UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


Or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-5424

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)


Delaware						58-0218548
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Post Office Box 20706
Atlanta, Georgia						30320-6001
(Address of principal executive offices)						(Zip Code)

Registrant's telephone number, including area code: (404) 715-2600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

DAL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares outstanding by each class of common stock, as of ~~September~~June 30, ~~2022:~~2023:

Common Stock, $0.0001 par value - ~~641,188,362~~643,418,375 shares outstanding

This document is also available through our website at http://ir.delta.com/.

Forward Looking Statements

Unless otherwise indicated or the context otherwise requires, the terms "Delta," "we," "us" and "our" refer to Delta Air Lines, Inc. and its subsidiaries.

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to Delta are described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 ("Form 10-K"), other than risks that could apply to any issuer or offering. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Delta Air Lines, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of ~~September~~June 30, ~~2022,~~2023, the related condensed consolidated statements of operations and comprehensive ~~income~~income/(loss) and consolidated statements of stockholders' equity for the three-month and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021, the~~2022, condensed consolidated statements of cash flows for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022, and the related notes (collectively referred to as the "condensed consolidated interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2021,~~2022, the related consolidated statements of operations, comprehensive income/(loss), cash flows, and stockholders' equity for the year then ended, and the related notes (not presented herein); and in our report dated February ~~11, 2022,~~10, 2023, we expressed an unqualified audit opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2021,~~2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


			/s/ Ernst & Young LLP
Atlanta, Georgia
~~October~~July 13, ~~2022~~2023

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2

Financial Statements

DELTA AIR LINES, INC.

Consolidated Balance Sheets

(Unaudited)


(in millions, except share data)	(in millions, except share data)	September 30, 2022		December 31, 2021		(in millions, except share data)	June 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	7,023	$	7,933	Cash and cash equivalents	$	2,668	$	3,266
Short-term investments	Short-term investments	1,345		3,386		Short-term investments	3,368		3,268
Accounts receivable, net of allowance for uncollectible accounts of $24 and $50		3,097		2,404
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $150 and $176		1,473		1,098
Accounts receivable, net of allowance for uncollectible accounts of $23 and $23						Accounts receivable, net of allowance for uncollectible accounts of $23 and $23	3,122		3,176
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $126 and $136						Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $126 and $136	1,438		1,424
Prepaid expenses and other	Prepaid expenses and other	1,861		1,119		Prepaid expenses and other	2,484		1,877
Total current assets	Total current assets	14,799		15,940		Total current assets	13,080		13,011

Noncurrent Assets:	Noncurrent Assets:					Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $19,984 and $18,671		31,512		28,749
Property and equipment, net of accumulated depreciation and amortization of $20,655 and $20,370						Property and equipment, net of accumulated depreciation and amortization of $20,655 and $20,370	34,092		33,109
Operating lease right-of-use assets	Operating lease right-of-use assets	6,961		7,237		Operating lease right-of-use assets	6,834		7,036
Goodwill	Goodwill	9,753		9,753		Goodwill	9,753		9,753
Identifiable intangibles, net of accumulated amortization of $900 and $893		5,994		6,001
Identifiable intangibles, net of accumulated amortization of $906 and $902						Identifiable intangibles, net of accumulated amortization of $906 and $902	5,988		5,992
Equity investments	Equity investments	1,585		1,712		Equity investments	2,389		2,128
Deferred income taxes, net		935		1,294

Other noncurrent assets	Other noncurrent assets	1,057		1,773		Other noncurrent assets	1,361		1,259
Total noncurrent assets	Total noncurrent assets	57,797		56,519		Total noncurrent assets	60,417		59,277
Total assets	Total assets	$	72,596	$	72,459	Total assets	$	73,497	$	72,288

LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:	Current Liabilities:					Current Liabilities:
Current maturities of debt and finance leases	Current maturities of debt and finance leases	$	2,031	$	1,782	Current maturities of debt and finance leases	$	2,065	$	2,359
Current maturities of operating leases	Current maturities of operating leases	738		703		Current maturities of operating leases	699		714
Air traffic liability	Air traffic liability	8,947		6,228		Air traffic liability	10,422		8,160
Accounts payable	Accounts payable	4,958		4,240		Accounts payable	5,114		5,106
Accrued salaries and related benefits	Accrued salaries and related benefits	2,796		2,457		Accrued salaries and related benefits	3,340		3,288
Loyalty program deferred revenue	Loyalty program deferred revenue	3,478		2,710		Loyalty program deferred revenue	3,824		3,434
Fuel card obligation	Fuel card obligation	1,100		1,100		Fuel card obligation	1,100		1,100
Other accrued liabilities	Other accrued liabilities	1,822		1,746		Other accrued liabilities	1,918		1,779
Total current liabilities	Total current liabilities	25,870		20,966		Total current liabilities	28,482		25,940

Noncurrent Liabilities:	Noncurrent Liabilities:					Noncurrent Liabilities:
Debt and finance leases	Debt and finance leases	21,202		25,138		Debt and finance leases	18,140		20,671
Noncurrent air traffic liability		150		130

Pension, postretirement and related benefits	Pension, postretirement and related benefits	5,470		6,035		Pension, postretirement and related benefits	3,669		3,707
Loyalty program deferred revenue	Loyalty program deferred revenue	4,382		4,849		Loyalty program deferred revenue	4,443		4,448
Noncurrent operating leases	Noncurrent operating leases	6,865		7,056		Noncurrent operating leases	6,646		6,866
Other noncurrent liabilities	Other noncurrent liabilities	4,067		4,398		Other noncurrent liabilities	4,017		4,074
Total noncurrent liabilities	Total noncurrent liabilities	42,136		47,606		Total noncurrent liabilities	36,915		39,766

Commitments and Contingencies	Commitments and Contingencies					Commitments and Contingencies

Stockholders' Equity:	Stockholders' Equity:					Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 651,719,217 and 649,720,387 shares issued		—		—
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 654,572,361 and 651,800,786 shares issued						Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 654,572,361 and 651,800,786 shares issued	—		—
Additional paid-in capital	Additional paid-in capital	11,507		11,447		Additional paid-in capital	11,578		11,526
Retained earnings/(accumulated deficit)		342		(148)
Retained earnings						Retained earnings	2,569		1,170
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(6,946)		(7,130)		Accumulated other comprehensive loss	(5,709)		(5,801)
Treasury stock, at cost, 10,530,855 and 9,752,872 shares		(313)		(282)
Treasury stock, at cost, 11,153,986 and 10,535,033 shares						Treasury stock, at cost, 11,153,986 and 10,535,033 shares	(338)		(313)
Total stockholders' equity	Total stockholders' equity	4,590		3,887		Total stockholders' equity	8,100		6,582
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	72,596	$	72,459	Total liabilities and stockholders' equity	$	73,497	$	72,288
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.	The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.					The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Operations and Comprehensive ~~Income~~Income/(Loss)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2023		2022		2023		2022
Operating Revenue:	Operating Revenue:									Operating Revenue:
Passenger	Passenger	$	11,464	$	7,191	$	29,329	$	15,278	Passenger	$	13,205	$	10,958	$	23,616	$	17,865
Cargo	Cargo	240		262		801		728		Cargo	172		272		381		561
Other	Other	2,271		1,701		7,017		4,423		Other	2,201		2,594		4,340		4,747
Total operating revenue	Total operating revenue	13,975		9,154		37,147		20,429		Total operating revenue	15,578		13,824		28,337		23,173

Operating Expense:	Operating Expense:									Operating Expense:
Salaries and related costs	Salaries and related costs	3,050		2,566		8,832		7,096		Salaries and related costs	3,692		2,955		7,078		5,782
Aircraft fuel and related taxes	Aircraft fuel and related taxes	3,318		1,552		8,633		4,056		Aircraft fuel and related taxes	2,516		3,223		5,192		5,315
Ancillary businesses and refinery	Ancillary businesses and refinery	1,349		1,079		4,449		2,724		Ancillary businesses and refinery	1,173		1,718		2,298		3,100
Contracted services	Contracted services	881		634		2,425		1,723		Contracted services	994		791		2,004		1,544
Landing fees and other rents	Landing fees and other rents	562		524		1,611		1,477		Landing fees and other rents	617		546		1,201		1,050
Aircraft maintenance materials and outside repairs										Aircraft maintenance materials and outside repairs	614		522		1,199		988
Passenger commissions and other selling expenses										Passenger commissions and other selling expenses	651		526		1,152		838
Depreciation and amortization	Depreciation and amortization	538		501		1,554		1,494		Depreciation and amortization	573		510		1,137		1,016
Regional carrier expense	Regional carrier expense	528		453		1,547		1,258		Regional carrier expense	559		528		1,117		1,018
Aircraft maintenance materials and outside repairs		487		433		1,474		1,014
Passenger commissions and other selling expenses		546		308		1,385		640
Pilot agreement and related expenses										Pilot agreement and related expenses	—		—		864		—
Passenger service	Passenger service	406		226		1,050		520		Passenger service	442		369		859		644
Profit sharing										Profit sharing	595		54		667		54
Aircraft rent	Aircraft rent	131		105		380		313		Aircraft rent	132		127		264		249
Profit sharing		237		—		291		—

Government grant recognition		—		(1,822)		—		(4,512)

Other	Other	486		390		1,325		1,003		Other	529		436		1,090		840
Total operating expense	Total operating expense	12,519		6,949		34,956		18,806		Total operating expense	13,087		12,305		26,122		22,438

Operating Income	Operating Income	1,456		2,205		2,191		1,623		Operating Income	2,491		1,519		2,215		735

Non-Operating Expense:	Non-Operating Expense:									Non-Operating Expense:
Interest expense, net	Interest expense, net	(248)		(314)		(791)		(1,014)		Interest expense, net	(203)		(269)		(430)		(543)
Equity method results		4		(49)		(8)		(102)

Gain/(loss) on investments, net	Gain/(loss) on investments, net	(245)		(223)		(613)		251		Gain/(loss) on investments, net	128		(221)		251		(368)
Loss on extinguishment of debt	Loss on extinguishment of debt	(34)		(183)		(100)		(266)		Loss on extinguishment of debt	(29)		(41)		(50)		(66)
Pension and related benefit		73		111		218		337
Pension and related (expense)/benefit										Pension and related (expense)/benefit	(61)		73		(122)		145
Miscellaneous, net	Miscellaneous, net	(44)		(15)		(103)		(36)		Miscellaneous, net	(9)		(28)		(52)		(70)
Total non-operating expense, net	Total non-operating expense, net	(494)		(673)		(1,397)		(830)		Total non-operating expense, net	(174)		(486)		(403)		(902)

Income Before Income Taxes		962		1,532		794		793
Income/(Loss) Before Income Taxes										Income/(Loss) Before Income Taxes	2,317		1,033		1,812		(167)

Income Tax Provision	Income Tax Provision	(267)		(320)		(305)		(105)		Income Tax Provision	(490)		(298)		(348)		(38)

Net Income		$	695	$	1,212	$	489	$	688
Net Income/(Loss)										Net Income/(Loss)	$	1,827	$	735	$	1,464	$	(205)

Basic Earnings Per Share		$	1.09	$	1.90	$	0.77	$	1.08
Diluted Earnings Per Share		$	1.08	$	1.89	$	0.76	$	1.07
Basic Earnings/(Loss) Per Share										Basic Earnings/(Loss) Per Share	$	2.86	$	1.15	$	2.29	$	(0.32)
Diluted Earnings/(Loss) Per Share										Diluted Earnings/(Loss) Per Share	$	2.84	$	1.15	$	2.28	$	(0.32)

Comprehensive Income		$	757	$	1,294	$	673	$	926
Comprehensive Income/(Loss)										Comprehensive Income/(Loss)	$	1,872	$	798	$	1,556	$	(83)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.	The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.									The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 4

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	$	5,175	$	2,708	Net Cash Provided by Operating Activities	$	4,843	$	4,306

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Property and equipment additions:	Property and equipment additions:					Property and equipment additions:
Flight equipment, including advance payments	Flight equipment, including advance payments	(2,852)		(961)		Flight equipment, including advance payments	(1,704)		(1,879)
Ground property and equipment, including technology	Ground property and equipment, including technology	(1,314)		(1,068)		Ground property and equipment, including technology	(748)		(845)

Purchase of short-term investments	Purchase of short-term investments	(575)		(10,799)		Purchase of short-term investments	(2,011)		(474)
Redemption of short-term investments	Redemption of short-term investments	2,584		12,158		Redemption of short-term investments	1,961		2,289
Purchase of equity investments	Purchase of equity investments	(153)		—		Purchase of equity investments	—		(100)

Other, net	Other, net	121		252		Other, net	20		108
Net cash used in investing activities	Net cash used in investing activities	(2,189)		(418)		Net cash used in investing activities	(2,482)		(901)

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:

Proceeds from long-term obligations		—		1,902

Payments on debt and finance lease obligations	Payments on debt and finance lease obligations	(4,190)		(4,685)		Payments on debt and finance lease obligations	(2,986)		(2,395)

Other, net	Other, net	(40)		98		Other, net	(24)		(27)
Net cash used in financing activities	Net cash used in financing activities	(4,230)		(2,685)		Net cash used in financing activities	(3,010)		(2,422)

Net Decrease in Cash, Cash Equivalents and Restricted Cash Equivalents		(1,244)		(395)
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents						Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents	(649)		983
Cash, cash equivalents and restricted cash equivalents at beginning of period	Cash, cash equivalents and restricted cash equivalents at beginning of period	8,569		10,055		Cash, cash equivalents and restricted cash equivalents at beginning of period	3,473		8,569
Cash, cash equivalents and restricted cash equivalents at end of period	Cash, cash equivalents and restricted cash equivalents at end of period	$	7,325	$	9,660	Cash, cash equivalents and restricted cash equivalents at end of period	$	2,824	$	9,552

Non-Cash Transactions:	Non-Cash Transactions:					Non-Cash Transactions:
Right-of-use assets acquired under operating leases						Right-of-use assets acquired under operating leases	$	144	$	324
Flight and ground equipment acquired under finance leases	Flight and ground equipment acquired under finance leases	$	84	$	873	Flight and ground equipment acquired under finance leases	36		81
Right-of-use assets acquired under operating leases		372		536
Operating leases converted to finance leases	Operating leases converted to finance leases	279		31		Operating leases converted to finance leases	43		140
Equity investments and other financings	Equity investments and other financings	330		240		Equity investments and other financings	—		330
											The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
		September 30,					June 30,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	7,023	$	8,785	Cash and cash equivalents	$	2,668	$	9,221
Restricted cash included in prepaid expenses and other	Restricted cash included in prepaid expenses and other	149		162		Restricted cash included in prepaid expenses and other	156		154
Noncurrent assets:	Noncurrent assets:					Noncurrent assets:
Restricted cash included in other noncurrent assets	Restricted cash included in other noncurrent assets	153		713		Restricted cash included in other noncurrent assets	—		177
Total cash, cash equivalents and restricted cash equivalents	Total cash, cash equivalents and restricted cash equivalents	$	7,325	$	9,660	Total cash, cash equivalents and restricted cash equivalents	$	2,824	$	9,552

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.	The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.					The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 5

Financial Statements

DELTA AIR LINES, INC.

Consolidated Statements of Stockholders' Equity

(Unaudited)


		Common Stock			Additional Paid-In Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock						Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	(in millions, except per share data)	Shares	Amount								Shares	Amount		Total		(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2021		650	$	—	$	11,447	$	(148)	$	(7,130)	10	$	(282)	$	3,887
Balance at December 31, 2022																Balance at December 31, 2022	652	$	—	$	11,526	$	1,170	$	(5,801)	11	$	(313)	$	6,582
Net loss	Net loss	—	—		—		(940)		—		—	—		(940)		Net loss	—	—		—		(363)		—		—	—		(363)

Other comprehensive income	Other comprehensive income	—	—		—		—		59		—	—		59		Other comprehensive income	—	—		—		—		47		—	—		47
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	2	—		15		—		—		1	(30)		(15)		Common stock issued for employee equity awards(1)	2	—		18		—		—		—	(24)		(6)

Balance at March 31, 2022		652	$	—	$	11,462	$	(1,088)	$	(7,071)	11	$	(312)	$	2,991
Balance at March 31, 2023																Balance at March 31, 2023	654	$	—	$	11,544	$	807	$	(5,754)	11	$	(337)	$	6,260
Net income	Net income	—	—		—		735		—		—	—		735		Net income	—	—		—		1,827		—		—	—		1,827

Dividends declared																Dividends declared	—	—		—		(65)		—		—	—		(65)
Other comprehensive income	Other comprehensive income	—	—		—		—		63		—	—		63		Other comprehensive income	—	—		—		—		45		—	—		45
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	—	—		23		—		—		—	(1)		22		Common stock issued for employee equity awards(1)	1	—		34		—		—		—	(1)		33

Balance at June 30, 2022		652	$	—	$	11,485	$	(353)	$	(7,008)	11	$	(313)	$	3,811
Net income		—	—		—		695		—		—	—		695

Other comprehensive income		—	—		—		—		62		—	—		62
Common stock issued for employee equity awards(1)		—	—		22		—		—		—	—		22
Balance at June 30, 2023																Balance at June 30, 2023	655	$	—	$	11,578	$	2,569	$	(5,709)	11	$	(338)	$	8,100

Balance at September 30, 2022		652	$	—	$	11,507	$	342	$	(6,946)	11	$	(313)	$	4,590

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $39.73 and $36.76 in the March 2023 quarter and June 2023 quarter, respectively.


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2021	650	$	—	$	11,447	$	(148)	$	(7,130)	10	$	(282)	$	3,887
Net loss	—	—		—		(940)		—		—	—		(940)

Other comprehensive income	—	—		—		—		59		—	—		59
Common stock issued for employee equity awards(1)	2	—		15		—		—		1	(30)		(15)

Balance at March 31, 2022	652	$	—	$	11,462	$	(1,088)	$	(7,071)	11	$	(312)	$	2,991
Net income	—	—		—		735		—		—	—		735

Other comprehensive income	—	—		—		—		63		—	—		63
Common stock issued for employee equity awards(1)	—	—		23		—		—		—	(1)		22


Balance at June 30, 2022	652	$	—	$	11,485	$	(353)	$	(7,008)	11	$	(313)	$	3,811

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $41.00 ~~$38.11~~ and ~~$30.66~~$38.11 in the March 2022 quarter and June 2022 ~~quarter and September 2022 quarter, respectively.~~

Common Stock Additional
Paid-In Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock
(in millions, except per share data) Shares Amount Shares Amount Total
Balance at December 31, 2020 647 $ — $ 11,259 $ (428) $ (9,038) 9 $ (259) $ 1,534
Net loss — — — (1,177) — — — (1,177)
Other comprehensive income — — — — 78 — — 78
Common stock issued for employee equity awards(1)
2 — 23 — — 1 (20) 3
Government grant warrant issuance — — 44 — — — — 44
Balance at March 31, 2021 649 $ — $ 11,326 $ (1,605) $ (8,960) 10 $ (279) $ 482
Net income — — — 652 — — — 652
Other comprehensive income — — — — 78 — — 78
Common stock issued for employee equity awards(1)
1 — 28 — — — (1) 27
Government grant warrant issuance — — 42 — — — — 42
Balance at June 30, 2021 650 $ — $ 11,396 $ (953) $ (8,882) 10 $ (280) $ 1,281
Net income — — — 1,212 — — — 1,212
Other comprehensive income — — — — 82 — — 82
Common stock issued for employee equity awards(1)
— — 32 — — — (1) 31
Balance at September 30, 2021 650 $ — $ 11,428 $ 259 $ (8,800) 10 $ (281) $ 2,606

~~(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $38.35, $46.21 and $43.48 in the March 2021 quarter, June 2021 quarter and September 2021~~ quarter, respectively.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 6

Notes to the Consolidated Financial Statements

DELTA AIR LINES, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, ~~2021.~~2022.

Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented.

Due to ~~impacts from the COVID-19 pandemic and the ongoing recovery,~~ seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of operating results for the entire year.

We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.

~~Recent Accounting Standards~~

~~Standards Effective in Future Years~~

~~Fair Value of Equity Investments.~~ In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. The ASU becomes effective January 1, 2024. Upon adoption, we do not believe it will have a material impact on the valuation of our equity investments; however, we may be required to include additional disclosures to the extent we have material equity investments subject to contractual sale restrictions.

~~Supplier Finance Program Obligations.~~ In September 2022, the FASB issued ASU No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)." This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The ASU becomes effective January 1, 2023, except for the rollforward requirement, which becomes effective January 1, 2024. Upon adoption, we may be required to include additional disclosures to the extent we have material supplier finance program obligations.

NOTE 2. REVENUE RECOGNITION

Passenger Revenue
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2022 2021 2022 2021
Ticket $ 10,247 $ 6,237 $ 26,005 $ 13,067
Loyalty travel awards 786 544 2,073 1,213
Travel-related services 431 410 1,251 998
Total passenger revenue $ 11,464 $ 7,191 $ 29,329 $ 15,278



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2023		2022		2023		2022
Ticket	$	11,829	$	9,773	$	21,068	$	15,759
Loyalty travel awards	902		744		1,645		1,287
Travel-related services	474		441		903		819
Passenger revenue	$	13,205	$	10,958	$	23,616	$	17,865

~~Delta Air Lines, Inc. September 2022 Form 10-Q 7~~

~~Notes to the Consolidated Financial Statements~~

Ticket

We recognized approximately ~~$3.9~~$5.7 billion and ~~$1.8~~$3.3 billion in passenger revenue during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

~~In order to provide~~As of June 30, 2023, all of our customers more flexibility and time to plan or rebook their travel, we announced in January 2022 that all existing travel credit holders will have until December 31, 2023 to rebook their ticket for travel throughout 2024. Additionally, all Delta customers with upcoming 2022 travel or who purchase a ticket in 2022 will also have the flexibility to rebook their ticket through December 31, 2023, and travel throughout 2024. The air traffic liability ~~classified~~was recorded as a current asliability. As of ~~September 30,~~December 31, 2022, ~~represents~~ our ~~estimate of tickets and travel credits to be used within one year. We will continue to monitor our customers' travel behavior and may adjust our estimates in the future.~~

We estimate the value of tickets that will expire unused (“ticket breakage”) and recognize the related revenue at the scheduled flight date. Our ticket breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior. Given the impact of the COVID-19 pandemic on customer behavior and changes made in ticket validity terms, as well as the elimination of change fees for most tickets, our estimates of revenue that will be recognized from the air traffic liability ~~for unused tickets may vary~~was $8.3 billion, of which $100 million was included in ~~future periods.~~other noncurrent liabilities on our Consolidated Balance Sheet ("balance sheet").

Loyalty Travel Awards

Our SkyMiles loyalty program allows customers to earn mileage credits ("miles") by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. Loyalty travel awards revenue is related to the redemption of miles for air travel. Customers can also earn miles through participating companies, such as credit card companies, hotels, car rental agencies and ridesharing companies, who purchase miles from us. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, total cash sales from marketing agreements related to our loyalty program were ~~$4.1~~$3.4 billion and ~~$2.9~~$2.6 billion, respectively, which are allocated to travel and other performance obligations. ~~Loyalty travel awards revenue is related~~

Delta Air Lines, Inc. | June 2023 Form 10-Q 7

Notes to the ~~redemption of miles for air travel.~~Consolidated Financial Statements

Current Activity of the Loyalty Program. Miles are combined in one homogeneous pool and are not separately identifiable. Therefore, revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period. The timing of mile redemptions can vary widely; however, the majority of miles have historically been redeemed within two years of being earned.

The table below presents the activity of the current and noncurrent loyalty program deferred revenue and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.


Loyalty program activity	Loyalty program activity					Loyalty program activity
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Balance at January 1	Balance at January 1	$	7,559	$	7,182	Balance at January 1	$	7,882	$	7,559
Miles earned	Miles earned	2,496		1,541		Miles earned	2,110		1,558
Miles redeemed for air travel	Miles redeemed for air travel	(2,073)		(1,213)		Miles redeemed for air travel	(1,645)		(1,287)
Miles redeemed for non-air travel and other	Miles redeemed for non-air travel and other	(122)		(54)		Miles redeemed for non-air travel and other	(80)		(73)
Balance at September 30		$	7,860	$	7,456
Balance at June 30						Balance at June 30	$	8,267	$	7,757

Travel-Related Services

Travel-related services are primarily composed of services performed in conjunction with a passenger’s flight and include baggage fees, administrative fees, and on-board ~~sales and administrative fees.~~sales.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 8~~

~~Notes to the Consolidated Financial Statements~~

Other Revenue


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	(in millions)	2022		2021		2022		2021			(in millions)	2023		2022			2023		2022
Refinery	Refinery	$	1,134	$	872	$	3,835	$	2,189		Refinery	$	965	$	1,514		$	1,882	$	2,700
Loyalty program	Loyalty program	655		453		1,877		1,260			Loyalty program	774		650			1,500		1,221
Ancillary businesses	Ancillary businesses	249		215		665		586			Ancillary businesses	214		206			445		416
Miscellaneous	Miscellaneous	233		161		640		388			Miscellaneous	248		224			513		410
Total other revenue		$	2,271	$	1,701	$	7,017	$	4,423
Other revenue											Other revenue	$	2,201	$	2,594		$	4,340	$	4,747

Refinery. This represents refinery sales to third ~~parties, which are at or near cost; accordingly, the recorded margin~~parties. See Note 9, "Segments," for more information on ~~these sales is~~ ~~de minimis~~.revenue recognition within our refinery segment.

Ancillary Businesses. ~~This~~Ancillary businesses revenue represents revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations.

Delta Air Lines, Inc. | June 2023 Form 10-Q 8

Notes to the Consolidated Financial Statements

Revenue by Geographic Region

Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. A significant portion of the refinery segment's revenues typically consists of fuel sales to support the airline, which is eliminated in the Condensed Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our passenger and operating revenue by geographic region is summarized in the following tables:


Passenger revenue by geographic region	Passenger revenue by geographic region									Passenger revenue by geographic region
		Passenger Revenue											Passenger Revenue
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	(in millions)	2022		2021		2022		2021				(in millions)	2023		2022			2023		2022
Domestic	Domestic	$	8,154	$	5,759	$	22,035	$	12,517			Domestic	$	8,944	$	8,318		$	16,538	$	13,881
Atlantic	Atlantic	2,313		730		4,553		1,160				Atlantic	2,803		1,701			4,047		2,240
Latin America	Latin America	659		564		2,084		1,313				Latin America	926		745			2,058		1,425
Pacific	Pacific	338		138		657		288				Pacific	532		194			973		319
Total	Total	$	11,464	$	7,191	$	29,329	$	15,278			Total	$	13,205	$	10,958		$	23,616	$	17,865


Operating revenue by geographic region	Operating revenue by geographic region									Operating revenue by geographic region
		Operating Revenue											Operating Revenue
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	(in millions)	2022		2021		2022		2021				(in millions)	2023		2022			2023		2022
Domestic	Domestic	$	10,118	$	7,311	$	28,322	$	16,572			Domestic	$	10,749	$	10,655		$	20,145	$	18,204
Atlantic	Atlantic	2,705		954		5,538		1,688				Atlantic	3,178		2,057			4,726		2,833
Latin America	Latin America	752		653		2,417		1,620				Latin America	1,037		854			2,317		1,665
Pacific	Pacific	400		236		870		549				Pacific	614		258			1,149		471
Total	Total	$	13,975	$	9,154	$	37,147	$	20,429			Total	$	15,578	$	13,824		$	28,337	$	23,173

~~Delta Air Lines, Inc. September 2022 Form 10-Q 9~~

~~Notes to the Consolidated Financial Statements~~

NOTE 3. FAIR VALUE MEASUREMENTS

Assets/(Liabilities) Measured at Fair Value on a Recurring Basis


(in millions)	(in millions)	September 30, 2022		Level 1		Level 2		Level 3		(in millions)	June 30, 2023		Level 1		Level 2		Level 3
Cash equivalents	Cash equivalents	$	4,443	$	4,443	$	—	$	—	Cash equivalents	$	1,339	$	1,339	$	—	$	—
Restricted cash equivalents	Restricted cash equivalents	302		302		—		—		Restricted cash equivalents	156		156		—		—
Short-term investments	Short-term investments	1,345		75		1,270		—		Short-term investments
U.S. Government securities										U.S. Government securities	1,498		205		1,293		—
Corporate obligations										Corporate obligations	1,643		—		1,643		—
Asset-backed securities										Asset-backed securities	120		—		120		—
Other fixed income securities										Other fixed income securities	107		—		107		—
Long-term investments	Long-term investments	899		767		35		97		Long-term investments	1,701		1,536		39		126
Fuel hedge contracts	Fuel hedge contracts	23		—		23		—		Fuel hedge contracts	(9)		—		(9)		—

(in millions) December 31,
2021 Level 1 Level 2 Level 3
Cash equivalents $ 5,450 $ 5,450 $ — $ —
Restricted cash equivalents 635 635 — —
Short-term investments 3,386 1,376 2,010 —
Long-term investments 1,459 1,326 36 97
Fuel hedge contracts (18) — (18) —

Delta Air Lines, Inc. | June 2023 Form 10-Q 9

Notes to the Consolidated Financial Statements


(in millions)	December 31, 2022		Level 1		Level 2		Level 3
Cash equivalents	$	2,021	$	2,021	$	—	$	—
Restricted cash equivalents	206		206		—		—
Short-term investments
U.S. Government securities	1,587		122		1,465		—
Corporate obligations	1,614		—		1,614		—
Other fixed income securities	67		—		67		—
Long-term investments	1,450		1,305		38		107
Fuel hedge contracts	(47)		—		(47)		—

Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to certain self-insurance obligations and airport ~~commitments as well as proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport.~~commitments. Restricted cash equivalents are recorded in prepaid expenses and other ~~and other noncurrent assets~~ on our ~~Consolidated Balance Sheet ("~~balance ~~sheet").~~sheet. The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments. ~~Short-term investments consist of U.S. government and agency securities.~~ The fair values of ~~these~~our short-term investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information.

As of ~~September~~June 30, ~~2022,~~2023, the estimated fair value of our short-term investments was $~~1.3~~3.4 billion. Of these investments, ~~$711 million~~$3.1 billion are expected to mature in one year or less, with the remainder maturing by the first ~~half~~quarter of ~~2024.~~2025. Investments with maturities beyond one year when purchased are classified as short-term investments if they are expected to be available to support our short-term liquidity needs.

Long-Term Investments. Our long-term investments measured at fair value primarily consist of equity investments, which are valued based on market prices or other observable transactions and inputs, and are recorded in equity investments on our balance sheet. Our equity investments in private companies are classified as Level 3 in the fair value hierarchy as their equity is not traded on a public exchange and our valuations incorporate certain unobservable inputs, including non-public equity ~~issuances and forecasts provided by our investees.~~issuances. Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values. See Note 4, "Investments," for further information on our equity investments.

Fuel Hedge Contracts. Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to inventory at our wholly-owned subsidiary, Monroe Energy, LLC ("Monroe"). Our fuel hedge portfolio may consist of a combination of options, swaps or futures contracts, most of which have a duration of less than three months. Option and swap contracts are valued under income approaches using option pricing models and discounted cash flow models, respectively, based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices. We recognized gains of ~~$139~~$12 million and ~~losses of $339~~$43 million on our fuel hedge contracts in aircraft fuel and related taxes on our Condensed Consolidated Statements of Operations and Comprehensive ~~Income~~Income/(Loss) ("income statement") for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively, compared to losses of ~~$22~~$239 million and ~~$143~~$478 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively. The ~~losses~~ gainsrecognized during the ~~nine~~first six months ~~ended September 30, 2022~~of 2023 were composed of ~~$380 million of settlements on contracts, partially offset by $41~~$39 million of mark-to-market ~~adjustments. Expense from the~~gains and $4 million of settlement ~~of closed~~gains on contracts. Gains and losses on settled contracts ~~is offset by higher~~are reflected within Monroe's operating ~~profits at Monroe from higher pricing.~~results. See Note 9, "Segments," for further information on our Monroe refinery segment.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 10

Notes to the Consolidated Financial Statements

NOTE 4. INVESTMENTS

We have developed strategic relationships with a number of airlines and airline services companies through joint ventures and other forms of cooperation and support, including equity investments. Our equity investments reinforce our commitment to these relationships and generally enhance our ability to offer input to the investee on strategic issues and direction, in some cases through representation on the board of directors.

Fair Value Investments. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net in our income statement within non-operating expense and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares.

Equity Method Investments. We record our share of our equity method investees' financial results in our income statement as described in the table below.


Equity investments ownership interest and carrying value	Equity investments ownership interest and carrying value										Equity investments ownership interest and carrying value
		Accounting Treatment	Ownership Interest				Carrying Value					Accounting Treatment	Ownership Interest				Carrying Value
(in millions)	(in millions)		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		(in millions)		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Air France-KLM	Air France-KLM	Fair Value	3	%	6	%	$	94	$	165	Air France-KLM	Fair Value	3	%	3	%	$	138	$	97
China Eastern	China Eastern	Fair Value	2	%	2	%	158		177		China Eastern	Fair Value	2	%	2	%	158		189
CLEAR	CLEAR	Fair Value	6	%	6	%	189		260		CLEAR	Fair Value	5	%	5	%	192		227
Grupo Aeroméxico	Grupo Aeroméxico	Equity Method(1)	20	%	51	%	424		—		Grupo Aeroméxico	Equity Method(1)	20	%	20	%	417		412
Hanjin KAL	Hanjin KAL	Fair Value(2)	15	%	13	%	259		455		Hanjin KAL	Fair Value(2)	15	%	15	%	354		296
LATAM											LATAM	Fair Value	10	%	10	%	574		403
Unifi Aviation	Unifi Aviation	Equity Method(3)	49	%	49	%	161		159		Unifi Aviation	Equity Method(3)	49	%	49	%	168		165
Wheels Up	Wheels Up	Fair Value(4)	21	%	21	%	60		241		Wheels Up	Fair Value(4)	21	%	21	%	6		54
Other investments	Other investments	Various					240		255		Other investments	Various					382		285
Equity investments	Equity investments						$	1,585	$	1,712	Equity investments						$	2,389	$	2,128

(1)Results are included in ~~equity method results~~miscellaneous, net in our income statement under non-operating expense.

(2)At ~~September~~June 30, ~~2022,~~2023, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.

(3)Results are included in contracted services in our income statement as this entity is integral to the operations of our business by providing services at many of our airport locations.

(4)We elected to account for our investment under the fair value option.

~~Air France-KLM.~~ During the June 2022 quarter, Air France-KLM ("AFKL") executed a €2.3 billion rights issue, through the issuance of 1.9 billion new AFKL shares. We participated in the rights issue on a cash neutral basis by subscribing to approximately 36 million new AFKL shares using the proceeds from the sale of part of our rights to a third party. The net impact of these transactions reduced our ownership interest to approximately 3% and the change in the fair value of our investment in AFKL is recorded in gain/(loss) on investments, net in our income statement within non-operating expense.

~~Grupo Aeroméxico.~~ In the March 2022 quarter, Grupo Aeroméxico ("Aeroméxico") emerged from its voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code ("bankruptcy process"). At the conclusion of the bankruptcy process, Aeroméxico's previously outstanding capital stock was consolidated and exchanged for less than 0.01% of new capital stock, which effectively eliminated our historical 51% ownership stake. Upon emergence, Delta received a 20% equity stake in the newly restructured Aeroméxico in exchange for (1) our receivables under Aeroméxico's debtor-in-possession financing, (2) $100 million (recorded as an investing outflow on our Condensed Consolidated Statements of Cash Flows), and (3) our agreement to provide expanded commercial services to Aeroméxico in future periods. We account for our investment in Aeroméxico under the equity method of accounting and record our share of Aeroméxico's financial results in equity method results in our income statement.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 11

~~Notes to the Consolidated Financial Statements~~

~~Other Investments~~

~~This category includes various investments that are accounted for at fair value or under the equity method, depending on our ownership interest and the level of influence conveyed by our investment.~~

~~Virgin Atlantic.~~ Virgin Atlantic has completed an out-of-court restructuring, during which we provided strategic and operational assistance and which we continue to provide. The carrying value of our investment in Virgin Atlantic remains zero as of September 30, 2022. We maintained our 49% equity interest and continue to track our share of Virgin Atlantic's losses under the equity method of accounting, which are only recorded to the extent we make additional investments in Virgin Atlantic.

~~LATAM.~~ LATAM Airlines Group S.A. ("LATAM") is undergoing voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code, and the carrying value of our investment in LATAM remains zero as of September 30, 2022. In order to support our relationship with LATAM, we are providing strategic and operational assistance through the bankruptcy process. After LATAM's refinancing in the June 2022 quarter, we have a $71 million noncurrent receivable outstanding associated with LATAM's debtor-in-possession financing. LATAM's plan of reorganization has been confirmed by the Bankruptcy Court and is expected to take effect before the end of 2022. As our pre-bankruptcy equity ownership of approximately 20% will be substantially diluted to a ~~de minimis~~ level, we expect to participate in certain of the offerings contemplated under the reorganization plan at an additional investment level commensurate with an equity stake of approximately 10% in the reorganized LATAM.

In the September 2022 quarter, final regulatory approval was granted for our trans-American joint venture agreement with LATAM. This agreement will combine our highly complementary route networks between North and South America, with the goal of providing customers with a seamless travel experience and industry-leading connectivity. Approval was granted for a 10-year period with a subsequent reassessment and extension process. This agreement supports our strategic partnership with LATAM and the value of our $1.2 billion alliance-related indefinite-lived intangible asset. We believe the LATAM joint venture agreement will generate growth opportunities, building upon Delta's and LATAM's global footprint and joint ventures.

We have classified our intangible asset as indefinite-lived as we expect to indefinitely receive the economic benefits from the relationship, similar to other joint venture arrangements between U.S. and foreign carriers that have been cleared by competition authorities in relevant foreign jurisdictions and granted antitrust immunity from the U.S. Department of Transportation ("DOT"). Antitrust immunity grants are generally subject to reporting requirements and periodic reassessment processes administered by the DOT. We have determined that there are currently no material legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of our LATAM alliance-related intangible asset.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 12~~

Notes to the Consolidated Financial Statements

NOTE 5. DEBT


Summary of outstanding debt by category	Summary of outstanding debt by category											Summary of outstanding debt by category
		Maturity			Interest Rate(s) Per Annum at			September 30,		December 31,			Maturity			Interest Rate(s) Per Annum at			June 30,		December 31,
(in millions)	(in millions)	Dates			September 30, 2022			2022		2021		(in millions)	Dates			June 30, 2023			2023		2022
Unsecured Payroll Support Program Loans	Unsecured Payroll Support Program Loans	2030	to	2031	1.00%			$	3,496	$	3,496	Unsecured Payroll Support Program Loans	2030	to	2031	1.00%			$	3,496	$	3,496
Unsecured notes	Unsecured notes	2023	to	2029	2.90%	to	7.38%	2,997		4,354		Unsecured notes	2024	to	2029	2.90%	to	7.38%	2,590		2,997
Financing arrangements secured by SkyMiles assets:	Financing arrangements secured by SkyMiles assets:											Financing arrangements secured by SkyMiles assets:
SkyMiles Notes(1)	SkyMiles Notes(1)	2023	to	2028	4.50%	and	4.75%	5,144		6,000		SkyMiles Notes(1)	2023	to	2028	4.50%	and	4.75%	4,792		5,144
SkyMiles Term Loan(1)(2)	SkyMiles Term Loan(1)(2)	2023	to	2027	6.46%			2,820		2,820		SkyMiles Term Loan(1)(2)	2023	to	2027	8.80%			2,092		2,820
NYTDC Special Facilities Revenue Bonds(1)												NYTDC Special Facilities Revenue Bonds(1)	2024	to	2045	4.00%	to	5.00%	2,778		2,838
Financing arrangements secured by aircraft:	Financing arrangements secured by aircraft:											Financing arrangements secured by aircraft:
Certificates(1)	Certificates(1)	2022	to	2028	2.00%	to	8.00%	1,855		1,932		Certificates(1)	2023	to	2028	2.00%	to	8.00%	1,699		1,802
Notes(1)(2)	Notes(1)(2)	2022	to	2033	1.99%	to	5.75%	915		1,139		Notes(1)(2)	2023	to	2033	6.61%	to	7.62%	181		813
NYTDC Special Facilities Revenue Bonds(1)		2023	to	2045	4.00%	to	5.00%	2,838		2,894
Financing arrangements secured by slots, gates and/or routes:	Financing arrangements secured by slots, gates and/or routes:											Financing arrangements secured by slots, gates and/or routes:
2020 Senior Secured Notes	2020 Senior Secured Notes	2025			7.00%			1,542		2,589		2020 Senior Secured Notes	2025			7.00%			1,040		1,542
2018 Revolving Credit Facility(2)	2018 Revolving Credit Facility(2)	2023	to	2024	Undrawn			—		—		2018 Revolving Credit Facility(2)	2024	to	2025	Undrawn			—		—
Other financings(1)(2)	Other financings(1)(2)	2022	to	2030	2.51%	to	5.00%	67		68		Other financings(1)(2)	2023	to	2030	2.51%	to	5.00%	67		67
Other revolving credit facilities(2)	Other revolving credit facilities(2)	2023	to	2024	Undrawn			—		—		Other revolving credit facilities(2)	2023	to	2024	Undrawn			—		—
Total secured and unsecured debt	Total secured and unsecured debt							$	21,674	$	25,292	Total secured and unsecured debt							$	18,735	$	21,519
Unamortized (discount)/premium and debt issue cost, net and other	Unamortized (discount)/premium and debt issue cost, net and other							(151)		(208)		Unamortized (discount)/premium and debt issue cost, net and other							(99)		(138)
Total debt	Total debt							$	21,523	$	25,084	Total debt							$	18,636	$	21,381
Less: current maturities	Less: current maturities							(1,723)		(1,502)		Less: current maturities							(1,766)		(2,055)
Total long-term debt	Total long-term debt							$	19,800	$	23,582	Total long-term debt							$	16,870	$	19,326

(1)Due in installments during the years shown above.

(2)Certain financings are comprised of variable rate debt. All variable rates are equal to ~~LIBOR~~Secured Overnight Financing Rate ("SOFR") (generally subject to a floor) or another index rate, plus a specified margin.

Availability Under Revolving Credit Facilities

As of ~~September~~June 30, ~~2022,~~2023, we had approximately $2.8 billion undrawn and available under our revolving credit facilities. In addition, we had approximately ~~$300~~$400 million outstanding letters of credit as of ~~September~~June 30, ~~2022~~2023 that did not affect the availability of our revolving credit facilities.

Early Settlement of Outstanding Notes

~~In August 2022, we completed a cash tender offer for an aggregate purchase price of $1.5 billion, excluding accrued and unpaid interest, of certain of our outstanding debt securities. As a result of~~During the ~~tender offer,~~six months ended June 30, 2023, we repurchased ~~the following notes:~~

Notes Repurchased in Tender Offer
(in millions) Location in debt table Principal Repurchased Amount Paid
4.500% Senior Secured Notes due 2025 SkyMiles Notes $ 856 $ 850
7.000% Senior Secured Notes due 2025 2020 Senior Secured Notes 478 498
7.375% Notes due 2026 Unsecured Notes 84 87
3.800% Notes due 2023 Unsecured Notes 65 65
Total Notes Repurchased $ 1,483 $ 1,500

~~In addition to the early settlement of the~~a principal amount of $1.1 billion of various secured and unsecured notes and a portion of the ~~purchased~~SkyMiles Term Loan on the open market and made early principal repayments of $585 million on various notes ~~we recorded~~secured by aircraft. These payments resulted in a $50 million loss ~~of $34 million~~ on extinguishment of debt recorded in non-operating expense in our income statement.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1312

Notes to the Consolidated Financial Statements

Fair Value of Debt

Market risk associated with our fixed- and variable-rate debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt shown below is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Debt is primarily classified as Level 2 within the fair value hierarchy.

Fair value of outstanding debt
(in millions) September 30,
2022 December 31,
2021
Net carrying amount $ 21,523 $ 25,084
Fair value $ 20,500 $ 26,900


Fair value of outstanding debt
(in millions)	June 30, 2023		December 31, 2022
Net carrying amount	$	18,636	$	21,381
Fair value	$	18,300	$	20,700

Covenants

Our debt agreements contain various affirmative, negative and financial covenants. We were in compliance with the covenants in our debt agreements at ~~September~~June 30, ~~2022.~~2023.

NOTE 6. EMPLOYEE BENEFIT PLANS


Employee benefit plans net periodic (benefit) cost
Employee benefit plans net periodic cost (benefit)										Employee benefit plans net periodic cost (benefit)
		Pension Benefits				Other Postretirement and Postemployment Benefits					Pension Benefits				Other Postretirement and Postemployment Benefits
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Three Months Ended September 30,
Three Months Ended June 30,										Three Months Ended June 30,
Service cost	Service cost	$	—	$	—	$	18	$	21	Service cost	$	—	$	—	$	18	$	18
Interest cost	Interest cost	153		146		32		29		Interest cost	213		153		50		32
Expected return on plan assets	Expected return on plan assets	(330)		(381)		(4)		(9)		Expected return on plan assets	(264)		(330)		—		(4)
Amortization of prior service credit	Amortization of prior service credit	—		—		(1)		(2)		Amortization of prior service credit	—		—		(1)		(1)
Recognized net actuarial loss	Recognized net actuarial loss	64		88		13		15		Recognized net actuarial loss	60		64		3		13
Settlements		—		1		—		—
Net periodic (benefit) cost		$	(113)	$	(146)	$	58	$	54

Nine Months Ended September 30,
Net periodic cost (benefit)										Net periodic cost (benefit)	$	9	$	(113)	$	70	$	58

Six Months Ended June 30,										Six Months Ended June 30,
Service cost	Service cost	$	—	$	—	$	53	$	64	Service cost	$	—	$	—	$	36	$	35
Interest cost	Interest cost	459		437		96		88		Interest cost	426		306		100		64
Expected return on plan assets	Expected return on plan assets	(990)		(1,142)		(12)		(26)		Expected return on plan assets	(528)		(660)		—		(8)
Amortization of prior service credit	Amortization of prior service credit	—		—		(4)		(5)		Amortization of prior service credit	—		—		(3)		(3)
Recognized net actuarial loss	Recognized net actuarial loss	191		266		41		42		Recognized net actuarial loss	119		127		6		28
Settlements		—		1		—		—
Net periodic (benefit) cost		$	(340)	$	(438)	$	174	$	163

Net periodic cost (benefit)										Net periodic cost (benefit)	$	17	$	(227)	$	139	$	116

Service cost is recorded in salaries and related costs in our income statement, while all other components are recorded within pension and related (expense)/benefit under non-operating expense.

~~Expected Long-Term Rate of Return.~~ Based on our funded status as of December 31, 2021, we have modified the strategic asset allocation mix to reduce the investment risk of the portfolio. As a result of the lower risk profile of the portfolio, the weighted average expected long-term rate of return on our defined benefit pension plan assets for 2022 net periodic benefit cost is 7.0%.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1413

Notes to the Consolidated Financial Statements

NOTE 7. COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Commitments

Our future aircraft purchase commitments totaled approximately ~~$19.9~~$18.5 billion at ~~September~~June 30, ~~2022.~~2023.

							Aircraft purchase commitments(1)
(in millions)	(in millions)	Total		(in millions)	Total
Three months ending December 31, 2022		$	1,380
2023		3,440
Six months ending December 31, 2023				Six months ending December 31, 2023	$	1,560
2024	2024	3,640		2024	3,590
2025	2025	4,230		2025	5,340
2026	2026	3,700		2026	3,840
2027				2027	2,720
Thereafter	Thereafter	3,500		Thereafter	1,420
Total	Total	$	19,890	Total	$	18,470

(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and may be subject to change based on modifications to those agreements or changes in delivery schedules.

Our future aircraft purchase commitments included the following aircraft at ~~September~~June 30, ~~2022:~~2023:


Aircraft purchase commitments by fleet type
Aircraft Type			Purchase Commitments
A220-300			5070
A321-200neo			~~147~~120
A330-900neo			2017
A350-900			18
~~B-737-900ER~~			316
B-737-10			100
Total			~~338~~323

Aircraft Orders

During the June ~~2022~~2023 quarter, we agreed to acquire ~~four B-737-900ER and~~ one A330-900 ~~aircraft. Deliveries of the pre-owned B-737-900ER aircraft are expected to occur by the end of 2022 and~~with delivery ~~of the new A330-900 aircraft is~~ expected to occur in ~~2024.~~

In July 2022, we entered into a purchase agreement with Boeing for 100 Boeing 737-10 aircraft, the largest model in the 737 MAX family of aircraft, to start delivery in 2025 with the option to purchase an additional thirty 737-10 aircraft. Also in July 2022, we2025. We also exercised purchase rights for 12 A220-300 ~~aircraft~~ with ~~Airbus.~~delivery expected to start in 2027.

Legal Contingencies

We are involved in various legal proceedings related to employment practices, environmental issues, commercial disputes, antitrust ~~matters~~ and other regulatory matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, we believe that the resolution of current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements.

Employees Under Collective Bargaining Agreements

In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million.These items are recorded within pilot agreement and related expenses in our income statement.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1514

Notes to the Consolidated Financial Statements

~~Other Contingencies~~

~~General Indemnifications~~

We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct.

Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties' related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or other equipment.

We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have insurance policies in place as required by applicable environmental laws.

Some of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to specified changes in laws or regulations. In some of these financing transactions, we also bear the risk of changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes.

We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

~~Other~~

We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.

NOTE 8. ACCUMULATED OTHER COMPREHENSIVE LOSS

Components of accumulated other comprehensive loss
(in millions) Pension and Other Benefit Liabilities Other Total
Balance at January 1, 2022 (net of tax effect of $1,184) $ (7,170) $ 40 $ (7,130)
Reclassifications into earnings (net of tax effect of $56)(1)
184 — 184
Balance at September 30, 2022 (net of tax effect of $1,128) $ (6,986) $ 40 $ (6,946)


Components of accumulated other comprehensive loss
(in millions)	Pension and Other Benefit Liabilities		Other		Tax Effect		Total
Balance at January 1, 2023	$	(6,624)	$	41	$	782	$	(5,801)
Changes in value	—		(3)		1		(2)
Reclassifications into earnings(1)	122		—		(28)		94
Balance at June 30, 2023	$	(6,502)	$	38	$	755	$	(5,709)

Balance at January 1, 2021 (net of tax effect of $1,764) $ (9,078) $ 40 $ (9,038)
Changes in value (net of tax effect of $1) 3 — 3
Reclassifications into earnings (net of tax effect of $71)(1)
235 — 235
Balance at September 30, 2021 (net of tax effect of $1,692) $ (8,840) $ 40 $ (8,800)


Balance at January 1, 2022	$	(8,355)	$	41	$	1,184	$	(7,130)

Reclassifications into earnings(1)	159		—		(37)		122
Balance at June 30, 2022	$	(8,196)	$	41	$	1,147	$	(7,008)

(1)Amounts reclassified from accumulated other comprehensive loss for pension and other benefit liabilities are recorded in pension and related (expense)/benefit in non-operating expense in our income statement.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1615

Notes to the Consolidated Financial Statements

NOTE 9. SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and ~~through~~from jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$834~~$618 million and ~~$2.6~~$1.3 billion, respectively, compared to ~~$629 million~~$1.0 billion and ~~$1.7~~$1.8 billion for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively.

Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.


Financial information by segment	Financial information by segment										Financial information by segment
(in millions)	(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated		(in millions)	Airline		Refinery			Intersegment Sales/Other			Consolidated
Three Months Ended September 30, 2022
Three Months Ended June 30, 2023											Three Months Ended June 30, 2023
Operating revenue:	Operating revenue:	$	12,841	$	2,599				$	13,975	Operating revenue:	$	14,613	$	2,037					$	15,578
Sales to airline segment	Sales to airline segment					$	(504)	(1)			Sales to airline segment						$	(365)	(1)
Exchanged products	Exchanged products					(834)		(2)			Exchanged products						(618)		(2)
Sales of refined products	Sales of refined products					(127)		(3)			Sales of refined products						(89)
Depreciation and amortization											Depreciation and amortization	573		23			(23)		(3)	573
Operating income	Operating income	1,264		192		—			1,456		Operating income	2,447		44		(3)	—			2,491
Interest expense, net	Interest expense, net	248		3		(3)			248		Interest expense, net	203		3			(3)			203

Total assets, end of period											Total assets, end of period	70,265		3,309			(77)			73,497

Capital expenditures											Capital expenditures	1,422		30			—			1,452

Three Months Ended June 30, 2022											Three Months Ended June 30, 2022
Operating revenue:											Operating revenue:	$	12,310	$	3,353					$	13,824
Sales to airline segment											Sales to airline segment						$	(761)	(1)
Exchanged products											Exchanged products						(982)		(2)
Sales of refined products											Sales of refined products						(96)
Depreciation and amortization	Depreciation and amortization	538		23		(23)		(4)	538		Depreciation and amortization	510		23			(23)		(3)	510
Operating income											Operating income	1,250		269		(3)	—			1,519
Interest expense, net											Interest expense, net	269		2			(2)			269

Total assets, end of period	Total assets, end of period	69,680		2,977		(61)			72,596		Total assets, end of period	71,766		3,065			(26)			74,805
Net fair value obligations, end of period	Net fair value obligations, end of period	—		(291)		—			(291)		Net fair value obligations, end of period	—		(556)			—			(556)
Capital expenditures	Capital expenditures	1,393		49		—			1,442		Capital expenditures	928		30			—			958

Three Months Ended September 30, 2021
Operating revenue:		$	8,282	$	1,696				$	9,154
Sales to airline segment						$	(183)	(1)
Exchanged products						(629)		(2)
Sales of refined products						(12)		(3)
Operating income		2,108		97		—			2,205
Interest expense, net		314		2		(2)			314
Depreciation and amortization		501		24		(24)		(4)	501

Total assets, end of period		70,783		2,012		(12)			72,783
Net fair value obligations, end of period		—		(547)		—			(547)
Capital expenditures		818		12		—			830

(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.

(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

(3)~~These sales were at or near cost; accordingly, the margin on these sales is~~ ~~de minimis~~.

~~(4)~~Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1716

Notes to the Consolidated Financial Statements


Financial information by segment	Financial information by segment										Financial information by segment
(in millions)	(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated		(in millions)	Airline		Refinery			Intersegment Sales/Other			Consolidated
Nine Months Ended September 30, 2022
Six Months Ended June 30, 2023											Six Months Ended June 30, 2023
Operating revenue:	Operating revenue:	$	33,312	$	8,265				$	37,147	Operating revenue:	$	26,455	$	4,388					$	28,337
Sales to airline segment	Sales to airline segment					$	(1,557)	(1)			Sales to airline segment						$	(961)	(1)
Exchanged products	Exchanged products					(2,623)		(2)			Exchanged products						(1,330)		(2)
Sales of refined products	Sales of refined products					(250)		(3)			Sales of refined products						(215)
Depreciation and amortization											Depreciation and amortization	1,137		46			(46)		(3)	1,137
Operating income	Operating income	1,676		515		—			2,191		Operating income	1,949		266		(3)	—			2,215
Interest expense, net	Interest expense, net	791		7		(7)			791		Interest expense, net	430		8			(8)			430
Depreciation and amortization		1,554		70		(70)		(4)	1,554
Capital expenditures	Capital expenditures	4,069		97		—			4,166		Capital expenditures	2,393		59			—			2,452

Nine Months Ended September 30, 2021
Six Months Ended June 30, 2022											Six Months Ended June 30, 2022
Operating revenue:	Operating revenue:	$	18,240	$	4,177				$	20,429	Operating revenue:	$	20,473	$	5,666					$	23,173
Sales to airline segment	Sales to airline segment					$	(292)	(1)			Sales to airline segment						$	(1,053)	(1)
Exchanged products	Exchanged products					(1,667)		(2)			Exchanged products						(1,791)		(2)
Sales of refined products	Sales of refined products					(29)		(3)			Sales of refined products						(122)
Operating income (loss)		1,809		(186)		—			1,623
Depreciation and amortization											Depreciation and amortization	1,016		47			(47)		(3)	1,016
Operating income											Operating income	412		323		(3)	—			735
Interest expense, net	Interest expense, net	1,014		5		(5)			1,014		Interest expense, net	543		4			(4)			543
Depreciation and amortization		1,494		72		(72)		(4)	1,494
Capital expenditures	Capital expenditures	1,994		35		—			2,029		Capital expenditures	2,676		48			—			2,724

(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

(3)~~These sales were at or near cost; accordingly, the margin on these sales is~~ ~~de minimis~~.

~~(4)~~Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.

Fair Value Obligations

The net fair value obligations presented in the ~~financial information by segment for the three month periods~~ table above are related to renewable fuel compliance costs ~~are~~and presented net of any related assets or fixed price purchase ~~agreements and are~~agreements. Their value is based on quoted market prices and other observable information and are therefore classified as Level 2 in the fair value hierarchy. As of June 30, 2023 we had no net fair value obligation outstanding. Our obligation ~~as of September 30, 2022 was~~is calculated using the U.S. Environmental Protection Agency's ("EPA") Renewable Fuel Standard ("RFS") volume requirements, which were finalized in 2022 for the ~~June~~2021 and 2022 ~~quarter. The~~obligations, and proposed in 2022 for 2023 obligations. In the March 2023 quarter, we settled a portion of our 2021 Renewable Identification Numbers ("RINs") obligation with the EPA. We expect to settle the remaining 2021 and our entire 2022 RINs obligation by the 2022 compliance ~~deadlines to retire our obligations for 2020 and 2021 are~~deadline in the ~~fourth quarter of 2022 and first quarter of~~December 2023 ~~respectively.~~

quarter.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1817

Notes to the Consolidated Financial Statements

NOTE 10. ~~EARNINGS~~EARNINGS/(LOSS) PER SHARE

We calculate basic ~~earnings~~earnings/(loss) per share and diluted loss per share by dividing net ~~income~~income/(loss) by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based instruments, including stock options, restricted stock awards and warrants. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted ~~earnings~~earnings/(loss) per share:


Basic and diluted earnings per share
Basic and diluted earnings/(loss) per share										Basic and diluted earnings/(loss) per share
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2023		2022		2023		2022
Net income		$	695	$	1,212	$	489	$	688
Net income/(loss)										Net income/(loss)	$	1,827	$	735	$	1,464	$	(205)

Basic weighted average shares outstanding	Basic weighted average shares outstanding	638		637		638		636		Basic weighted average shares outstanding	639		638		639		638
Dilutive effect of share-based instruments	Dilutive effect of share-based instruments	3		4		3		5		Dilutive effect of share-based instruments	3		3		3		—
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	641		641		641		641		Diluted weighted average shares outstanding	642		641		642		638

Basic earnings per share		$	1.09	$	1.90	$	0.77	$	1.08
Diluted earnings per share		$	1.08	$	1.89	$	0.76	$	1.07
Basic earnings/(loss) per share										Basic earnings/(loss) per share	$	2.86	$	1.15	$	2.29	$	(0.32)
Diluted earnings/(loss) per share										Diluted earnings/(loss) per share	$	2.84	$	1.15	$	2.28	$	(0.32)

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 1918

Item 2. MD&A

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes included in our ~~2021~~2022 Form 10-K.

~~September 2022~~June 2023 Quarter Financial ~~Overview~~Highlights

~~During~~Our operating income for the ~~September 2022~~June 2023 quarter ~~we have experienced continued improvement in our recovery from~~improved $972 million compared to the impact of the COVID-19 pandemic, which improvement we expect will continue in the December 2022 quarter and beyond. Given the drastic and unprecedented impact of the COVID-19 pandemic on our operating results in 2021 and 2020, we believe that a comparison of our results in the SeptemberJune 2022 quarter to ~~both the September 2021 and September 2019 quarters in this overview section allows for a better understanding of the full impact of the COVID-19 pandemic and the progress of our recovery.~~

~~The table below shows selected key financial and statistical measures~~$2.5 billion for the ~~three months ended September 30, 2022, 2021 and 2019.~~

Three Months Ended September 30, 2022 vs. 2021 % Increase (Decrease) 2022 vs. 2019 % Increase (Decrease)
(in millions) 2022 2021 2019
Total operating revenue $ 13,975 $ 9,154 $ 12,560 53 % 11 %
Total operating expense 12,519 6,949 10,489 80 % 19 %
Operating income 1,456 2,205 2,071 (34) % (30) %
Available seat miles ("ASM") 63,007 54,083 75,742 17 % (17) %

The increase in operating revenue during the September 2022 quarter compared to the September 2021 quarter primarily resulted from a $4.3 billion, or 59%, increase in passenger revenue on increased demand and capacity. Offsetting the increase in operating revenue, the decrease in operating income resulted from a $1.8 billion increase in fuel expense and increases in other volume-related expenses as we continued to restore our operation during the September 2022 quarter, as well as the recognition of a $1.8 billion benefit from the Payroll Support Programs ("PSP") grant proceeds in the September 2021 quarter, which reduced expenses in that quarter.

Compared to operating income of $2.1 billion in the September 2019 quarter, our operating income in the September 2022 quarter was lower primarily from a 48% increase in fuel expense and flat passenger revenue on 17% lower system capacity, as we continue to restore our operations following the COVID-19 pandemic.reasons discussed below.

Revenue. Compared to the ~~September 2021~~June 2022 quarter, our ~~operating~~total revenue increased ~~$4.8~~$1.8 billion, or ~~53%~~13%, due primarily to strength in the demand for travel and a 17% increase in capacity. Total revenue, adjusted (a non-GAAP financial measure) to exclude refinery sales to third parties, increased ~~travel demand.~~in the June 2023 quarter by $2.3 billion, or 19%, compared to the June 2022 quarter.

Compared to the September 2019 quarter, our operating revenue was $1.4 billion, or 11%, higher due primarily to higher refinery third party sales and improved yield. We expect system capacity to be 91% to 92% recovered in the December 2022 quarter compared to the December 2019 quarter.

Consumer demand continued to improve through the September 2022 quarter with a strong summer season driving domestic passenger revenue 2% higher than the September 2019 quarter, despite 11% lower capacity.

International revenue has lagged the recovery in domestic travel, but improved in the September 2022 quarter to approximately 97% recovered compared to the September 2019 quarter as travel restrictions eased and many countries have now ended testing requirements, including the U.S. Despite the recent policy changes, we still expect the recovery of international revenue to continue to trail domestic revenue during the December 2022 quarter.

We remain optimistic about the ultimate recovery of business travel, which is comprised of both corporate managed travel and small- and medium-sized businesses, and expect demand for business travel to increase during the December 2022 quarter.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 20~~

~~Item 2. MD&A~~

Operating Expense. Total operating expense in the ~~September 2022~~June 2023 quarter increased ~~$5.6 billion,~~$782 million, or ~~80%~~6%, compared to the ~~September 2021~~June 2022 quarter, primarily ~~resulting from increased fuel costs,~~ due to ~~both an increase in fuel price and increased~~the impact of higher capacity as well as higher ~~salaries~~employee costs from increased wages and ~~related costs and an increase in expenses related to refinery sales to third parties, reflected in ancillary businesses and refinery~~profit sharing, partially offset by lower fuel expense. ~~The increase also resulted from $1.8 billionof PSP grant proceeds recognized during the September 2021 quarter, which reduced expenses in that quarter.~~ Total operating expense, adjusted (a non-GAAP financial measure) ~~for~~in the ~~September 2022~~June 2023 quarter increased ~~$3.5~~$1.3 billion, or ~~45%~~12%, compared to the ~~September 2021~~June 2022 quarter. Adjustments were primarily to exclude expenses related to ~~PSP grant proceeds in the September 2021 quarter and~~ refinery sales to third parties.

Total operating expense in the September 2022 quarter increased $2.0 billion, or 19%, compared to the September 2019 quarter, primarily resulting from increased fuel costs and expenses related to refinery sales to third parties, reflected in ancillary businesses and refinery expense. Total operating expense, adjusted for the September 2022 quarter increased $888 million, or 8%, compared to the September 2019 quarter. Adjustments were primarily to exclude mark to market adjustments and expenses related to refinery sales to third parties.

Our total operating cost per available seat mile ("CASM") ~~increased 43% to 19.87 cents~~decreased 9% compared to the ~~September 2019~~June 2022 quarter, primarily due to ~~the higher costs discussed above~~decreased fuel expense and expenses related to refinery sales to third parties on a 17% ~~decrease~~ increasein capacity. Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure) increased ~~22.5% to 12.43 cents primarily due to the 17% decrease in capacity.~~

2.4%.

~~We now expect non-fuel costs for the full year 2022 to be approximately 18% higher than 2019, primarily due to capacity reductions during the second half of 2022.~~

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount ~~committed and~~ available ~~to be drawn~~ under our revolving credit facilities ("liquidity") as of ~~September~~June 30, ~~2022~~2023 was ~~$11.2~~$8.8 billion. During the ~~September 2022~~June 2023 quarter, operating activities generated ~~$869 million.~~

~~Additionally, total cash sales to American Express were $1.4 billion in the September 2022 quarter, an increase of approximately 35% compared to the September 2019 quarter.~~

$2.6 billion. Also, during the quarter, cash flows used in investing activities ~~used~~were a net of ~~$1.3~~$1.4 billion, primarily for capital ~~expenditures, partially offset by net redemptions~~ expenditures. These operating and investing activities generated $1.1 billionof ~~short-term investments. During~~free cash flow (a non-GAAP financial measure) in the ~~September 2022 quarter~~June 2023 quarter. Additionally, we had cash outflows of approximately $1.8 billion related to repayments of our debt and finance leases.

Total cash sales to American Express were $1.7 billion in the June 2023 quarter, an increase of approximately 22% compared to the June 2022 quarter.

The non-GAAP financial measure referenced above for total revenue, adjusted, operating expense, adjusted, CASM-Ex and ~~CASM-Ex~~free cash flow are defined and reconciled in "Supplemental Information" below.

~~Environmental Sustainability.~~ During 2022, we are continuing to develop our climate transition plan and to pursue our short-, medium-, and long-term climate goals. In July 2022, Science Based Targets Initiative (SBTi) validated our medium-term goal to reduce well-to-wake (lifecycle) scope 1 and 3 jet fuel greenhouse gas emissions by 45% per revenue tonne kilometer by 2035 from a 2019 base year. We expect our path toward achievement of these goals to depend heavily on improved fuel efficiency from fleet renewal, increased use of sustainable aviation fuel (SAF) which is not presently available at scale or at prices competitive to jet fuel, operational initiatives and technological innovation. In the nine months ended September 30, 2022, we incurred $98 million of expense related to carbon offset credits, which relates to a portion of our airline segment's 2021 and March 2022 quarter carbon emissions. As we continue to work on accelerating our long-term, net-zero greenhouse gas emissions goal, our vision of the path forward will require multiple initiatives, centered on a long-term strategy of decarbonization; we therefore expect substantially all of our investment going forward will be focused on solutions other than carbon offsets.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2119

Item 2. MD&A - Results of Operations

Results of Operations - Three Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

Total Operating Revenue


		Three Months Ended September 30,						Increase (Decrease)	% Increase (Decrease)						Three Months Ended June 30,					Increase (Decrease)			% Increase (Decrease)
(in millions)(1)	(in millions)(1)	2022			2021									(in millions)(1)	2023		2022
Ticket - Main cabin	Ticket - Main cabin	$	5,893		$	3,705			$	2,188		59	%			Ticket - Main cabin	$	6,694		$	5,664			$	1,030		18	%
Ticket - Premium products	Ticket - Premium products	4,354			2,532				1,822			72	%			Ticket - Premium products	5,135			4,109				1,026			25	%
Loyalty travel awards	Loyalty travel awards	786			544				242			44	%			Loyalty travel awards	902			744				158			21	%
Travel-related services	Travel-related services	431			410				21			5	%			Travel-related services	474			441				33			7	%
Total passenger revenue		$	11,464		$	7,191			$	4,273		59	%
Passenger revenue																Passenger revenue	$	13,205		$	10,958			$	2,247		21	%
Cargo	Cargo	240			262				(22)			(8)	%			Cargo	172			272				(100)			(37)	%
Other	Other	2,271			1,701				570			34	%			Other	2,201			2,594				(393)			(15)	%
Total operating revenue	Total operating revenue	$	13,975		$	9,154			$	4,821		53	%			Total operating revenue	$	15,578		$	13,824			$	1,754		13	%

TRASM (cents)	TRASM (cents)	22.18		¢	16.93		¢		5.25		¢	31	%			TRASM (cents)	22.58		¢	23.47		¢		(0.89)		¢	(4)	%
Third-party refinery sales	Third-party refinery sales	(1.80)			(1.61)				(0.19)			12	%			Third-party refinery sales	(1.40)			(2.57)				1.17			(46)	%

TRASM, adjusted(2)	TRASM, adjusted(2)	20.38		¢	15.31		¢		5.07		¢	33	%			TRASM, adjusted(2)	21.18		¢	20.90		¢		0.28		¢	1	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)TRASM, adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Compared to the ~~September 2021~~June 2022 quarter, our ~~operating~~total revenue increased ~~$4.8~~$1.8 billion, or ~~53%~~13%, due primarily to ~~the continued recovery~~strength in travel demand ~~from the COVID-19 pandemic. The increase in operating revenue,~~ on a 17% increase in capacity, ~~resulted in a 31% increase in total revenue per available seat mile ("TRASM") and a 33% increase in TRASM, adjusted compared to the September 2021 quarter. The~~with growth in ~~passenger~~ revenue ~~was due to increased demand in both main cabin and premium products, with yield growth in~~from premium products outpacing main cabin.

This increase was partially offset by a decline in third-party refinery sales recorded in other revenue. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery ~~sales recorded~~sales. The increase in ~~other revenue.~~total revenue, in conjunction with a larger increase in capacity, resulted in a 4%decrease in total revenue per available seat mile ("TRASM").

Passenger Revenue by Geographic Region


				Increase (Decrease) vs. Three Months Ended September 30, 2021															Increase (Decrease) vs. Three Months Ended June 30, 2022
(in millions)	(in millions)	Three Months Ended September 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor		(in millions)	Three Months Ended June 30, 2023		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	Domestic	$	8,154	42	%	8	%	5	%	32	%	35	%	2	pts	Domestic	$	8,944	8	%	7	%	9	%	—	%	(1)	%	(1)	pt
Atlantic	Atlantic	2,313		217	%	153	%	103	%	25	%	56	%	17	pts	Atlantic	2,803		65	%	41	%	35	%	17	%	22	%	4	pts
Latin America	Latin America	659		17	%	(4)	%	(13)	%	22	%	34	%	8	pts	Latin America	926		24	%	12	%	7	%	11	%	16	%	4	pts
Pacific	Pacific	338		145	%	218	%	(3)	%	(23)	%	153	%	60	pts	Pacific	532		175	%	175	%	113	%	—	%	29	%	19	pts
Total	Total	$	11,464	59	%	27	%	17	%	25	%	37	%	7	pts	Total	$	13,205	21	%	18	%	17	%	2	%	3	%	1	pt

Domestic

Domestic passenger ~~unit~~ revenue ~~("PRASM")~~ increased 8% in the ~~September 2022~~June 2023 quarter compared to the ~~September 2021 quarter as a result of demand increasing faster than capacity, as well as higher yields, during the September 2022 quarter.~~

~~The September~~June 2022 quarter on a 9% increase in capacity and a slight decrease in load factor, with domestic ~~consumer~~business travel revenue was above September 2021 quarter levels and continues to exceed pre-pandemic levels, even though capacity has not been fully restored, as consumers continue to return to travel and we believe spending patterns for services are returning to historical levelsimproving compared to ~~spending on goods.~~the June 2022 quarter.

International

International passenger revenue for the ~~September 2022~~June 2023 quarter increased compared to the ~~September 2021~~June 2022 quarter in each geographic ~~region, with~~region. In June 2022, the ~~Atlantic region experiencing~~United States lifted its COVID-19 testing requirement for international travel, which has had a positive impact on international demand. In addition, other countries in our network have removed travel restrictions since that time, resulting in revenue improvement across all international regions.

U.S. consumers continue to show a strong desire for trans-Atlantic travel, driving up revenue during the ~~most significant improvement.~~June 2023 quarter on 35% capacity growth. This demand for travel has been led by leisure destinations in southern Europe and premium product load factor.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2220

Item 2. MD&A - Results of Operations

In November 2021, travel restrictions for fully vaccinated foreign visitors to the United States were lifted. This action made travel to the U.S. by many foreign nationals possible for the first time in 18 months. Further, in June 2022, the United States lifted its testing requirement for international travel. Both of these changes have had a positive impact on international demand.

While many countries have removed or eased travel restrictions, others still maintain international testing requirements and travel restrictions (primarily in the Pacific region), which continue to restrain demand in some markets.

The Atlantic region has shown the greatest recovery of the international regions, despite the ongoing conflict in Ukraine, as western European countries removed or eased travel restrictions earlier in 2022. Revenue in this region surpassed pre-pandemic levels in the September 2022 quarter as consumers continue to show increased desire for trans-Atlantic travel. This has been led by demand for leisure destinations such as Italy, Spain and Greece and improving business demand.

Latin America region revenue ~~was near pre-pandemic levels~~increased during the ~~September 2022~~June 2023 quarter, due to ~~continued~~ strong demand for leisure destinations in ~~Mexico,~~South America and the Caribbean, ~~and Central America. We expect this trend~~in addition to ~~continue during~~continuing the ~~December 2022 quarter as demand for leisure destinations remains strong and travel to South America continues to recover. Also, in the September 2022 quarter, final regulatory approval was granted for~~implementation of our ~~trans-American~~ joint venture ~~agreement~~ with LATAM. This agreement will combine our highly complementary route networks between North and South America, with the goal of providing customers with a seamless travel experience and industry-leading connectivity.

~~The~~ Pacific region ~~continues~~revenue benefited from improved demand for travel to be the ~~most impacted by travel restrictions, although we experienced demand improvement in~~region, particularly to Japan, on increased capacity following the ~~September 2022 quarter following South Korea and Australia re-opening to international tourists earlier in the year and the gradual~~ easing of travel restrictions ~~to Japan.~~

~~Overall, we still expect a lower international revenue environment during~~and the ~~December~~performance of ~~2022 quarter compared to 2019,~~our joint venture with ~~the recovery of international revenue continuing to trail domestic revenue.~~

~~Ticket Validity Flexibility~~

In order to provide our customers more flexibility and time to plan or rebook their travel, we announced in January 2022 that all existing travel credit holders will have until December 31, 2023 to rebook their ticket for travel throughout 2024. Additionally, all Delta customers with upcoming 2022 travel or who purchase a ticket in 2022 will also have the flexibility to rebook their ticket through December 31, 2023, and travel throughout 2024.

We estimate the value of ticket breakage and recognize the related revenue at the scheduled flight date. Our ticket breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior. Given the impact of the COVID-19 pandemic on customer behavior and changes made in ticket validity terms, as well as the elimination of change fees for most tickets, our estimates of revenue that will be recognized from the air traffic liability for unused tickets may vary in future periods.

Korean Air.

Other Revenue


		Three Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)					Three Months Ended June 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2023		2022
Refinery	Refinery	$	1,134	$	872		$	262	30	%			Refinery	$	965	$	1,514		$	(549)	(36)	%
Loyalty program	Loyalty program	655		453			202		45	%			Loyalty program	774		650			124		19	%
Ancillary businesses	Ancillary businesses	249		215			34		16	%			Ancillary businesses	214		206			8		4	%
Miscellaneous	Miscellaneous	233		161			72		45	%			Miscellaneous	248		224			24		11	%
Total other revenue		$	2,271	$	1,701		$	570	34	%
Other revenue													Other revenue	$	2,201	$	2,594		$	(393)	(15)	%

Refinery. ~~This represents refinery~~Refinery sales to third ~~parties. These sales increased $262~~parties decreased $549 million compared to the ~~September 2021 quarter. The increase in third-party refinery sales resulted from higher pricing and production during the September~~June 2022 quarter ~~compared~~due to ~~the September 2021 quarter.~~lower pricing. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery ~~sales recorded in other revenue.~~sales.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 23~~

~~Item 2. MD&A - Results of Operations~~

Loyalty Program. ~~This~~Loyalty program revenue relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for ~~non-travel~~non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. OnRevenues from our relationship with American Express increased compared to the June 2022 quarter, due to continued strength in co-brand card spend and card ~~acquisitions, revenues from our relationship with American Express increased in the September 2022 quarter compared to the September 2021 quarter.~~

~~Ancillary Businesses.~~ ~~This represents revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations.~~acquisitions.

Miscellaneous. ~~This~~Miscellaneous is primarily composed of revenues related to Delta Sky Club lounge access, including access provided to certain American Express cardholders, and codeshare agreements. The volume of these transactions has increased compared to the ~~September 2021~~June 2022 quarter ~~due to~~in line with the ~~ongoing recovery of our business. Our network of Delta Sky Club lounges was fully reopened by the end of July 2021 after some lounges temporarily closed at the onset of the pandemic in 2020.~~

increased capacity.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2421

Item 2. MD&A - Results of Operations

Operating Expense


		Three Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)(1)					Three Months Ended June 30,				Increase (Decrease)		% Increase (Decrease)(1)
(in millions)	(in millions)	2022		2021							(in millions)	2023		2022
Salaries and related costs	Salaries and related costs	$	3,050	$	2,566		$	484	19	%			Salaries and related costs	$	3,692	$	2,955		$	737	25	%
Aircraft fuel and related taxes	Aircraft fuel and related taxes	3,318		1,552			1,766		114	%			Aircraft fuel and related taxes	2,516		3,223			(707)		(22)	%
Ancillary businesses and refinery	Ancillary businesses and refinery	1,349		1,079			270		25	%			Ancillary businesses and refinery	1,173		1,718			(545)		(32)	%
Contracted services	Contracted services	881		634			247		39	%			Contracted services	994		791			203		26	%

Landing fees and other rents	Landing fees and other rents	562		524			38		7	%			Landing fees and other rents	617		546			71		13	%
Aircraft maintenance materials and outside repairs													Aircraft maintenance materials and outside repairs	614		522			92		18	%
Passenger commissions and other selling expenses													Passenger commissions and other selling expenses	651		526			125		24	%
Depreciation and amortization	Depreciation and amortization	538		501			37		7	%			Depreciation and amortization	573		510			63		12	%
Regional carrier expense	Regional carrier expense	528		453			75		17	%			Regional carrier expense	559		528			31		6	%
Aircraft maintenance materials and outside repairs		487		433			54		12	%
Passenger commissions and other selling expenses		546		308			238		77	%
Passenger service	Passenger service	406		226			180		80	%			Passenger service	442		369			73		20	%
Profit sharing													Profit sharing	595		54			541		NM
Aircraft rent	Aircraft rent	131		105			26		25	%			Aircraft rent	132		127			5		4	%
Profit sharing		237		—			237		NM

Government grant recognition		—		(1,822)			1,822		NM

Other	Other	486		390			96		25	%			Other	529		436			93		21	%
Total operating expense	Total operating expense	$	12,519	$	6,949		$	5,570	80	%			Total operating expense	$	13,087	$	12,305		$	782	6	%

(1)Certain variances are labeled as not meaningful ("NM") throughout management's discussion and analysis.

Salaries and Related Costs. WeIn the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%.

Over the past year, we implemented base pay increases for eligible employees of 5% effective April 1, 2023 and 4% effective May 1, 2022. Additionally, we have ~~hired~~ approximately ~~19,000~~9,000 more employees ~~since the September 2021 quarter,~~as of June 30, 2023 than at June 30, 2022, principally in ~~certain areas, including~~in-flight service, flight operations ~~in-flight service, reservations~~ and ~~customer care and airport customer service,~~aircraft maintenance, in order to support the growth in our ~~operations as demand and capacity return. These hiring actions and a 4% base pay increase effective May 1, 2022 for eligible employees resulted in~~operations. Each of these items contributed to the increase in salaries and related costs during the ~~September 2022~~June 2023 quarter compared to the ~~September 2021~~June 2022 quarter.

Aircraft Fuel and Related Taxes. Fuel expense ~~increased $1.8 billion~~decreased $707 million compared to the ~~September 2021~~June 2022 quarter primarily due to ~~an 83% increase~~a 38% decrease in the market price of jet fuel ~~and an 18%~~partially offset by a 16% increase in consumption on a 17% increase in capacity. We expect ~~elevated~~ jet fuel prices ~~in comparison~~ to ~~historical levels to continue during the December 2022 quarter due to current market conditions, further exacerbated by geopolitical events.~~remain volatile throughout 2023.

Additionally, during the September 2022 quarter, we purchased and retired $25 million of carbon offset credits, which relate to a portion of our airline segment's March 2022 quarter carbon emissions. During the September 2021 quarter, we purchased and retired $29 million of carbon offset credits, which related to a portion of our airline segment's 2021 carbon emissions. In the table below, these costs are shown in the carbon offset costs line item.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon	Fuel expense and average price per gallon												Fuel expense and average price per gallon
									Average Price Per Gallon														Average Price Per Gallon
		Three Months Ended September 30,				Increase (Decrease)	Three Months Ended September 30,				Increase (Decrease)			Three Months Ended June 30,				Increase (Decrease)		Three Months Ended June 30,			Increase (Decrease)
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021					2022				2021				(in millions, except per gallon data)			2022		Increase (Decrease)			2023		Increase (Decrease)		2022
Fuel purchase cost(1)	Fuel purchase cost(1)	$	3,449	$	1,601		$	1,848	$	3.71	$	2.03			$	1.68	Fuel purchase cost(1)	$	2,557	$	3,565		$	(1,008)	$	2.56				$	(1.57)
Carbon offset costs		25		29			(4)		0.03		0.04				(0.01)

Fuel hedge impact	Fuel hedge impact	36		19			17		0.04		0.02				0.02		Fuel hedge impact	3		(73)			76		—		(0.08)			0.08
Refinery segment impact	Refinery segment impact	(192)		(97)			(95)		(0.21)		(0.12)				(0.09)		Refinery segment impact	(44)		(269)			225		(0.04)		(0.31)			0.27
Total fuel expense	Total fuel expense	$	3,318	$	1,552		$	1,766	$	3.57	$	1.97			$	1.60	Total fuel expense	$	2,516	$	3,223		$	(707)	$	2.52	$	3.74		$	(1.22)

(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 25~~

~~Item 2. MD&A - Results of Operations~~

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. ~~Increased expenses were primarily related to refinery~~Refinery sales to third ~~parties. The refinery cost of sales increased $262~~parties decreased $549 million compared to the ~~September 2021 quarter. The increase in third-party refinery sales resulted from higher pricing and production during the September~~June 2022 quarter ~~compared~~due to ~~the September 2021 quarter.~~lower pricing.

Contracted Services. During the ~~September 2022~~June 2023 quarter, demand and capacity increased compared to the ~~September 2021~~June 2022 quarter due to the ongoing recovery ~~from the COVID-19 pandemic.~~of our operations. The continued restoration of our operations and associated higher volume-related expenses and inflationary pressures were the primary drivers for the increase in contracted services.

~~Regional Carrier Expense.~~ ~~Regional carrier expense increased compared to the September 2021 quarter due to an increase in utilization and volume-related expenses as a result~~

Delta Air Lines, Inc. | June 2023 Form 10-Q 22

Item 2. MD&A - Results of ~~increased demand.~~Operations

Aircraft Maintenance Materials and Outside Repairs. Maintenance expense increased compared to the ~~September 2021~~June 2022 quarter as we continued to ~~return aircraft to service~~restore our operations and to support our operational reliability.

Passenger Commissions and Other Selling Expenses. Compared to the ~~September 2021~~June 2022 quarter, passenger revenue increased ~~59%~~ in the ~~September 2022~~June 2023 quarter ~~leading to higher volume-related expenses,~~ which was the primary reason for the increase in passenger commissions and other selling expenses.

Passenger Service. Passenger service expenses increased compared to the ~~September 2021~~June 2022 quarter due to higher volume-related expenses associated with increased demand and inflationary pressures.

~~Aircraft Rent.~~Profit Sharing. ~~Aircraft rent~~Profit sharing increased by $541 million compared to the ~~September 2021~~June 2022 quarter due to ~~a shift~~higher projected profitability in ~~the mix of leased aircraft from older, narrowbody aircraft to newer, widebody aircraft.~~

~~Profit Sharing.~~ 2023. Our profit sharing program pays 10% to all eligible employees for the first $2.5 billion of annual pre-tax profit and 20% of annual pre-tax profit above $2.5 billion, as defined by the terms of the program. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items.

~~Government Grant Recognition.~~ Other.~~During the September 2021 quarter, we recognized $1.8 billion of government PSP grant proceeds~~ The increase in other is primarily due to higher volume-related expenses, such as ~~contra-expense that were used exclusively for the payment of~~flight crew and other employee ~~wages, salaries~~travel and ~~benefits.~~incidental costs, associated with increased capacity and inflationary pressures.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2623

Item 2. MD&A - Results of Operations

Results of Operations - ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

Total Operating Revenue


		Nine Months Ended September 30,						Increase (Decrease)	% Increase (Decrease)						Six Months Ended June 30,					Increase (Decrease)			% Increase (Decrease)
(in millions)(1)	(in millions)(1)	2022			2021									(in millions)(1)	2023		2022
Ticket - Main cabin	Ticket - Main cabin	$	15,000		$	7,810			$	7,190		92	%			Ticket - Main cabin	$	11,917		$	9,111			$	2,806		31	%
Ticket - Premium products	Ticket - Premium products	11,005			5,257				5,748			109	%			Ticket - Premium products	9,151			6,648				2,503			38	%
Loyalty travel awards	Loyalty travel awards	2,073			1,213				860			71	%			Loyalty travel awards	1,645			1,287				358			28	%
Travel-related services	Travel-related services	1,251			998				253			25	%			Travel-related services	903			819				84			10	%
Total passenger revenue		$	29,329		$	15,278			$	14,051		92	%
Passenger revenue																Passenger revenue	$	23,616		$	17,865			$	5,751		32	%
Cargo	Cargo	801			728				73			10	%			Cargo	381			561				(180)			(32)	%
Other	Other	7,017			4,423				2,594			59	%			Other	4,340			4,747				(407)			(9)	%
Total operating revenue	Total operating revenue	$	37,147		$	20,429			$	16,718		82	%			Total operating revenue	$	28,337		$	23,173			$	5,164		22	%

TRASM (cents)	TRASM (cents)	21.38		¢	14.31		¢		7.07		¢	49	%			TRASM (cents)	21.74		¢	20.93		¢		0.81		¢	4	%
Third-party refinery sales(2)	Third-party refinery sales(2)	(2.20)			(1.53)				(0.67)			44	%			Third-party refinery sales(2)	(1.44)			(2.44)				1.00			(41)	%

TRASM, adjusted	TRASM, adjusted	19.18		¢	12.78		¢		6.40		¢	50	%			TRASM, adjusted	20.30		¢	18.49		¢		1.81		¢	10	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)TRASM, adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Unless otherwise discussed below, the changes in ~~operating~~total revenue line items, as well as the underlying reasons for these changes, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are consistent with the discussion above under Results of Operations - Three Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022.

Compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, our ~~operating~~total revenue increased ~~$16.7~~$5.2 billion, or ~~82%~~22%, due primarily to ~~the continued recovery~~strength in travel demand ~~from the COVID-19 pandemic~~on higher capacity and higher ~~refinery third party sales.~~yield. The increase in ~~operating~~total revenue, on ~~a 22%~~an 18% increase in capacity, resulted in a ~~49%~~4% increasein TRASM and a ~~50%~~10% increase in TRASM, adjusted compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales recorded in other revenue.~~2022.

Passenger Revenue by Geographic Region


				Increase (Decrease) vs. Nine Months Ended September 30, 2021															Increase (Decrease) vs. Six Months Ended June 30, 2022
(in millions)	(in millions)	Nine Months Ended September 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor		(in millions)	Six Months Ended June 30, 2023		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	Domestic	$	22,035	76	%	35	%	13	%	30	%	56	%	14	pts	Domestic	$	16,538	19	%	10	%	8	%	8	%	10	%	2	pts
Atlantic	Atlantic	4,553		293	%	234	%	121	%	17	%	77	%	28	pts	Atlantic	4,047		81	%	56	%	46	%	16	%	24	%	5	pts
Latin America	Latin America	2,084		59	%	28	%	(5)	%	24	%	68	%	22	pts	Latin America	2,058		44	%	19	%	9	%	21	%	32	%	7	pts
Pacific	Pacific	657		128	%	178	%	(8)	%	(18)	%	147	%	42	pts	Pacific	973		205	%	233	%	105	%	(8)	%	49	%	31	pts
Total	Total	$	29,329	92	%	54	%	22	%	25	%	58	%	17	pts	Total	$	23,616	32	%	22	%	18	%	8	%	12	%	4	pts

Domestic passenger unit revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as a result of the higher levels of capacity and ~~demand~~yield during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 due to ~~the ongoing recovery~~strong demand in the period. International passenger revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 increased ~~164%~~78% on ~~46%~~40% higher capacity compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022 due to U.S. consumer demand for international travel.

Other Revenue


		Nine Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)					Six Months Ended June 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2023		2022
Refinery	Refinery	$	3,835	$	2,189		$	1,646	75	%			Refinery	$	1,882	$	2,700		$	(818)	(30)	%
Loyalty program	Loyalty program	1,877		1,260			617		49	%			Loyalty program	1,500		1,221			279		23	%
Ancillary businesses	Ancillary businesses	665		586			79		13	%			Ancillary businesses	445		416			29		7	%
Miscellaneous	Miscellaneous	640		388			252		65	%			Miscellaneous	513		410			103		25	%
Total other revenue		$	7,017	$	4,423		$	2,594	59	%
Other revenue													Other revenue	$	4,340	$	4,747		$	(407)	(9)	%

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2724

Item 2. MD&A - Results of Operations

Operating Expense


		Nine Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)					Six Months Ended June 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2023		2022
Salaries and related costs	Salaries and related costs	$	8,832	$	7,096		$	1,736	24	%			Salaries and related costs	$	7,078	$	5,782		$	1,296	22	%
Aircraft fuel and related taxes	Aircraft fuel and related taxes	8,633		4,056			4,577		113	%			Aircraft fuel and related taxes	5,192		5,315			(123)		(2)	%
Ancillary businesses and refinery	Ancillary businesses and refinery	4,449		2,724			1,725		63	%			Ancillary businesses and refinery	2,298		3,100			(802)		(26)	%
Contracted services	Contracted services	2,425		1,723			702		41	%			Contracted services	2,004		1,544			460		30	%
Landing fees and other rents	Landing fees and other rents	1,611		1,477			134		9	%			Landing fees and other rents	1,201		1,050			151		14	%
Aircraft maintenance materials and outside repairs													Aircraft maintenance materials and outside repairs	1,199		988			211		21	%
Passenger commissions and other selling expenses													Passenger commissions and other selling expenses	1,152		838			314		37	%
Depreciation and amortization	Depreciation and amortization	1,554		1,494			60		4	%			Depreciation and amortization	1,137		1,016			121		12	%
Regional carrier expense	Regional carrier expense	1,547		1,258			289		23	%			Regional carrier expense	1,117		1,018			99		10	%
Aircraft maintenance materials and outside repairs		1,474		1,014			460		45	%
Passenger commissions and other selling expenses		1,385		640			745		116	%
Pilot agreement and related expenses													Pilot agreement and related expenses	864		—			864		NM
Passenger service	Passenger service	1,050		520			530		102	%			Passenger service	859		644			215		33	%
Profit sharing													Profit sharing	667		54			613		NM
Aircraft rent	Aircraft rent	380		313			67		21	%			Aircraft rent	264		249			15		6	%
Profit sharing		291		—			291		NM

Government grant recognition		—		(4,512)			4,512		NM

Other	Other	1,325		1,003			322		32	%			Other	1,090		840			250		30	%
Total operating expense	Total operating expense	$	34,956	$	18,806		$	16,150	86	%			Total operating expense	$	26,122	$	22,438		$	3,684	16	%

Unless otherwise discussed below, the changes in operating expense line items, as well as the underlying reasons for these changes, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are consistent with the discussion above under Results of Operations - Three Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~

~~Salaries and Related Costs.~~ Salaries and related costs increased compared to the nine months ended September 30, 2021 due to the hiring actions and pay increase discussed above. The increase also relates to the voluntary unpaid leave of absence program we offered in response to the COVID-19 pandemic during 2021. During 2022, we no longer offered these leaves of absence as the program terminated by the end of the September 2021 quarter.2022.

Aircraft Fuel and Related Taxes. Fuel expense ~~increased $4.6 billion~~decreased $123 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 due to ~~a 91% increase~~an 18% decrease in the market price per gallon of jet fuel ~~and~~partially offset by a ~~26%~~17% increase in consumption on ~~a 22%~~an 18% increase in capacity.

Additionally, during the nine months ended September 30, 2022, we purchased and retired $98 million of carbon offset credits, which relate to a portion of our airline segment's 2021 and March 2022 quarter carbon emissions. During the nine months ended September 30, 2021, we purchased and retired $69 million of carbon offset credits, which related to a portion of our airline segment's 2020 and 2021 carbon emissions. In the table below, these costs are shown in the carbon offset costs line item.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon	Fuel expense and average price per gallon												Fuel expense and average price per gallon
									Average Price Per Gallon														Average Price Per Gallon
		Nine Months Ended September 30,				Increase (Decrease)	Nine Months Ended September 30,				Increase (Decrease)			Six Months Ended June 30,				Increase (Decrease)		Six Months Ended June 30,			Increase (Decrease)
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021					2022				2021				(in millions, except per gallon data)			2022		Increase (Decrease)			2023		Increase (Decrease)		2022
Fuel purchase cost(1)	Fuel purchase cost(1)	$	9,091	$	3,781		$	5,310	$	3.57	$	1.87			$	1.70	Fuel purchase cost(1)	$	5,497	$	5,715		$	(218)	$	2.91				$	(0.63)
Carbon offset costs		98		69			29		0.04		0.03				0.01

Fuel hedge impact	Fuel hedge impact	(41)		20			(61)		(0.02)		0.01				(0.03)		Fuel hedge impact	(39)		(77)			38		(0.02)		(0.05)			0.03
Refinery segment impact	Refinery segment impact	(515)		186			(701)		(0.20)		0.09				(0.29)		Refinery segment impact	(266)		(323)			57		(0.14)		(0.20)			0.06
Total fuel expense	Total fuel expense	$	8,633	$	4,056		$	4,577	$	3.39	$	2.00			$	1.39	Total fuel expense	$	5,192	$	5,315		$	(123)	$	2.75	$	3.29		$	(0.54)

(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

Pilot agreement and related expenses. In addition to the items in salaries and related costs above, the recently ratified pilot agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 2825

Item 2. MD&A - Non-Operating Results ~~of Operations~~

~~Ancillary Businesses and Refinery.~~ The changes in ancillary businesses and refinery expenses were primarily related to refinery sales to third parties, which increased by $1.6 billion compared to the nine months ended September 30, 2021.

~~Government Grant Recognition.~~ During the nine months ended September 30, 2021, we recognized $4.5 billion of government PSP grant proceeds as contra-expense that were used exclusively for the payment of employee wages, salaries and benefits.

Non-Operating Results
Three Months Ended September 30, Favorable (Unfavorable) Nine Months Ended September 30, Favorable (Unfavorable)
(in millions) 2022 2021 2022 2021
Interest expense, net $ (248) $ (314) $ 66 $ (791) $ (1,014) $ 223
Equity method results 4 (49) 53 (8) (102) 94
Gain/(loss) on investments, net (245) (223) (22) (613) 251 (864)
Loss on extinguishment of debt (34) (183) 149 (100) (266) 166
Pension and related benefit 73 111 (38) 218 337 (119)
Miscellaneous, net (44) (15) (29) (103) (36) (67)
Total non-operating expense, net $ (494) $ (673) $ 179 $ (1,397) $ (830) $ (567)


	Three Months Ended June 30,				Favorable (Unfavorable)		Six Months Ended June 30,				Favorable (Unfavorable)
(in millions)	2023		2022				2023		2022
Interest expense, net	$	(203)	$	(269)	$	66	$	(430)	$	(543)	$	113

Gain/(loss) on investments, net	128		(221)		349		251		(368)		619
Loss on extinguishment of debt	(29)		(41)		12		(50)		(66)		16
Pension and related (expense)/benefit	(61)		73		(134)		(122)		145		(267)
Miscellaneous, net	(9)		(28)		19		(52)		(70)		18
Total non-operating expense, net	$	(174)	$	(486)	$	312	$	(403)	$	(902)	$	499

Interest expense, net.Interest expense, net includes interest expense and interest income. This decreased compared to the prior year ~~periods~~period as a result of increased interest income and our debt reduction ~~initiatives since the December 2020 quarter.~~initiatives. During ~~2021,~~2022, we made payments of approximately ~~$5.8~~$4.5 billion related to our debt and finance ~~leases,~~lease obligations, which included approximately ~~$3.8~~$2.3 billion ~~for~~of early ~~repayments.~~repayment activity. We have continued to pay down our debt during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 with ~~$4.2~~$3.0 billion of payments on debt and finance lease obligations, including ~~$1.5~~$1.1 billionof ~~certain notes through a cash tender offer in the September 2022 quarter and $839 million~~principal amounts for the early repurchase of various secured and unsecured notes ~~through repurchases~~and a portion of the SkyMiles Term Loan on the open ~~market.~~market and early principal repayments of $585 million on various notes secured by aircraft. Approximately $1.4 billion of the early repurchases and repayments were scheduled to mature after 2023. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled ~~maturities, during the December 2022 quarter and beyond.~~

~~Equity method results.~~ Equity method results in 2022 consist of our share of Aeroméxico's net results and in 2021 reflected our share of Virgin Atlantic's net losses. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity method investments.maturities.

Gain/(loss) on investments, net. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity investments measured at fair value on a recurring basis.

Loss on extinguishment of debt. Loss on extinguishment of debt reflects the losses incurred in the early repayment of the notes mentioned above.

Pension and related (expense)/benefit. Pension and related (expense)/benefit reflects the net periodic ~~benefit/~~(cost)/benefit of our pension and other postretirement and postemployment benefit plans. ~~Based~~The unfavorable year-over-year change in pension and related (expense)/benefit results from lower expected return on ~~our funded status~~plan assets during 2023. This is due to lower plan asset balances as of December 31, 2022, compared to December 31, 2021, ~~we have modified~~primarily resulting from investment value declines in 2022 consistent with the strategic asset allocation mix to reduce the investment risk of the portfolio. As a result of the lower risk profile of the portfolio, the weighted average expected long-term rate of return on our defined benefit pension plan assets for 2022 net periodic benefit cost is 7.0%.broader stock market.

Miscellaneous, net. Miscellaneous, net primarily includes foreign exchange gains/(losses), charitable contributions and ~~charitable contributions.~~our share of our equity method investments net results.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 29~~

~~Item 2. MD&A - Income Taxes~~

Income Taxes

We project ~~that~~ our annual effective tax rate for ~~2022~~2023 will be between ~~28%~~22% and ~~30%~~25%. Our effective tax rate in 2023 may be impacted by mark-to-market adjustments on our equity investments. In certain interim periods, we may have adjustments to our net deferred tax assets as a result of changes in prior year estimates, changes in our mark-to-market equity investments and tax laws enacted during the period, which will impact the effective tax rate for that interim period.

The Inflation Reduction Act ("IRA") was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently-completed three-year period exceeds $1.0 billion. This provision is effective for tax years beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have a material impact on our reported results, cash flows or financial position when it becomes effective.

Refinery Segment

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges the non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. ~~Historically, the~~The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery provided approximately 200,000 barrels per day, or approximately 75% of our ~~pre-COVID-19 pandemic~~ consumption, for use in our airline operations.

~~During the three and nine months ended September 30, 2022, the refinery operated at near pre-pandemic production levels and a summary of the refinery results is shown below.~~

Delta Air Lines, Inc. | June 2023 Form 10-Q 26

Item 2. MD&A - Refinery Segment


Refinery segment financial information
	Three Months Ended June 30,				Increase (Decrease)		Six Months Ended June 30,				Increase (Decrease)
(in millions, except per gallon data)	2023		2022				2023		2022
Exchange products	$	618	$	982	$	(364)	$	1,330	$	1,791	$	(461)
Sales of refined products	89		96		(7)		215		122		93
Sales to airline segment	365		761		(396)		961		1,053		(92)
Third party refinery sales	965		1,514		(549)		1,882		2,700		(818)
Operating revenue	$	2,037	$	3,353	$	(1,316)	$	4,388	$	5,666	$	(1,278)

Operating income	$	44	$	269	$	(225)	$	266	$	323	$	(57)
Refinery segment impact on airline average price per fuel gallon	$	(0.04)	$	(0.31)	$	0.27	$	(0.14)	$	(0.20)	$	0.06

Refinery segment financial information
Three Months Ended September 30, Increase (Decrease) Nine Months Ended September 30, Increase (Decrease)
(in millions, except per gallon data) 2022 2021 2022 2021
Exchange products $ 834 $ 629 $ 205 $ 2,623 $ 1,667 $ 956
Sales of refined products 127 12 115 250 29 221
Sales to airline segment 504 183 321 1,557 292 1,265
Third party refinery sales 1,134 872 262 3,835 2,189 1,646
Operating revenue $ 2,599 $ 1,696 $ 903 $ 8,265 $ 4,177 $ 4,088
Operating income/(loss) $ 192 $ 97 $ 95 $ 515 $ (186) $ 701
Refinery segment impact on airline average price per fuel gallon $ (0.21) $ (0.12) $ (0.09) $ (0.20) $ 0.09 $ (0.29)

~~Refinery revenues increased compared to the three and nine months ended September 30, 2021 due primarily to higher pricing and production.~~ The refinery generated ~~higher~~lower operating income in the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, which was driven by~~2022, as a result of lower pricing.

Starting in mid-September 2023, the ~~revenue and production increases described~~refinery is scheduled to complete a planned maintenance event ("turnaround") that is performed once every five years in ~~the Results of Operations section above, and partially offset by higher crude oil acquisition costs and increased expense associated~~accordance with the ~~higher levels~~long-term maintenance plan of the facility to allow for safe completion of major repairs and upgrades. The turnaround is expected to take approximately two months and during this time there will be no production. at the refinery.

A refinery is subject to annual U.S. Environmental Protection Agency ("EPA") requirements to blend renewable fuels into the gasoline and on-road diesel fuel it produces. Alternatively, a refinery may purchase ~~Renewable Identification Numbers ("RINs")~~RINs from third parties in the secondary market. The Monroe refinery purchases the majority of its RINs in the secondary market. Observable RINs prices ~~increased during much~~declined slightly since the beginning of ~~2022~~2023 through June 30, 2023 and Monroe incurred ~~$140~~$105 million and ~~$448~~$207 million in RINs compliance costs during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively, compared to ~~$44~~$223 million and ~~$453~~$308 million in the three and ~~nine~~six months ended ~~September~~June 30, 2021, respectively. The higher expense in the three months ended September 30, 2022 resulted from a larger increase in observable RINs prices during that period compared to the increase in the 2021 period.2022.

~~At September~~As of June 30, ~~2022,~~2023 we had ano net fair value obligation ~~of $291 million related to RINs compliance costs.~~outstanding. Our obligation ~~as of September 30, 2022 was~~is calculated using the Renewable Fuel Standard ("RFS") volume requirements, which were finalized in 2022 for the ~~June~~2021 and 2022 ~~quarter. The~~obligations, and proposed in 2022 for 2023 obligations. In the March 2023 quarter, we settled a portion of our 2021 RINs obligation with the EPA. We expect to settle the remaining 2021 and our entire 2022 RINs obligation by the 2022 compliance ~~deadlines to retire our obligations for 2020 and 2021 are~~deadline in the ~~fourth quarter of 2022 and first quarter of~~December 2023 ~~respectively.~~quarter.

For more information regarding the refinery's results, see Note 9 of the Notes to the Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3027

Item 2. MD&A - Operating Statistics

Operating Statistics
Three Months Ended September 30, 2022 vs. 2021 Increase
(Decrease) 2022 vs. 2019 Increase
(Decrease)
Consolidated(1)
2022 2021 2019
Revenue passenger miles (in millions) ("RPM") 54,786 43,057 66,862 27 % (18) %
Available seat miles (in millions) ("ASM") 63,007 54,083 75,742 17 % (17) %
Passenger mile yield 20.93 ¢ 16.70 ¢ 17.07 ¢ 25 % 23 %
Passenger revenue per available seat mile ("PRASM") 18.19 ¢ 13.30 ¢ 15.06 ¢ 37 % 21 %
Total revenue per available seat mile ("TRASM") 22.18 ¢ 16.93 ¢ 16.58 ¢ 31 % 34 %
TRASM, adjusted(2)
20.38 ¢ 15.31 ¢ 16.51 ¢ 33 % 23 %
Cost per available seat mile ("CASM") 19.87 ¢ 12.85 ¢ 13.85 ¢ 55 % 43 %
CASM-Ex(2)
12.43 ¢ 11.67 ¢ 10.15 ¢ 7 % 22.5 %
Passenger load factor 87 % 80 % 88 % 7 pts (1) pt
Fuel gallons consumed (in millions) 930 789 1,154 18 % (19) %
Average price per fuel gallon(3)
$ 3.57 $ 1.97 $ 1.94 81 % 84 %
Average price per fuel gallon, adjusted(2)(3)
$ 3.53 $ 1.94 $ 1.96 82 % 80 %


	Three Months Ended June 30,						% Increase (Decrease)
Consolidated(1)	2023			2022
Revenue passenger miles (in millions) ("RPM")	60,804			51,519				18	%
Available seat miles (in millions) ("ASM")	68,993			58,903				17	%
Passenger mile yield	21.72		¢	21.27		¢		2	%
Passenger revenue per available seat mile ("PRASM")	19.14		¢	18.60		¢		3	%
Total revenue per available seat mile ("TRASM")	22.58		¢	23.47		¢		(4)	%
TRASM, adjusted(2)	21.18		¢	20.90		¢		1	%
Cost per available seat mile ("CASM")	18.97		¢	20.89		¢		(9)	%
CASM-Ex(2)	13.06		¢	12.76		¢		2	%

Passenger load factor	88		%	87		%		1	pt
Fuel gallons consumed (in millions)	997			863				16	%
Average price per fuel gallon(3)	$	2.52		$	3.74			(33)	%
Average price per fuel gallon, adjusted(2)(3)	$	2.52		$	3.82			(34)	%


		Nine Months Ended September 30,			2022 vs. 2021 Increase (Decrease)				2022 vs. 2019 Increase (Decrease)										Six Months Ended June 30,			% Increase (Decrease)
Consolidated(1)	Consolidated(1)	2022	2021	2019											Consolidated(1)				2023		2022
Revenue passenger miles (in millions) ("RPM")	Revenue passenger miles (in millions) ("RPM")					145,004			94,290			181,652			54	%	(20)	%		Revenue passenger miles (in millions) ("RPM")			110,491			90,218			22	%
Available seat miles (in millions) ("ASM")	Available seat miles (in millions) ("ASM")					173,720			142,730			209,911			22	%	(17)	%		Available seat miles (in millions) ("ASM")			130,345			110,713			18	%
Passenger mile yield	Passenger mile yield					20.23		¢	16.20		¢	17.63		¢	25	%	15	%		Passenger mile yield			21.37		¢	19.80		¢	8	%
Passenger revenue per available seat mile ("PRASM")	Passenger revenue per available seat mile ("PRASM")					16.88		¢	10.70		¢	15.26		¢	58	%	11	%		Passenger revenue per available seat mile ("PRASM")			18.12		¢	16.14		¢	12	%
Total revenue per available seat mile ("TRASM")	Total revenue per available seat mile ("TRASM")					21.38		¢	14.31		¢	16.94		¢	49	%	26	%		Total revenue per available seat mile ("TRASM")			21.74		¢	20.93		¢	4	%
TRASM, adjusted(2)	TRASM, adjusted(2)					19.18		¢	12.78		¢	16.83		¢	50	%	14	%		TRASM, adjusted(2)			20.30		¢	18.49		¢	10	%
Cost per available seat mile ("CASM")	Cost per available seat mile ("CASM")					20.12		¢	13.18		¢	14.46		¢	53	%	39	%		Cost per available seat mile ("CASM")			20.04		¢	20.27		¢	(1)	%
CASM-Ex(2)	CASM-Ex(2)					12.78		¢	11.96		¢	10.66		¢	7	%	20	%		CASM-Ex(2)			13.44		¢	12.98		¢	4	%

Passenger load factor	Passenger load factor					83		%	66		%	87		%	17	pts	(4)	pts		Passenger load factor			85		%	81		%	4	pts
Fuel gallons consumed (in millions)	Fuel gallons consumed (in millions)					2,543			2,023			3,215			26	%	(21)	%		Fuel gallons consumed (in millions)			1,885			1,613			17	%
Average price per fuel gallon(3)	Average price per fuel gallon(3)					$	3.39		$	2.00		$	2.03		70	%	67	%		Average price per fuel gallon(3)			$	2.75		$	3.29		(16)	%
Average price per fuel gallon, adjusted(2)(3)	Average price per fuel gallon, adjusted(2)(3)					$	3.41		$	1.99		$	2.02		71	%	69	%		Average price per fuel gallon, adjusted(2)(3)			$	2.77		$	3.34		(17)	%

(1)Includes the operations of our regional carriers under capacity purchase agreements.

(2)Non-GAAP financial measures defined and reconciled to TRASM, CASM and average fuel price per gallon, respectively, in "Supplemental Information" below.

(3)Includes the impact of fuel hedge activity and refinery segment ~~results and carbon offset costs.~~

results.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3128

Item 2. MD&A - Fleet Information

Fleet Information

Our operating aircraft fleet, purchase commitments and options at ~~September~~June 30, ~~2022~~2023 are summarized in the following table.


Mainline aircraft information by fleet type	Mainline aircraft information by fleet type								Mainline aircraft information by fleet type
		Current Fleet(1)					Commitments(1)			Current Fleet(1)					Commitments
Fleet Type	Fleet Type	Owned	Finance Lease	Operating Lease	Total	Average Age (Years)	Purchase	Options	Fleet Type	Owned	Finance Lease	Operating Lease	Total	Average Age (Years)	Purchase	Options
A220-100	A220-100	41	4	—	45	2.8			A220-100	41	4	—	45	3.5
A220-300	A220-300	12	—	—	12	1.5	50	38	A220-300	16	—	—	16	1.7	70	14
A319-100	A319-100	57	—	—	57	20.6			A319-100	57	—	—	57	21.3
A320-200	A320-200	61	—	—	61	27.1			A320-200	61	—	—	61	27.8
A321-200	A321-200	69	22	36	127	3.8			A321-200	63	22	42	127	4.5
A321-200neo	A321-200neo	8	—	—	8	0.3	147	70	A321-200neo	35	—	—	35	0.5	120	70
A330-200	A330-200	11	—	—	11	17.5			A330-200	11	—	—	11	18.2
A330-300	A330-300	28	—	3	31	13.7			A330-300	28	—	3	31	14.4
A330-900neo	A330-900neo	10	3	5	18	1.6	20		A330-900neo	14	3	5	22	1.9	17
A350-900	A350-900	15	—	11	26	4.2	18		A350-900	17	—	11	28	4.6	16
B-717-200	B-717-200	10	50	4	64	21.3			B-717-200	10	57	2	69	21.8
B-737-800	B-737-800	73	4	—	77	21.1			B-737-800	73	4	—	77	21.8
B-737-900ER	B-737-900ER	109	2	49	160	6.7	3		B-737-900ER	113	1	49	163	7.5
B-737-10	B-737-10	—	—	—	—	—	100	30	B-737-10	—	—	—	—	—	100	30
B-757-200	B-757-200	100	—	—	100	25.2			B-757-200	100	—	—	100	25.9
B-757-300	B-757-300	16	—	—	16	19.6			B-757-300	16	—	—	16	20.4
B-767-300ER	B-767-300ER	45	—	—	45	26.6			B-767-300ER	45	—	—	45	27.3
B-767-400ER	B-767-400ER	21	—	—	21	21.8			B-767-400ER	21	—	—	21	22.5
Total	Total	686	85	108	879	14.5	338	138	Total	721	91	112	924	14.6	323	114

(1)Includes both active and temporarily parked aircraft. Excludes certain aircraft we own or lease or that are operated by regional carriers on our behalf shown in the table below.

The table below summarizes the aircraft operated by regional carriers on our behalf at ~~September~~June 30, ~~2022.~~2023. In the June 2023 quarter, we retired all remaining CRJ-200 aircraft from service.


Regional aircraft information by fleet type and carrier	Regional aircraft information by fleet type and carrier							Regional aircraft information by fleet type and carrier
		Fleet Type(1)							Fleet Type(1)
Carrier	Carrier	CRJ-200	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total	Carrier	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total
Endeavor Air, Inc.(2)	Endeavor Air, Inc.(2)	30	18	123	—	—	171	Endeavor Air, Inc.(2)	18	123	—	—	141
SkyWest Airlines, Inc.	SkyWest Airlines, Inc.	9	6	44	—	76	135	SkyWest Airlines, Inc.	6	38	—	83	127
Republic Airways, Inc.	Republic Airways, Inc.	—	—	—	11	46	57	Republic Airways, Inc.	—	—	11	46	57
Total	Total	39	24	167	11	122	363	Total	24	161	11	129	325

(1)Includes both active and temporarily parked aircraft. We own 205 and have operating leases for three of these regional aircraft. The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.

(2)Endeavor Air, Inc. is a wholly owned subsidiary of Delta.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3229

Item 2. MD&A - Financial Condition and Liquidity

Financial Condition and Liquidity

As of ~~September~~June 30, ~~2022,~~2023, we had ~~$11.2~~$8.8 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount ~~committed and~~ available ~~to be drawn~~ under our revolving credit facilities ("liquidity"). We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents, short-term investments ~~restricted cash equivalents~~ and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Undrawn Lines of Credit. As of June 30, 2023, we had approximately $2.8 billion undrawn and available under our revolving credit facilities. In addition, we had approximately $400 million outstanding letters of credit as of June 30, 2023 that did not affect the availability of our revolving credit facilities.

Sources and Uses of Liquidity

Operating Activities

We generated cash flows from operations of ~~$5.2~~$4.8 billion and ~~$2.7~~$4.3 billion in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. We expect to continue generating positive cash flows from operations during the ~~December 2022 quarter.~~remainder of 2023.

Our operating cash flow is impacted by the following factors:

Seasonality of Advance Ticket Sales. We sell tickets for air travel in advance of the customer's travel date. When we receive a cash payment at the time of sale, we record the cash received on advance sales as deferred revenue in air traffic liability. The air traffic liability typically increases during the winter and spring months as advance ticket sales grow prior to the summer peak travel season and decreases during the summer and fall months.

~~From the onset of the COVID-19 pandemic~~ We continue to see a shift in the March 2020 quarter through 2021, reduced demand for air travel resulted in a lower level of advance bookings and the associated cash received than we had historically experienced, which had been impacting the typical seasonal trend of air traffic liability. However, demand has improved during 2022 as consumers have regained confidence to travel and increased ticket purchases for travelcustomers purchasing flights further in advance. Air traffic liability decreased during the September 2022 quarter, as is typical with our usual seasonal trend. Our air traffic liability remains above historical levels with no material change to the travel credit balanceadvance compared to ~~December 31, 2021.~~historical patterns, enhancing the positive cash flow from advance ticket sales.

Fuel. Fuel expense represented approximately ~~25%~~20% and ~~22%~~24% of our total operating expense for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. ~~The~~Although the average fuel price per gallon ~~increased substantially~~decreased during the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023, fuel costs remain high compared to historical levels. We expect ~~elevated~~ jet fuel prices ~~in comparison~~ to ~~historical levels to continue during the December 2022 quarter due to current market conditions, further exacerbated by geopolitical events.~~remain volatile throughout 2023. Fuel consumption was also higher during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to the prior year period due to the increase in capacity. We expect that fuel consumption will continue to increase ~~during the December 2022 quarter,~~throughout 2023 compared to ~~2021,~~2022, as we ~~return closer~~plan for our full year system capacity to ~~pre-pandemic levels of capacity,~~continue to increase in comparison to 2022, partially offset by increases in the fuel efficiency of our fleet.

~~New York-JFK Airport Expansion.~~Profit Sharing. ~~During 2021, the Port Authority of New York and New Jersey ("Port Authority") approved modified project plans to renovate and expand Terminal 4~~Our broad-based employee profit sharing program provides that for each year in ~~order to facilitate Delta's relocation from Terminal 2 and consolidation of its operations into the single facility. The project will add 10 new gates and other complementary facilities, including~~which we have an ~~additional Delta Sky Club and a new Delta One lounge. The project is estimated to cost approximately $1.5 billion and will be funded primarily with bonds issued in April 2022~~annual pre-tax profit, as defined by the New York Transportation Development Corporation ("NYTDC") for which our landlord, JFK International Air Terminal LLC, is the obligor. In April 2022, we amended our sublease to provide for the expansion project, including the adjustment of our subleased space and rentals. Based on our assessmentterms of the project, we concluded that we do not control the underlying assets being constructed, and therefore, we do not have the project asset or related obligation recorded on our balance sheet. The majority of project costs are being used to expand or modify Delta's leased premises, and thus will increase Delta's lease liability whichprogram, we will pay ~~via rent through 2043. Construction started in late 2021, with Delta's~~a specified portion of that profit to employees. In determining the ~~project estimated~~amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the six months ended June 30, 2023, we accrued $667 million in profit sharing expense based on the year-to-date performance and current expectations for 2023 profit.

We paid $563 million in profit sharing in February 2023 related to ~~be complete by~~our 2022 pre-tax profit in recognition of our employees' contributions toward achieving the ~~end~~year's financial results.

Pilot Agreement Payment. In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of ~~2023.~~18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million.

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card companies, hotels, car rental agencies and ridesharing companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Total cash sales to American Express were $3.4 billion in the six months ended June 30, 2023, an increase of approximately 30% compared to the prior year period.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3330

Item 2. MD&A - Financial Condition and Liquidity

Investing Activities

Short-Term Investments. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, we ~~redeemed~~purchased a net of ~~$2.0 billion~~$50 million in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Capital Expenditures. Our capital expenditures were ~~$4.2~~$2.5 billion and ~~$2.0~~$2.7 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Our capital expenditures are primarily related to the purchases of aircraft, airport construction projects, fleet modifications and technology enhancements.

We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Excluding the New York-LaGuardia airport project discussed below, our expected ~~2022~~2023 capital spend of approximately ~~$5.7~~$5.5 billion will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements and may vary depending on financing decisions.

New York-LaGuardia Redevelopment. As part of the terminal redevelopment project at LaGuardia Airport, we are partnering with the Port Authority to replace Terminals C and D with a new state-of-the-art terminal facility. ~~Completion~~Construction is ongoing and is being phased to limit passenger inconvenience. Due to an acceleration effort that commenced in 2020, completion is expected by 2025. ~~In June 2022, we achieved a significant milestone by opening the 455,000 square foot headhouse, the terminal roadways and Concourse E - the second of four new concourses to be built.Additionally, in early October, we opened four of 12 planned new gates on Concourse F.Construction is approximately 75% complete and will continue to be phased to support airline operations while minimizing customer inconvenience.~~

We currently expect our net project costs to be approximately ~~$3.5~~$4.3 billion and we bear the risks of project construction, including any potential cost over-runs. Using funding primarily provided by existing financing arrangements and other sources of funding, we expect to spend approximately ~~$670~~$500 million on this project during ~~2022,~~2023, of which ~~$534~~$213 million was incurred in the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023.

Los Angeles International Airport ("LAX"). ~~The City of Los Angeles (the "City") owns and operates LAX and we~~We have an ongoing terminal redevelopment project at LAX to modernize, update and provide post-security connection to Terminals 2 and 3. In April 2022, we reached the next major phasing milestone of the project with the opening of a new consolidated headhouse for both terminals, which includes ticketing, security, baggage claim and a new Delta Sky Club lounge. In May, we opened the Terminal 3 concourse with the initial three of 14 planned new gates. Additionally, in early October, we opened the Terminal 3 satellite with eight planned new gates for a total of 11 of 14 planned new gates now open in Terminal 3. Construction is expected to be completed inby the end of 2023 with a total cost of approximately ~~$2.3~~$2.4 billion. A substantial majority of the project costs are being funded through the Regional Airports Improvement Corporation ("RAIC"), a California public benefit corporation, using a revolving credit facility provided by a group of lenders. ~~The credit facility was executed in 2017 and we~~We have guaranteed the obligations of the RAIC under the credit ~~facility. The~~facility and the revolving credit facility agreement was most recently amended in ~~January 2022, increasing~~the March 2023 quarter, decreasing the revolver capacity ~~from $800 million~~ to ~~$1.1 billion.~~$700 million. In ~~September 2022,~~the June 2023 quarter, the revolving credit facility agreement capacity was reduced to ~~$800~~$626 million. ~~Loans made under the credit facility are being repaid with the proceeds from the City's purchase of completed project assets.~~

Financing Activities

Debt and Finance Leases. In the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, we had cash outflows of ~~$4.2~~$3.0 billion related to repayments of our debt and finance lease obligations, including ~~$1.5~~$1.1 billionof ~~certain notes through a cash tender offer in the September 2022 quarter and $839 million~~principal amounts for the early repurchase of various secured and unsecured notes ~~through repurchases~~and a portion of the SkyMiles Term Loan on the open ~~market.~~market and early principal repayments of $585 million on various notes secured by aircraft. Approximately $1.4 billion of the early repurchases and repayments were scheduled to mature after 2023. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled ~~maturities, during~~maturities. In the ~~December 2022~~March 2023 quarter, both Fitch and ~~beyond.~~S&P credit rating agencies upgraded the debt rating outlooks for Delta to stable and positive, respectively.

The principal amount of our debt and finance leases was ~~$23.4~~$20.3 billion at ~~September~~June 30, ~~2022.~~2023.

~~Undrawn Lines~~Capital Return to Shareholders. On June 15, 2023, the Board of ~~Credit~~Directors approved and we will pay a quarterly dividend of $0.10 per share on August 7, 2023 to shareholders of record as of July 17, 2023.

As of September 30, 2022, we had approximately $2.8 billion undrawn and available under our revolving credit facilities. In addition, we had approximately $300 million outstanding letters of credit as of September 30, 2022 that did not affect the availability of our revolving credit facilities.

Covenants.

~~Delta Air Lines, Inc. September 2022 Form 10-Q 34~~

~~Item 2. MD&A - Financial Condition and Liquidity~~

~~Covenants~~

We were in compliance with the covenants in our debt agreements at ~~September~~June 30, ~~2022.~~2023.

Critical Accounting Estimates

~~Except as set forth below, for information regarding~~There have been no material changes in our Critical Accounting Estimates ~~see~~from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.

~~Goodwill and Indefinite-Lived Intangible Assets~~

~~Identifiable Intangible Assets.~~ In the September 2022 quarter, final regulatory approval was granted for our trans-American joint venture agreement with LATAM. This agreement will combine our highly complementary route networks between North and South America, with the goal of providing customers with a seamless travel experience and industry-leading connectivity. Approval was granted for a 10-year period with a subsequent reassessment and extension process. This agreement supports our strategic partnership with LATAM and the value of our $1.2 billion alliance-related indefinite-lived intangible asset. We believe the LATAM joint venture agreement will generate growth opportunities, building upon Delta's and LATAM's global footprint and joint ventures.

~~Defined Benefit Pension Plans~~

~~Recent Accounting Standards~~

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3531

Item 2. MD&A - Supplemental Information

Supplemental Information

We sometimes use information (non-GAAP financial measures) that is derived from the Condensed Consolidated Financial Statements, but that is not presented in accordance with GAAP. Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

Included below are reconciliations of non-GAAP measures used within this Form 10-Q to the most directly comparable GAAP financial measures. Reconciliations below may not calculate exactly due to rounding. These reconciliations include certain adjustments to GAAP measures ~~that are directly related to the impact of COVID-19 and our response. These adjustments are made~~ to provide comparability between the reported periods, if applicable, asand for the reasons indicated below:

•~~Restructuring charges.~~Third-party refinery sales. ~~During 2020, we recorded restructuring charges for items such as fleet impairments~~Refinery sales to third parties, and ~~voluntary early retirement and separation programs following strategic business decisions in response~~related expenses, are not related to our airline segment. Excluding these sales therefore provides a more meaningful comparison of our airline operations to the COVID-19 pandemic. In the September 2022 quarter, we recognized $1 million of net adjustments to certain of those restructuring charges, representing changes in our estimates, compared to $33 million of net adjustments in the September 2021 quarter.

•~~Government grant recognition.~~ ~~We recognized $1.8 billion and $4.5 billion~~rest of the grant proceeds from the payroll support program extensions as contra-expense during the September 2021 quarter and nine months ended September 2021, respectively. We recognized the grant proceeds as contra-expense based on the periods that the funds were intended to compensate and have fully used all proceeds from the payroll support program extensions.airline industry.

~~We also regularly adjust certain GAAP measures for the following items, if applicable, for the reasons indicated below:~~

•MTM adjustments and settlements on hedges. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period, and therefore we remove this impact to allow investors to better understand and analyze our core performance. Settlements represent cash received or paid on hedge contracts settled during the applicable period.

•~~Third-party refinery sales.~~Restructuring charges. ~~Refinery sales~~During 2020, we recorded restructuring charges for items such as fleet impairments and voluntary early retirement and separation programs following strategic business decisions in response to ~~third parties,~~the COVID-19 pandemic. During 2022, we recognized adjustments to certain of those restructuring charges, representing changes in our estimates.

•Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and ~~related expenses, are not related to~~analyze our ~~airline segment. Excluding these sales therefore~~recurring cost performance and provides a more meaningful comparison of our ~~airline operations~~core operating costs to ~~the rest of~~ the airline industry.

•One-time pilot agreement expenses. In the March 2023 quarter, Delta ~~Private Jets adjustment.~~ ~~Because~~pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we ~~combined Delta Private Jets with Wheels Up in January 2020, we have excluded the impact~~recorded adjustments to other benefit-related items of ~~Delta Private Jets from 2019 results~~approximately $130 million. Adjusting for ~~comparability.~~these expenses allows investors to better understand and analyze our core cost performance.

•Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.

•~~Profit sharing.~~ We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.

Operating expense, adjusted reconciliation
Three Months Ended September 30,
(in millions) 2022 2021 2019
Operating expense $ 12,519 $ 6,949 $ 10,489
Adjusted for:
Restructuring charges (1) (33) —
Government grant recognition — 1,822 —
MTM adjustments and settlements on hedges (36) (19) 25
Third-party refinery sales (1,134) (872) (6)
Delta Private Jets adjustment — — (49)
Operating expense, adjusted $ 11,348 $ 7,846 $ 10,460


Total revenue, adjusted reconciliation
	Three Months Ended June 30,
(in millions)	2023		2022
Total revenue	$	15,578	$	13,824
Adjusted for:
Third-party refinery sales	(965)		(1,514)
Total revenue, adjusted	$	14,613	$	12,311

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3632

Item 2. MD&A - Supplemental Information

Fuel expense, adjusted reconciliation
Average Price Per Gallon
Three Months Ended September 30, Three Months Ended September 30,
(in millions, except per gallon data) 2022 2021 2019 2022 2021 2019
Total fuel expense $ 3,318 $ 1,552 $ 2,239 $ 3.57 $ 1.97 $ 1.94
Adjusted for:
MTM adjustments and settlements on hedges (36) (19) 25 (0.04) (0.02) 0.02
Delta Private Jets adjustment — — (7) — — (0.01)
Total fuel expense, adjusted $ 3,282 $ 1,533 $ 2,257 $ 3.53 $ 1.94 $ 1.96
Average Price Per Gallon
Nine Months Ended September 30, Nine Months Ended September 30,
(in millions, except per gallon data) 2022 2021 2019 2022 2021 2019
Total fuel expense $ 8,633 $ 4,056 $ 6,508 $ 3.39 $ 2.00 $ 2.03
Adjusted for:
MTM adjustments and settlements on hedges 41 (20) 8 0.02 (0.01) —
Delta Private Jets adjustment — — (22) — — (0.01)
Total fuel expense, adjusted $ 8,674 $ 4,037 $ 6,494 $ 3.41 $ 1.99 $ 2.02


Operating expense, adjusted reconciliation
	Three Months Ended June 30,
(in millions)	2023		2022
Operating expense	$	13,087	$	12,305
Adjusted for:

MTM adjustments and settlements on hedges	(3)		73
Third-party refinery sales	(965)		(1,514)

Restructuring charges	—		1

Operating expense, adjusted	$	12,119	$	10,866

TRASM, adjusted reconciliation
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2019 2022 2021 2019
TRASM (cents) 22.18 ¢ 16.93 ¢ 16.58 ¢ 21.38 ¢ 14.31 ¢ 16.94 ¢
Adjusted for:
Third-party refinery sales (1.80) (1.61) (0.01) (2.20) (1.53) (0.05)
Delta Private Jets adjustment — — (0.06) — — (0.07)
TRASM, adjusted 20.38 ¢ 15.31 ¢ 16.51 ¢ 19.18 ¢ 12.78 ¢ 16.83 ¢


Fuel expense, adjusted reconciliation
						Average Price Per Gallon
	Three Months Ended June 30,				Three Months Ended June 30,
(in millions, except per gallon data)	2023		2022			2023		2022
Total fuel expense	$	2,516	$	3,223		$	2.52	$	3.74
Adjusted for:
MTM adjustments and settlements on hedges	(3)		73			—		0.08

Total fuel expense, adjusted	$	2,513	$	3,296		$	2.52	$	3.82

						Average Price Per Gallon
	Six Months Ended June 30,				Six Months Ended June 30,
(in millions, except per gallon data)	2023		2022			2023		2022
Total fuel expense	$	5,192	$	5,315		$	2.75	$	3.29
Adjusted for:
MTM adjustments and settlements on hedges	39		77			0.02		0.05

Total fuel expense, adjusted	$	5,231	$	5,392		$	2.77	$	3.34

CASM-Ex reconciliation
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2019 2022 2021 2019
CASM (cents) 19.87 ¢ 12.85 ¢ 13.85 ¢ 20.12 ¢ 13.18 ¢ 14.46 ¢
Adjusted for:
Restructuring charges — (0.06) — — — —
Government grant recognition — 3.37 — — 3.16 —
Aircraft fuel and related taxes (5.26) (2.87) (2.96) (4.97) (2.84) (3.10)
Third-party refinery sales (1.80) (1.61) (0.01) (2.20) (1.53) (0.05)
Profit sharing (0.38) — (0.68) (0.17) — (0.60)
Delta Private Jets adjustment — — (0.05) — — (0.06)
CASM-Ex 12.43 ¢ 11.67 ¢ 10.15 ¢ 12.78 ¢ 11.96 ¢ 10.66 ¢


TRASM, adjusted reconciliation
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022			2023		2022
TRASM (cents)	22.58	¢	23.47	¢		21.74	¢	20.93	¢
Adjusted for:
Third-party refinery sales	(1.40)		(2.57)			(1.44)		(2.44)

TRASM, adjusted	21.18	¢	20.90	¢		20.30	¢	18.49	¢


CASM-Ex reconciliation
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022			2023		2022
CASM (cents)	18.97	¢	20.89	¢		20.04	¢	20.27	¢
Adjusted for:

Aircraft fuel and related taxes	(3.65)		(5.47)			(3.98)		(4.80)
Third-party refinery sales	(1.40)		(2.57)			(1.44)		(2.44)
Profit sharing	(0.86)		(0.09)			(0.51)		(0.05)
One-time pilot agreement expenses	—		—			(0.66)		—
Restructuring charges	—		—			—		0.01

CASM-Ex	13.06	¢	12.76	¢		13.44	¢	12.98	¢

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3733

Item 2. MD&A - Supplemental Information

Free Cash Flow

The following table shows a reconciliation of net cash provided by operating and investing activities (GAAP measures) to free cash flow (a non-GAAP financial measure). We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include:

•Net redemptions of short-term investments. Net redemptions of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations.

•Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects.

•Financed aircraft acquisitions. This adjustment reflects aircraft deliveries that are leased as capital expenditures. The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities.


Free cash flow reconciliation
	Three Months Ended June 30,
(in millions)	2023
Net cash provided by operating activities	$	2,609
Net cash used in investing activities	(1,382)
Adjusted for:
Net redemptions of short-term investments	(51)

Net cash flows related to certain airport construction projects and other	81
Financed aircraft acquisitions	(162)

Free cash flow	$	1,094

Delta Air Lines, Inc. | June 2023 Form 10-Q 34

Item 3. Market Risk

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of ~~September~~June 30, ~~2022~~2023 to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the three months ended ~~September~~June 30, ~~2022,~~2023, we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

"Item 3. Legal Proceedings" of our Form 10-K includes a discussion of our legal proceedings. There have been no material changes from the legal proceedings described in our Form 10-K.

ITEM 1A. RISK FACTORS

“Item 1A. Risk Factors” of our Form 10-K includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. There have been no material changes from the risk factors described in our Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information with respect to purchases of common stock we made during the ~~September 2022~~June 2023 quarter. The table reflects shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan"). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations may be deemed to be "issuer purchases" of shares that are required to be disclosed pursuant to this Item.

Shares purchased / withheld from employee awards during the September 2022 quarter
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Approximate Dollar Value (in millions) of Shares That May
Yet be Purchased Under the
Plan
July 2022 20,165 $ 30.92 20,165 $ —
August 2022 1,564 $ 33.28 1,564 $ —
September 2022 6,641 $ 29.27 6,641 $ —
Total 28,370 28,370


Shares purchased / withheld from employee awards during the June 2023 quarter
Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Approximate Dollar Value (in millions) of Shares That May Yet be Purchased Under the Plan
April 2023	4,305	$	35.86	4,305	$	—
May 2023	6,702	$	35.35	6,702	$	—
June 2023	4,251	$	39.92	4,251	$	—
Total	15,258			15,258

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3835

ITEM 6. EXHIBITS

(a) Exhibits

3.1(a) Delta's Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on April 30, 2007).*

3.1 (b) Amendment to Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).*

3.2 Delta's Bylaws (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on ~~February 8, 2019)~~December 9, 2022).*

4.1 Description of Registrant's Securities (Filed as Exhibit 4.1 to Delta's Annual Report on Form 10-K for the year ended December 31, 2020).*

10.1 ~~Purchase~~Mode l Award Agreement ~~Number PA-04696, dated July 18, 2022, between The Boeing Company and~~for the Delta Air Lines, Inc. 2023 Long-Term ~~relating to Boeing~~ ~~Model~~ ~~737-10 Aircraft~~Incentive Program .

10.2 **Terms of 2023 Restricted Stock Awards for Non-Employee Directors .

15 Letter from Ernst & Young LLP regarding unaudited interim financial information.

31.1 Certification by Delta's Chief Executive Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended June ~~September 30~~3 0 , ~~2022~~2023.

31.2 Certification by Delta's Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended ~~September~~June ~~30, 2022~~3 0 , 2023.

32 Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta's Chief Executive Officer and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended ~~September~~June ~~30, 2022~~3 0 , 2023.

101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2022,~~2023, formatted in Inline XBRL (included in Exhibit 101)

_______________

* Incorporated by reference.

** Portions of this exhibit have been omitted as confidential information.

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 3936

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Delta Air Lines, Inc.
			(Registrant)

			/s/ William C. Carroll
			William C. Carroll
			Senior Vice President - Controller
			(Principal Accounting Officer)
~~October~~July 13, ~~2022~~2023

Delta Air Lines, Inc. ~~September 2022~~| June 2023 Form 10-Q 4037


Table of Contents

			Page
Forward Looking Statements			1
Report of Independent Registered Public Accounting Firm			2

Part I. Financial Information
Item 1. Financial Statements			3
Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations and Comprehensive ~~Income~~Income/(Loss)			4
Condensed Consolidated Statements of Cash Flows			5
Consolidated Statements of Stockholders' Equity			6
Notes to the Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2019
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3835
Item 4. Controls and Procedures			3835

Part II. Other Information
Item 1. Legal Proceedings			3835
Item 1A. Risk Factors			3835
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3835
Item 6. Exhibits			3936

Signature			4037


Notes Repurchased in Tender Offer
(in millions)	Location in debt table	Principal Repurchased		Amount Paid
4.500% Senior Secured Notes due 2025	SkyMiles Notes	$	856	$	850
7.000% Senior Secured Notes due 2025	2020 Senior Secured Notes	478		498
7.375% Notes due 2026	Unsecured Notes	84		87
3.800% Notes due 2023	Unsecured Notes	65		65
Total Notes Repurchased		$	1,483	$	1,500


Balance at January 1, 2021 (net of tax effect of $1,764)	$	(9,078)	$	40	$	(9,038)
Changes in value (net of tax effect of $1)	3		—		3
Reclassifications into earnings (net of tax effect of $71)(1)	235		—		235
Balance at September 30, 2021 (net of tax effect of $1,692)	$	(8,840)	$	40	$	(8,800)


	Three Months Ended September 30,						2022 vs. 2021 % Increase (Decrease)		2022 vs. 2019 % Increase (Decrease)
(in millions)	2022		2021		2019
Total operating revenue	$	13,975	$	9,154	$	12,560	53	%	11	%
Total operating expense	12,519		6,949		10,489		80	%	19	%
Operating income	1,456		2,205		2,071		(34)	%	(30)	%



Available seat miles ("ASM")	63,007		54,083		75,742		17	%	(17)	%