Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Investor Presentation (June 2010)
17 slides from Delta Air Lines's investor presentation, Jun 15, 2010
Slide 1: Delta: A Solid Flight Plan
Delta: A Solid Flight Plan Ed Bastian, President June 15, 2010
Slide 2: Safe Harbor
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
Slide 3: Strong financial performance, well positioned for 2010
Strong financial performance Well positioned for 2010 Creating a financially successful airline for the long term March quarter results marked by strong cash generation and significant year over year improvement in financial performance Delta’s improving revenues, low cost structure, strong free cas
Slide 4: Delta's Fundamental Business Strength Is Solid
Delta’s Fundamental Business Strength Is Solid LTM March Quarter 2010 EBITDAR ($M) In the March quarter, Delta: Generated $1 billion in cash flow from operations and $600 million in free cash flow Increased unit revenues 8%, the first quarterly increase since 4Q08 Maintained best-in-class cost struc
Slide 5: Delta Is Well Positioned For 2010
Delta Is Well Positioned For 2010 Improved revenue generation Costs under control Merger synergies Revenue recovery underway, with unit revenues approaching 2008 levels Corporate revenues continue to gain momentum Improving margins by increasing fleet efficiency Merger synergies and productivity off
Slide 6: Passenger Revenues Showing Improvement
Passenger Revenues Showing Improvement June Quarter 2010 RASM 20% higher than last year Delta Passenger Unit Revenue % Change versus Prior Year
Slide 7: Corporate Sales Trends Improving
Corporate Sales Trends Improving Delta Corporate Revenue Trends % Change versus Prior Year
Slide 8: Improving Margins Through More Efficient Revenue Production
Improving Margins Through More Efficient Revenue Production Fleet moves expected to generate $300 million in operating cost savings Fleet optimization as a result of the merger allows Delta to keep 2010 capacity flat with 91 fewer aircraft $300 million annual operating cost savings from lower aircra
Slide 9: Improving Our Revenue Advantage
Improving Our Revenue Advantage Merger synergies Targeted market initiatives Expanding global alliances Single technology, single operating certificate and integrated revenue management systems unlock synergies Further improvements to corporate and agency sales contracts Grow in critical New York ma
Slide 10: Best-In-Class Cost Structure Is A Key Strength
Best-In-Class Cost Structure Is A Key Strength Delta has an 10% cost advantage compared to network peers Delta plans to keep consolidated and mainline ex-fuel CASM flat for 2010 through: Improved fleet utilization and increased gauge Accelerating merger synergies Divisional productivity March 2010 Q
Slide 11: Hedges Reduce Fuel Price Volatility
Hedges Reduce Fuel Price Volatility Call options allow for downside price participation but protect against upward cost pressures Percentage of Fuel Consumption Hedged Call options swaps collars Avg. Crude Call Projected fuel price Downside Participation 51% 50% 48% 49% 73 82 83 77 2.32 2.33 2.38 2.
Slide 12: Integration Of The Airlines Substantially Complete
Integration Of The Airlines Substantially Complete On track to hit full synergy run-rate by 2011 Merger Accomplishments $1 billion annual run-rate synergies achieved Single operating certificate received Reservations system integrated Single revenue management system Frequent flyer programs integrat
Slide 13: Investing in Customer Experience, Not Re-Fleeting
Investing in Customer Experience, Not Re-Fleeting Operating cash funds three year, $1 billion total investment All international widebody aircraft to have full flat-bed seats in BusinessElite Expanding in-seat audio and video on demand for customers on all wide-body aircraft Adding First Class cabin
Slide 14: Free Cash Flow Will Allow Balance Sheet Delevering
Free Cash Flow Will Allow Balance Sheet Delevering Strong operating cash flow, coupled with minimal capital requirements Total Three Year Projection 2010 – 2012 Operating Cash Flow Capital Expenditures Free Cash Flow Adjusted Net Debt ($B) Business will generate $700 million of free cash flow in Jun
Slide 15: Higher Revenue, Lower Fuel Driving Improved June Quarter Expectations
Higher Revenue, Lower Fuel Driving Improved June Quarter Expectations June quarter estimate April 20 guidance Operating margin EBITDAR Fuel price Total unrestricted liquidity June quarter 2010 vs. June quarter 2009 Passenger unit revenue Consolidated ex-fuel unit cost Mainline ex-fuel unit cost Syst
Slide 16: Progress Being Made … More Work To Do
Progress Being Made … More Work To Do Encouraged with ability to withstand economic headwinds, but improvements remain to achieve our shareholder return goals 10 – 12% operating margin Minimal capital reinvestment requirements Minimal capital reinvestment requirements Delever the balance sheet Gener
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures We sometimes use 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” und