Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Bank of America – Merrill Lynch Global Transportation Conference 2009
14 slides from Delta Air Lines's conference presentation, Jun 11, 2009
Slide 1: Delta Air Lines – Bank of America Merrill Lynch Global Transportation Conference
Delta Air Lines Ed Bastian, President Bank of America – Merrill Lynch Global Transportation Conference June 11, 2009
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 Delta s
Slide 3: Delta Strengths Unmatched In The Airline Industry
Delta Strengths Unmatched In The Airline Industry Uniquely positioned to weather current economic challenges Best-in-class unit cost structure Strong liquidity 1 • Diversified revenue stream from ancillary and third party sources Solid Financial Foundation 2 • Global network - #1 or #2 in all market
Slide 4: Delta's Fundamental Business Strength Is Solid
Delta’s Fundamental Business Strength Is Solid March Quarter 2009 Operating Cash Flow ($M) In the March quarter, Delta: March Quarter 2009 Operating Cash Flow ($M) • Delivered break-even results excluding fuel hedges and special items • Generated over $600 million in cash flow 643from operations and
Slide 5: Integration Of The Airlines Progressing Quickly
Integration Of The Airlines Progressing Quickly • $12 billion revenue JV launched with AF-KLM • Widebody cross-implemented routes Second Quarter 2009 Progress cross fleeting on key routes, such as ATL-Tokyo, DTW-London/Heathrow • Domestic and international onboard food and amenities harmonized Key M
Slide 6: On Track To Achieve $2 Billion In Merger Synergies
On Track To Achieve $2 Billion In Merger Synergies Reviewing all opportunities to accelerate benefits $2.0B $1 6B g pp Merger Synergy Targets 1.6B $1.1B $ Cost 0.5B 2009 2010 2011 2012 Revenue 2009 2010 2011 and Beyond Drivers of benefit: • New AmEx agreement • Fee Alignment • Air France joint ventu
Slide 7: JV Reinforces Transatlantic Leadership Position
JV Reinforces Transatlantic Leadership Position Scale is unmatched: • ~25% transatlantic capacity • Leading European hubs – CDG, AMS – provide most robust beyond network • Largest frequent flier customer base Partnership is deeply integrated: • Full profit sharing aligns economic interest • Anti-tru
Slide 8: The Airline Industry Is Dealing With A Challenging Revenue Environment
The Airline Industry Is Dealing With A Challenging Revenue Environment• Significant reduction in premium class demand • Aggressive sale activity Industry Revenue (% Chg YoY) 15% 20% 25% • Weaker booking class and cabin mix • Tough YoY comparisons – fuel surcharges and foreign exchange rates • H1N1 v
Slide 9: Fuel Prices Rising But Still Lower Than Last Year
Fuel Prices Rising But Still Lower Than Last Year • While crude oil prices are up more than 50% since the end of 2008, jet fuel is up only 20% due to the collapse in the refining spread $2.00 Jet fuel price/gallon: 6/5/09 - $1.78 2008 avg. - $2.95 $1.50 Jet fuel pri ce per gallon $0.50 $1.00 Crude o
Slide 10: Out-of-Money Fuel Hedges Largely Roll Off By End Of June Quarter
Out-of-Money Fuel Hedges Largely Roll Off By End Of June Quarter% of Fuel Consumption Hedged 75% Call options 52% Swaps 36% 2Q09 3Q09 4Q09 Collars Projected fuel price/gallon $2.04 $2.17 $2.05 gallon $0 35 $0 13 $0 01 9 Hedge loss/included in projected price 0.35 0.13 0.01
Slide 11: Key Actions to Preserve Liquidity In Tough Climate
Key Actions to Preserve Liquidity In Tough Climate Rationalizing Capacity • 10% YoY system capacity reduction starting September • 15% international (transatlantic down 20%) • 6% domestic • Aligning staffing levels – down 8,000+ Maximizing Profit Opportunities • Capitalizing on ancillary revenue – f
Slide 12: June Quarter Expectations
June Quarter Expectations June quarter 2009 Current projection April 21 Guidance Operating margin 0 – 2% 4 – 6% Fuel price $2.04 $2.08 Total liquidity $5.3 billion $5.6 billion June quarter 2009 vs. June quarter 2008 Passenger unit revenue Down ~20% Total unit revenue1 Down ~16% Mainline non-fuel un
Slide 13: Delta Is Well Positioned For Long-Term Success
Delta Is Well Positioned For Long-Term Success • Diverse, global network producing unit revenue premium • Air France/KLM JV reinforces transatlantic Leading Global Network leadership position Solid Financial • Commitment to maintaining best-in-class unit Costs Foundation • Focused on preserving soli
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Note: The following tables show reconciliations of non-GAAP financial measures. The reasons Delta uses these measures are described below. Delta completed its merger with Northwest Airlines on October 29, 2008. Accordingly, Delta’s financial results under Generally Accepted
Delta Air Lines — Bank of America – Merrill Lynch Global Transportation Conference 2009 on 6ix