Delta Air Lines, Inc. · NYSE:DAL
Delta Air Lines — Bank of America Merrill Lynch 2012 Global Transportation Conference
15 slides from Delta Air Lines's conference presentation, May 17, 2012
Slide 1: Delta: Keep Climbing
Delta: Keep Climbing Bank of America Merrill Lynch 2012 Global Transportation Conference May 17, 2012
Slide 2: Safe Harbor
2 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
Slide 3: Delta: Keep Climbing
3 Delta: Keep Climbing Solid business momentum Durable business model offsetting fuel challenge Building for long - term success Creating a solid franchise that generates strong margins and cash flow, provides for debt reduction and investment for the future Successfully offset $3 billion fuel incre
Slide 4: Solid Revenue Momentum
Solid Revenue Momentum 4 Revenue growth driven by corporate contract gains, the benefit of our product investments and a continued solid demand environment Passenger Unit Revenue Change vs. Prior Year 7.0% 11.0% 13.0%13.0% 14.5% 13.0% 14.5% 10.0% 13.0% 11.5% 8.0% Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 D
Slide 5: Strong Corporate Revenue Growth Driving RASM Gains
Strong Corporate Revenue Growth Driving RASM Gains Largest Corporate Sectors Leading Revenue Growth Year - to - date corporate booked revenues up 12% despite 3% capacity reduction 5 12% 17% 2% 13% 15% 9% 8% 13% 11% 10% 12% 16% Total Other Defense Banking Business Services Energy Transportation Autom
Slide 6: Operational Performance at Historic Highs
6 Operational Performance at Historic Highs Making Delta an airline customers prefer Completion factor up 3 points 96.8% 99.6% 1Q11 1Q12 80.0% 87.3% 1Q11 1Q12 3.19 2.21 1Q11 1Q12 7 point improvement in on - time arrival rate 31% reduction in mishandled bags (rate per 10,000) 1.47 0.72 1Q11 1Q12 Cust
Slide 7: Revenue and Operating Momentum Driving Results
219 63 43 10 (176) (78) 7 Revenue and Operating Momentum Driving Results March Quarter 2012 Operating Income ($M) March Quarter Highlights: • Increased unit revenues by 14% and generated a unit revenue premium to the industry • Pre - tax income up $355 million despite $250 million of higher fuel exp
Slide 8: Building a Durable Business Model
Grow Unit Revenues Improve Productivity Invest in the Business Delever the Balance Sheet Building a Durable Business Model Grow passenger and ancillary unit revenues through capacity discipline, corporate revenue gains, merchandising initiatives, and running a great and reliable operation Focus on t
Slide 9: Proactive Approach To Capacity Changes
Proactive Approach To 4 th Quarter Capacity 9 Changes to drive incremental 1% reduction to full year 2012 capacity Strong summer demand across regions but proactively reducing December quarter capacity Strong Summer Demand Favorable Capacity Trends Proactive Approach To Managing Capacity • Strong su
Slide 10: Winning in New York
Winning in New York Expanded schedule in New York and upgraded facilities in JFK and LGA position Delta as the airline of choice for the high value New York market 0.7 9.8 19.4 19.5 37.4 39.9 New York Area Domestic Daily Seat Departures (thousands) Source: OAG Sept. 2012 schedule for LGA, JFK and EW
Slide 11: Revenue Growth from Expanded Product Offerings
Revenue Growth from Expanded Product Offerings A quality base product with an expanded range of offerings from which to choose to enhance customer experience $1 Billion of incremental revenue by 2013 Differentiated bundles of new products and services customers want – and will pay for. Leverage Delt
Slide 12: Structural Initiatives to Reduce Both Fuel and Non-Fuel Unit Costs
3.14 3.78 1.22 8.53 8.28 0.41 2009 2011 12 Structural Initiatives to Reduce Both Fuel and Non - Fuel Unit Costs Delta Unit Costs 73% 10% 1% CAGR Non - fuel costs Crude Crack spread Note: Unit costs exclude special items and mark to market adjustments on fuel hedges • Fuel costs represent the fastest
Slide 13: Refinery is a Unique Opportunity to Reduce Fuel Expense
13 Refinery is a Unique Opportunity to Reduce Fuel Expense Trainer acquisition expected to save Delta $300M per year 13 Addresses Increasing Jet Fuel Risk Leverages Expertise of Strategic Partners Delivers Solid Financial Benefits • Jet fuel prices have risen significantly with limited offset from f
Slide 14: Derisking the Business through Debt Reduction
Derisking the Business through Debt Reduction Solid Progress On Debt Reduction… $17B 6/30/12 $11.8B $10B 14 On track to achieve $10 billion adjusted net debt target in the next 12 months $1.3B $1.0 B $0.8 2009 2012 At Target …Producing Interest Expense Savings and Enhanced Flexibility 2009 Mid - 201
Slide 15: Non-GAAP Financial Measures
15 Delta: Keep Climbing Solid business momentum Durable business model offsetting fuel challenge Building for long - term success Creating a solid franchise that generates strong margins and cash flow, provides for debt reduction and investment for the future Successfully offset $3 billion fuel incr
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