Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Debt Investor Presentation (September 2020)
19 slides from Delta Air Lines's debt investor presentation, Sep 14, 2020
Slide 1: Delta Air Lines SkyMiles Investor Presentation
Delta Air Lines SkyMiles Investor Presentation September 14, 2020 Exhibit 99.1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Forward-Looking Statements Statements in this Presentation that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections or strategies for the future may be “forward-looking statements” as defined in the Privat
Slide 3: Executive Summary
Executive Summary Delta was the world’s largest airline by total revenues in 2019 and the most profitable with five consecutive years of $5 billion or more in pre-tax income from 2015 through 2019 SkyMiles is Delta’s customer loyalty program and a key asset for the airline in driving strong customer
Slide 4: Highlights
SkyMiles Highlights SkyMiles builds customer loyalty by offering awards, benefits and services to program participants. Members in this program earn miles for flights on Delta and other participating airlines as well as through the purchase of goods and services from non-airline partners such as cre
Slide 5: Delta's SkyMiles Loyalty Program
Delta’s SkyMiles Loyalty Program Delta’s SkyMiles loyalty program established itself as a global leader in loyalty from inception in 1981 Established: 1981 # of Members: 100M+ Destinations: 1,000+ Average Tenure of Medallion Members¹: 16yrs Airlines Partners: 25+ Non-Airline Partners: 40+ ¹ Medallio
Slide 6: SkyMiles Pricing and Cash Flow Mechanics
Delta1 3rd Party Redemption Partners SkyMiles Program Co-Brand / Accrual Partners $ Purchase of Miles Redemption of Miles SkyMiles Pricing and Cash Flow Mechanics To be created. Pro forma for financing transaction. $ Redemption of Miles Purchase of Miles Monthly / quarterly purchase of miles Amex co
Slide 7: Miles Sales and Redemption Overview
SkyMiles Miles Sales and Redemption Overview Miles Redeemed Miles Sold ¹ Reflects structure created for transaction. ² Pro forma for transaction. SkyMiles manages mileage earning program and redemption activity Delta pays SMIP for each mile earned by Members¹ SkyTeam and other partner airlines pay f
Slide 8: Strong Partnership Between SkyMiles and Amex Drives Robust Revenues
Strong Partnership Between SkyMiles and Amex Drives Robust Revenues Amex Contribution to Delta Amex is SkyMiles’ largest partner with over $4 billion in contribution to Delta in 2019 Delta and Amex are two strong consumer brands with a long-term partnership that has existed since 1996 Early renewal
Slide 9: History of Delta-Amex Partnership
History of Delta-Amex Partnership 1991 Delta partners with Amex to participate in the Membership Rewards Program Strong and mutually beneficial partnership dating almost 30 years 1996 Delta and Amex joined forces to launch the co-branded Delta SkyMiles Credit Card 2019 Delta and Amex extend partners
Slide 10: Delta SkyMiles Amex Cards
Delta SkyMiles Amex Cards Delta Blue Delta Gold Delta Platinum Delta Reserve Annual Fee $0 $0 first year, then $99 $250 $550 Acquisition Offer 10K miles w/ $500 spend 35K miles w/ $1K spend 40K miles & 5K MQMs w/ $2K spend + $100 Statement Credit w/ a Delta purchase 40K miles & 10K MQMs w/ $3K spend
Slide 11: Key Credit Strengths
SkyMiles is core to Delta and contributes to Delta’s industry-leading revenue premium SkyMiles contributes to Delta’s customer loyalty and consistent customer engagement SkyMiles enables retention of premium travelers SkyMiles has an extensive network of longstanding partner relationships, allowing
Slide 12: SkyMiles is Core to Delta, Contributing to Delta's Revenue Premium
SkyMiles is Core to Delta, Contributing to Delta’s Revenue Premium 1 SkyMiles Members % of Ticket Revenue Ticket Revenue Premium to Delta In 2019, SkyMiles Members contributed 60%+ of Delta’s ticket revenue with premiums reaching 1.5x higher for Medallion Members¹ than non-SkyMiles Members In 2019,
Slide 13: Contributes to Delta's Customer Loyalty and Consistent Customer Engagement
SkyMiles Contributes to Delta’s Customer Loyalty and Consistent Customer Engagement 2 ACQUIRE Attracting young travelers provides a lifetime pipeline of premium revenue Acquisitions have grown 138% from 2015 to 2019 68% of Members reside in non-hub cities ENGAGE Creating an attractive virtuous life-
Slide 14: Enables Retention of Premium Travelers
SkyMiles Enables Retention of Premium Travelers Attracting the right loyal travelers into our SkyMiles Program provides Delta an opportunity to create a multi-year pipeline of premium revenue Age Demographics Program Tenure Annual Income 3 Member Geography Note: All figures as of year-end 2019. Non-
Slide 15: Has an Extensive Network of Longstanding Partner Relationships
SkyMiles Has an Extensive Network of Longstanding Partner Relationships 4 Accom. Cars Retail & Other Intern’tl Co-Brands Powered by Hotels.com Co-Brands Non-Air Partnerships¹ Air Partnerships Latin America Asia Europe, Africa, ME Strategic and focused partnerships allow Members to earn miles with 69
Slide 16: Significant Diversity of Cash Flows with Stable and Growing Performance
SkyMiles Offers Significant Diversity of Cash Flows with a Long-Term Track Record of Stable and Growing Performance through Cycles 5 Delta-Amex entered into the following pre-paid miles transactions since 2008: $1 billion pre-purchase of miles by Amex in 2008, which amortized in 2012-2014 $675 milli
Slide 17: Attractive Business Model Allowing Flexibility to Control Costs
SkyMiles Has an Attractive Business Model Allowing Flexibility to Control Costs and Preserve Margins 6 SkyMiles Flexibility In 2019, 97% of redemptions were on Delta allowing the flexibility to manage costs by modifying inventory levels and value SkyMiles can adjust the redemption value of miles bas
Slide 18: Summary Financial Profile
SkyMiles Summary Financial Profile Note: Amounts may not calculate due to rounding. Amounts represent SMHL Unaudited Pro Forma Consolidated Financial Information.
Slide 19: Recent Performance Commentary
Recent Performance Commentary Performance Since COVID-19 Outbreak While customer traffic has declined, SkyMiles members remain engaged as they continue to earn miles via their co-branded credit cards Amex sales have not declined at the same rate as the airline, leading to strong cash flow performanc
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