strong gains in corporate rev
Slide 11: Innovative Joint Loyalty Program With Starwood
Innovative Joint Loyalty Program With Starwood “Crossover Rewards” creates an opportunity to reward both companies’ best customers and establishes a strong value proposition for attracting new high value customers Industry - Leading Partnership Brings Together Two Great Brands – Starwood was recentl
Slide 12: Winning in New York
Winning in New York Improving Delta’s position in the largest aviation market in the United States 2009 2010 2011 2012 +7.3 pts New York Corporate Share • Network and product improvements already generating substantial improvements in New York performance − 2012 New York profit margin up 3 points fr
Slide 13: Expanding Network Through Investment In Virgin Atlantic
Expanding Network Through Investment In Virgin Atlantic Acquiring 49% of Virgin Atlantic provides unique opportunity to increase Heathrow presence • Joint venture with Virgin Atlantic is the answer for acquiring the scale needed to compete effectively in Heathrow − Combined network has 23 daily roun
Slide 14: Cost Control Key To Margin Expansion
1H13 2H13 Longer term Cost Control Key To Margin Expansion $1 billion structural cost initiatives designed to stabilize cost trends and pave the way for margin expansion in 2013 and beyond • Non - fuel unit costs expected to grow 3 - 5% for 2013 • Cost growth expected to peak in 1H13 and stabilize b
Slide 15: Domestic Fleet Restructuring
Domestic Fleet Restructuring Upgauging domestic fleet to improve revenue generation and more efficiently produce capacity Domestic Fleet Count • Reducing 50 - seat fleet by more than 200 aircraft by 2015 • Two - class RJs have both higher RASM and lower CASM compared to 50 - seat jets • Average gaug
Slide 16: Managing Fuel Expense to Reduce Risk
Unique approach to Delta’s number one input cost • Trainer expected to generate break - even results in its first full quarter of operation • Investigating opportunities for new crude supplies that allow Delta, not the refiners, to benefit from input cost savings − First shipment of Bakken crude rec
Slide 17: Solid Progress on Debt Reduction
Solid Progress on Debt Reduction …Producing Interest Savings and Enhanced Flexibility $ 17.0 B 3/31/13 $ 11.3 B $ 10.0 B Debt reduction program has improved the balance sheet and reduced interest expense 2009 2013 Over $5 Billion Reduction in Adjusted Net Debt… $1.3B $850M $750M 2009 2013 At Target
Slide 18: Building on Our Success
Building on Our Success • Building on 2012’s financial momentum to grow earnings and expand margins in 2013 • On track to achieve Delta’s best March quarter since 2000 • Investments in network, operations, product and people driving revenue growth and corporate share gains • Structural cost initiati
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Delta sometimes uses information that is derived from our Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Certain of this information is considered “non-GAAP financial measures”
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