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Nonfuel CASM was 1.5% above last year and ahead of guidance. Fuel prices averaged $2.76 per gallon, $0.16 higher than the midpoint of our guidance range. The refinery provided a $0.05 benefit generating a profit of $49 million. This was down $173 million from last year on more normalized refining margins. Fuel efficiency was 1.9% better than last year, benefiting from the continued renewal of our fleet and running a strong operation.
non fuel casm v goiod at 1.5% vs 3% guide
Transcript
2024 Q1
11 Apr 24
Premium revenue was up 10% over prior year, and we have runway ahead as we continue adding more premium seats to our
premium up 10%
Transcript
2024 Q1
11 Apr 24
Okay. And then maybe one on cost, just to sum it up, Q1 CASM performance was really good, Ed, and you talked about completion factors and just operations helping that.
So the Q2 guide seems a bit more normalized, putting you guys at 2% cost growth.
So is it just fair to think about that run rate in the context of the year with a low single-digit guide? And what are the moving pieces as we think about headcount, maintenance costs and any other noise you've highlighted throughout the year?
Daniel Janki
Yes.
I think the 2% is in line with the low single digit.
I think when you think about the variables inside of that run -- it starts with running a great operation. When you run a great operation that sets the foundation.
You get those frictional costs out, and it really allows the operators, and you're seeing it in 2 quarters in a row to have the confidence and really [indiscernible] continue to drive not only better improvement in the operation, but also get after those efficiencies.
And as you do that, we said that we're carrying headcount higher than historical for what we ran in 2019, about 10%, and we'll grow into that, and that drives the efficiency associated with that and no change to maintenance. Maintenance is as we expected. But we'll continue to manage the supply chain. It's going to be the one that is -- has the largest constraint still associated with it as we execute through the year.
non fuel casm
Transcript
2024 Q1
11 Apr 24
So premium revenue was up 10% in the quarter, main Cabin was up 4%. What can you tell us about the constitution of that 4%? For example, what's the trend with basic economy? What percent of main cabin passengers are SkyMiles members compared to the premium cabins, that sort of thing? I'm just trying to understand where the 4% is coming from. Are those new customers? Are you taking share from discounters? That sort of thing.
Glen W. Hauenstein
I think in the quarter, we ran a record domestic load factor in the first quarter.
So what I believe drove that was the incremental traffic that we took over historical levels.
So pretty excited about doing that in the first quarter.
As you know, the first quarter is the most challenging in terms of loads. And for us to come through that quarter with the premiums that we took, I think, really is a testament to the strength of our brand. And of course, as we get through the year, there'll be less and less discounted seats available as you get towards peak. But generally, we're most open in 1Q
main cabin up 4%, premium rev up 10%
Transcript
2024 Q1
11 Apr 24
But as the fleet continues to evolve and we continue to put more premium seats in the mix, we believe that is one of the key drivers for us to continue to accelerate our relative performance to our industry peers.
more premium seats
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2024 Q1
11 Apr 24
Well, generally, the Olympics are not good for airline revenues. And this year, I think, is no exception to that.
So while we see a very favorable backdrop for Europe in its totality, there are some challenges for Paris as generally business travel ceases to and from the local markets as the Olympics approach.
So I wouldn't say that, that's going to be a windfall. It's actually going to be a bit of a headwind for us in the numbers we've shared with you.
olympics not good for airlines
Transcript
2024 Q1
11 Apr 24
Nonfuel unit costs are expected to be approximately 2% higher than last year, consistent with our full year outlook of low single digit. G
non fuel cysts rising
Transcript
2024 Q1
11 Apr 24
During the quarter, we repaid $700 million of debt, including $400 million of scheduled maturities and $300 million of additional debt initiatives.
We expect to repay at least $4 billion of debt this year and continue to be opportunistic in accelerating debt reduction.
We are currently investment-grade rated at Moody's and BB+ at both S&P and Fitch, with all agencies now on positive outlook following updates from Fitch and Moody's during the quarter.
dent repaument 700m and 4bn planned for 2024
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2024 Q1
11 Apr 24
For the June quarter, we expect revenue growth of 5% to 7% on capacity growth of 6% to 7% with unit revenues flat to down 2% from last year's very strong performance. Similar to the March quarter, 2Q faces a headwind from the normalization of travel credits.
unit rev flart to dowm 2%, but 5-7% rev gropwtrhg in 6-7 capacity growth
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2024 Q1
11 Apr 24
ollowing the refresh co-brand benefits, we saw card applications reach new records as we are seeing the highest premium acquisition mix in our program's history.
card applicayions at highs
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2024 Q1
11 Apr 24
Total loyalty revenue grew 12% on continued strength in the American Express co-brand portfolio with record quarterly remuneration of $1.7 billion.
amex remunwration at record
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2024 Q1
11 Apr 24
Managed corporate travel sales grew 14% over the prior year with technology, consumer services and financial services leading that momentum
corp travel
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2024 Q1
11 Apr 24
this may be the most constructive backdrop that I've seen in my airline career.
"most constructuve"
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2024 Q1
11 Apr 24
Turning to our outlook with strong first quarter performance and visibility into the strength of summer travel demand, we remain confident in our full year guidance for earnings of $6 to $7 per share, free cash flow of $3 billion to $4 billion and leverage of 2.5x., the 3 main guideposts that we shared with you in January.
For the June quarter, we expect to deliver the highest quarterly revenue in our history of mid-teens operating margin and earnings of $2.20 to $2.50 per share.
maintained FY guidance
Transcript
2024 Q1
11 Apr 24
% higher and a new record for first quarter. Free cash flow was $1.4 billion, and we delivered a return on invested capital of nearly 14%, putting Delta's returns in the top half of the S&P 500.
high end of guidancde as anticipated
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2024 Q1
11 Apr 24
Second, growing revenue diversification through high-margin sources remains an important differentiator for Delta.
We have runway ahead as we continue adding more premium seats to our aircraft further improve our retail capabilities and expand loyalty revenues and travel adjacent services.
We expect American Express remuneration to grow 10% over 2023 levels.
high mgn revenue and amex
Transcript
2023 Q4
25 Mar 24
Diversified revenue streams, including premium and loyalty generated 55% of revenue, reflecting Delta's differentiated strategy. Premium led all year with record paid load factors and yield growth outpacing main cabin.
premium details
Transcript
2023 Q4
25 Mar 24
We are seeing continued improvement in the corporate sector, and we had a number of number of laggards, tech being, by far, the largest in terms of that had essentially not returned to travel. And we're finally starting to see tech companies traveling again. And again, I think a lot of it is to turn to office that is driving some of that the consultancies as well, which have also been laggards. Again, given their clients have had their offices somewhat reduced office hours opening is helping there and we've seen it across the board.
The other thing I mentioned this morning also was the auto and entertainment sectors have rebounded nicely, entertainment clearly and auto is starting to rebound following the strikes in the Fourth Quarter.
corp improvement
Transcript
2023 Q4
14 Jan 24
remium consumer trends remain strong and spending on travel experiences continues to outpace overall GDP by 2 to 3 points.
We expect solid growth in business demand with nearly 95% of respondents in our recent corporate survey expecting to travel as much or more in 1Q than 4Q. This is a double-digit improvement in travel intentions from our last survey.
Our commercial strategy in 24 builds on Delta's competitive advantages by optimizing our network growing high margin revenue streams and investing in our future.
premium remains srtring , corp good
Transcript
2023 Q4
14 Jan 24
For the March quarter, we expect earnings of $0.25 to $0.50 per share on approximately 5% operating margin.
We expect March quarter fuel price to be $2.50 to $2.70 per gallon with a $0.05 to $0.10 refinery benefit. The refinery profit is expected to be down more than $130 million from last year due to elevated crack spreads in early 2023.
For the full year, we expect to deliver earnings of $6 to $7 per share. With our reduced outlook for capacity growth, we expect full year nonfuel unit cost to be up low single digit over 2023 with the March quarter unit costs up approximately 3%. The last 2 years were a period of intense restoration with unnatural high growth to rebuild our network. Growth is normalizing, and we've entered a period of optimization. With a focus on restoring our most profitable core hubs and delivering efficiency gains across the enterprise. The intensity of hiring and training has moderated. And investment in reliability are beginning to pay off with continued improvement in operational performance.
cASM up 3% for FY 24
Transcript
2023 Q4
14 Jan 24