Tag Archives: Delta Air Lines

American, Delta and United pressure the White House against Qatar Airways and Air Italy

The CEOs of American Airlines, Delta Air Lines and United Airlines have published an open letter to the White House concerning Qatar Airways and Air Italy:

President Donald J. Trump The White House
1600 Pennsylvania Avenue NW Washington, DC 20500

Dear President Trump,

Your administration was built on the enduring principle that the U.S. government will stand up for American workers against foreign governments that break their trade agreements with our country. The American people are grateful for that promise.

Today, America’s airline workers are counting on you to step up on their behalf.

In January 2018, your administration reached a historic agreement with Qatar over its Open Skies violations. While we hoped this agreement would hold Qatar accountable and force its heavily subsidized airline, Qatar Airways, to follow the rules and stop hurting American workers, that did not happen.

Today, Qatar Airways is ignoring the 2018 agreement that your administration signed by using massive government subsidies to launch new routes to the United States through its stake in Air Italy. Air Italy was a struggling regional carrier until Qatar Airways injected tens of millions of dollars into the company to circumvent the agreement and expand its U.S. presence. In the last few days, Qatar Airways has used its Italian proxy to launch routes to Los Angeles and San Francisco, and added flights to Miami – a further effort to undermine U.S. airlines. Simply put, Qatar Airways represents a grave threat to American jobs and the health of the airline industry.

No rule-abiding business can compete with a massively subsidized airline that ignores economic realities and can wipe away losses with one infusion of government cash after another.

We respectfully encourage your administration to hold Qatar accountable for violating
its agreement with the United States and affirm that we will not tolerate these continued infractions. We appreciate your resolute leadership in enforcing fair trade principles and ask that you continue to stand up for the more than 1.2 million U.S. workers whose jobs depend on a strong and vibrant passenger airline industry.

Sincerely,

Doug Parker, CEO, American Airlines

Edward Bastian, CEO Delta Air Lines

Oscar Munoz, CEO, United Airlines

Advertisements

Delta to expedite the retirement of its remaining McDonnell Douglas MD-90s

Delta Air Lines McDonnell Douglas MD-90-30 N902DA (msn 53382) FLL (Bruce Drum). Image: 101323.

Delta Air Lines currently operates a dwindling fleet of 40 McDonnell Douglas MD-90-30s.

During its first quarter earnings call, Chief Financial Officer (CFO) Paul Jacobson, announced the company will now accelerate the retirement of its remaining MD-90s.

The airline will provide a more definitive retirement schedule later in the second quarter.

Related to this, Delta also plans to retire the last McDonnell Douglas MD-88 in 2020. The MD-90s will be the end of line of operating McDonnell Douglas jets by Delta.

Top Copyright Photo (all others by the airline): Delta Air Lines McDonnell Douglas MD-90-30 N902DA (msn 53382) FLL (Bruce Drum). Image: 101323.

Delta aircraft side show:

x

Delta Air Lines announces its first quarter 2019 profit

Delta Air Lines today reported financial results for the first quarter (March) 2019 and provided its outlook for the second quarter 2019. Highlights of the first quarter 2019 results, including both GAAP and adjusted metrics, are below and incorporated here.

First Quarter Financial Highlights

• Adjusted earnings per share were $0.96, reflecting a 28 percent increase year over year on solid core performance and benefit from the early renewal of the American Express agreement.

• Total adjusted revenue, which excludes refinery sales, grew 7.5 percent to $10.4 billion with 55 percent from premium products and non-ticket sources.

• Total unit revenue, adjusted, increased 2.4 percent driven by double-digit growth in domestic corporate revenue and an approximate one point benefit from the American Express agreement.

• Non-fuel unit cost (CASM-Ex) decreased 0.2 percent compared to the prior year period, marking the third consecutive quarter of strong cost performance.

• Generated $2.0 billion of operating cash flow and $760 million of free cash flow after investing $1.3 billion into the business, primarily for aircraft purchases and modifications.

• Returned $1.6 billion to shareholders, comprised of $1.3 billion of share repurchases and $233 million in dividends.

“Delta is off to a solid start in 2019.  Our March quarter performance demonstrates the power of our growing brand preference, our unmatched competitive advantages, and most importantly the Delta people who are committed to providing the best travel experiences for our customers every day.  I’m pleased to recognize their efforts with $220 million toward next year’s profit sharing,” said Ed Bastian, Delta’s chief executive officer. “With the momentum in our business and our American Express contract renewal, we have increased confidence in achieving our full-year plan of top-line growth, margin expansion and double-digit earnings growth.”

Second Quarter 2019 Outlook

For the June quarter, Delta expects to deliver six to eight percent top-line growth and margin expansion.

Chart

Revenue Environment

Delta’s adjusted operating revenue of $10.4 billion for the March quarter improved 7.5 percent, or $728 million versus the prior year. This revenue result marks a March quarter record for the company, driven by improvements across Delta’s business, including an eight percent increase in premium product ticket revenue and double-digit percentage increases in loyalty and Maintenance, Repair and Overhaul revenue.  Cargo revenue declined five percent driven by lower volumes.

“Demand for Delta’s product has never been stronger, as evidenced by our 7.5 percent top line growth in the March quarter.  This underpins our expectation that June quarter unit revenue should grow 1.5 to 3.5 percent, with sequential improvement in passenger unit revenue across all entities,” said Glen Hauenstein, Delta’s president. “With our customer-focused commercial initiatives delivering strong customer loyalty and top-line momentum, we now expect full-year revenue growth of five to seven percent, an increase from our prior guidance.”

Cost Performance

Total adjusted operating expense for the March quarter increased $510 million versus the prior year quarter.  CASM-Ex was down 0.2 percent for the March quarter 2019 compared to the prior year period driven by record operations, a shift in expense timing and strong cost controls.

Adjusted fuel expense increased $87 million, or five percent, relative to March quarter 2018.  Delta’s adjusted fuel price per gallon for the March quarter was $2.05, which includes a $34 million loss at the refinery due to low gasoline crack spreads.

Adjusted non-operating expense for the quarter was $69 million higher versus the prior year, driven primarily by lower pension income and earnings pressure from international equity partners.

“Delta’s March quarter operating cash flow improved, driven by top-line growth, strong cost controls and margin expansion.  Our cash flow performance allows us to reinvest for Delta’s long-term earnings growth, while maintaining our investment grade balance sheet and consistently returning cash to shareholders,” said Paul Jacobson, Delta’s chief financial officer.  “With non-fuel unit cost momentum from our fleet transformation and One Delta efforts, we have clear line of sight to achieve our full year targets of one percent non-fuel unit cost growth and $3 to 4 billion in free cash flow.”

Cash Flow and Shareholder Returns

Delta generated $2 billion of operating cash flow, as improved profitability and the seasonal build of cash were partially offset by the $1.3 billion profit sharing payment to employees for 2018 performance.  Delta generated $760 million of free cash flow during the quarter after the investment of $1.3 billion into the business primarily for aircraft purchases and improvements.

Delta accelerated the repurchase of shares in the quarter, funded by a $1 billion short-term loan.  During the quarter, the company repaid $300 million of this loan and expects that the remainder will be repaid by year end.  Delta returned $1.6 billion to shareholders during the March quarter, comprised of $1.3 billion of share repurchases and $233 million in dividends.

Strategic Highlights

In the March quarter, Delta achieved a number of milestones across its five key strategic pillars.

Culture and People

• Celebrated the commitment of the Delta people through $1.3 billion in profit sharing for 2018 performance, the second largest profit sharing payout in the airline’s history.

• Achieved Delta’s highest overall ranking in Fortune’s Most Admired Companies for 2019 and ranked first for the eighth time in the past nine years as Fortune’s Most Admired Airline.

• Introduced a paid day of service for all employees, building on Delta’s commitment of donating 1% of profits to charitable organizations, through approximately 640,000 hours of community service.

• Continued Delta’s commitment to the communities of our employees, partners and customers through participation in the 16th Delta Global Build with Habitat for Humanity and celebrating the life of Dr. Martin Luther King, Jr. through a grant to re-open the Martin Luther King, Jr. National Historical Park in Atlanta during the MLK Holiday Weekend after it had remained closed due to lack of federal appropriations.

Operational Reliability

• Achieved the highest network system completion factor for the first quarter since 2012, continuing to raise the bar on operational excellence and delivering consistency and reliability to our customers.

• Delivered 69 days of zero mainline cancellations, 28 days of zero system cancellations and achieved mainline on-time performance (A0) of 72.0% for the March quarter.

Network and Partnerships

• Celebrated five years of the Delta and Virgin Atlantic partnership, focused on delivering the best customer experience in the trans-Atlantic market, with more than 70 daily nonstop flights between the U.K. and U.S., leading on-time performance, and enhanced terminal and in-cabin technology and service.

• Filed with the U.S. Department of Transportation for additional service to Tokyo-Haneda airport, proposing to expand Delta’s operational reliability and exceptional customer service to more customers flying across the Pacific.

Copyright Photo: Brian Peters.

Customer Experience and Loyalty

• Signed an 11-year renewal with American Express, ensuring that the two companies continue to work together to deliver best-in-class value to customers, while doubling the expected benefits to Delta to nearly $7 billion annually by 2023 from $3.4 billion in 2018.

• Debuted Delta’s state-of-the-art A220 (above), flying from Delta’s New York-LaGuardia hub to Dallas/Ft. Worth and Boston and from Delta’s Detroit hub to Dallas/Ft. Worth.

• Launched the ability for SkyMiles members to upgrade their experience post-purchase using miles through the Fly Delta App, increasing customer choice and the opportunities for customers to use miles as a form of payment with Delta.

Investment Grade Balance Sheet

• Completed $1.3 billion in share repurchases, opportunistically repurchasing 26 million shares and reaffirming Delta’s commitment to consistent shareholder returns.

• Lowered Delta’s borrowing costs while keeping debt balanced by securing a blended 3.2% fixed rate on a $500 million Enhanced Equipment Trust Certificate (EETC) secured by 14 aircraft.

Annual Shareholder Meeting

The Board of Directors has set the airline’s annual meeting of shareholders for 7:30 a.m. EDT, June 20, 2019. The meeting will be held at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York.

First Quarter Results

Adjusted results primarily exclude the impact of unrealized gains/losses on investments.

Chart

Chart

Winter Storm “Wesley” to affect a large area of the upper Midwest

Map: National Weather Service.

Southwest Airlines issued this statement:

Based on the forecasted weather conditions for the following cities, our scheduled service may be disrupted (flights may be delayed, diverted, and/or cancelled) on the following dates:

Wednesday, April 10:

  • Milwaukee, WI (MKE)

Wednesday, April 10, and Thursday, April 11:

  • Denver, CO (DEN)

Wednesday, April 10, through Friday, April 12:

  • Minneapolis, MN (MSP)

Customers who are holding reservations for these cities on the dates noted above, and want to alter their travel plans may rebook in the original class of service or travel standby (within 14 days of their original date of travel between the original city-pairs and in accordance with our accommodation procedures) without paying any additional charge.

Customers who purchased their itinerary via Southwest.com or our mobile app are eligible to reschedule their travel plans online or from their mobile device.

Customers who did not purchase a ticket via Southwest.com can call 1-800-435-9792 to speak with a Customer Representative.

Customers in the U.S. scheduled to travel internationally must call 1-800-435-9792 to speak with a Customer Representative for assistance with rebooking.

Delta Air Lines issued this statement:

Delta has proactively issued two weather waivers ahead of a winter storm Wednesday and Thursday for the Upper Midwest area and Colorado.

This latest winter system is expected to bring frozen and mixed precipitation to Delta’s Minneapolis/St. Paul hub and surrounding cities, spanning from the Upper Peninsula of Michigan, down through Central Minnesota and down into eastern South Dakota and Colorado. Winter precipitation is slated to begin Wednesday afternoon through Thursday, prompting the potential for schedule adjustments Thursday as a result of field conditions at airports in the region.

Delta’s routes from the MSP hub:

Both the Upper Midwest and Colorado waivers allow customers traveling to, from or through the cities included to make a one-time change to their itinerary without incurring a fee.

Delta’s Meteorology team continues to keep an eye on the late-winter storm system, closely analyzing the latest data from various weather forecasting models as the storm moves through the Rocky Mountains. Factoring in the mountainous typography and other variables, each model has provided separate, though converging, forecasts for cities in the Upper Midwest region and Colorado.

As the system approaches, the weather prediction models are expected to more closely align on precipitation amounts, wind speeds and timing, allowing the airline’s meteorologists to provide the most accurate and detailed information to Delta’s operations teams. They’ll use that information to plan for any necessary changes to flight schedules to minimize the operational impact.

Customers are encouraged to check their flight status on Delta.com or the Fly Delta Mobile App. Customers can also get updates sent directly to their mobile device or by email with One-Time Flight Notification.

Update April 8, 5 p.m. ET

Delta’s Meteorology team in the airline’s Operations and Customer Center are keeping an eye on a late winter storm system that is expected to bring frozen and mixed precipitation to the Northern Plains of the United States Wednesday afternoon through Thursday.

Moving east from the Pacific Northwest region Monday, specifics around timing, precipitation totals and wind speeds are still coming together as Delta meteorologists analyze the latest weather model data. Details around the storm will likely be better defined Tuesday after the system crosses the Rockies.

Wind speeds and precipitation totals will be better projected as the storm moves eastward from the Pacific Northwest.

Customers can check their flight status by visiting Delta.com, checking the Fly Delta Mobile App, opting in for updates sent directly to their mobile device or via email with a One-Time Flight Notification.

Delta, Virgin Atlantic to serve London-Gatwick from Boston and New York-JFK in 2020

Delta Air Lines has made this announcement:

  • Trans-Atlantic partners Delta and Virgin Atlantic offer up to 18 flights daily to the U.K. from Boston and New York
  • Delta also to deploy fully modernized Boeing 767-400s on all flights between London-Heathrow and Boston and New York-JFK this fall

Delta Air Lines is building on its position as the leading global carrier in Boston and New York with the launch of two new international routes – nonstop service from Boston’s Logan International Airport and New York’s John F. Kennedy International Airport to London’s Gatwick Airport will begin next summer in partnership with Virgin Atlantic.

London-Gatwick will be the eighth nonstop trans-Atlantic destination from Boston on Delta and its partners, who together offer up to 13 daily flights between Boston and Europe. In New York, the additional flight adds to Delta and Virgin’s combined eight daily flights to London-Heathrow – and three additional daily flights to Edinburgh, Glasgow and Manchester – from Delta’s JFK hub.

Delta and its joint venture partners together offer their customers the most transatlantic flights and seats out of the northeast United States.

Full Gatwick schedule details will be announced later this year. The London-area airport was the destination for Delta’s very first transatlantic flight more than 40 years ago, when service began from Atlanta.

Upgraded aircraft on flights to London-Heathrow from Boston and JFK

Delta is also enhancing its aircraft on all flights between London-Heathrow and both Boston and JFK. Beginning this week, Delta flights between Boston and London-Heathrow will operate on an Airbus A330-200, which already serves Delta’s JFK-Heathrow flights and features additional premium seats. And in November 2019, the airline will introduce on these routes fully refurbished Boeing 767-400s, featuring a modern interior and all four branded seat products – including a more private Delta One experience, Delta Premium Select, Delta Comfort+ and Main Cabin – to give customers greater choice when they travel. Delta’s refreshed 764-400 aircraft will also feature the new wireless IFE system developed by Delta Flight Products with seat-back entertainment screens in every cabin and thoughtful touches like full-spectrum LED ambient lighting and memory foam cushions throughout the aircraft for added comfort.

Additional service to Paris, Tel Aviv and Amsterdam from JFK

In addition to the new Gatwick service, Delta’s existing transatlantic offerings also continue to grow. The airline this summer will add a second daily flight from JFK to Tel Aviv and a second daily flight from JFK to Paris, along with a third daily frequency from JFK to Amsterdam that will begin in October 2019 and operate four times per week. The Tel Aviv and Paris flights will be served by Airbus A330-300 aircraft; the Amsterdam service will operate on a Boeing 767-300ER.

An unmatched global network in Boston

Delta is Boston’s fastest-growing carrier by daily departures and this spring, the airline and its partners will offer the most international seats from Boston with new and expanded services to up to 19 international destinations, including:

  • ​New Delta-operated seasonal service to Lisbon and Edinburgh, launching May 23
  • An additional Amsterdam flight by partner KLM, which launched March 31
  • A daytime London-Heathrow flight operated by partner Virgin Atlantic, launched April 1
  • New nonstop Seoul-Incheon service operated by partner Korean Air, launching April 12

Delta has doubled domestic daily departures out of Boston since 2013 and this year will serve four additional domestic destinations – Cleveland, Chicago, Washington-Reagan, and Newark-Liberty – while also adding more frequencies in another seven key domestic markets.

“Delta and its partners offer an unmatched global network that’s capable of taking Boston customers to more worldwide destinations than ever before,” said Joe Esposito, Delta’s Senior Vice President – Network Planning. “We’re offering up to 149 daily departures to more than 50 destinations from Logan in 2019, an increase of nearly 30 daily departures over 2018. Our investment in Boston at the airport and in the community only continues to deepen.”

Delta CEO Ed Bastian visited Boston in March 2019 and announced the airline’s plans to assume operations at all gates at Logan’s Terminal A by the third quarter of 2019, growing Delta’s airport footprint by five gates. Delta also plans by 2020 the expansion of its Delta Sky Club near gate A18, including new showers, expanded seating and a reimagined food and beverage area.

Delta is New York’s largest carrier and operates more than 200 peak-day departures to more than 80 destinations worldwide from its JFK hub. The airline first unveiled its $1.2 billion, state-of-the-art international gateway at JFK’s Terminal 4 in 2013.​

Delta launches new flights across the Pacific in partnership with Korean Air

Delta Air Lines made this announcement:

  • The new flights connect Minneapolis/St. Paul with Seoul, South Korea, and Seattle/Tacoma with Osaka, Japan. 
  • Flights are first additions to the Delta-Korean joint venture’s network since the partnership launched in May 2018; Boston-Seoul service operated by Korean Air also launches April 12.

​Delta is bringing customers more options for travel across the Pacific with direct service launching today connecting Minneapolis/St. Paul with Seoul, South Korea, and Seattle with Osaka, Japan.

The two new Delta flights, together with Korean Air-operated service between Boston and Seoul beginning April 12, are the first additions to the partnership’s network since the joint venture launched in May 2018.

Seoul-Incheon connects Delta’s MSP hub to over 80 destinations across Asia with Korean Air

 

In addition to enjoying among the best connections between the Midwestern U.S. and Asia, customers on Delta’s new Seoul-Minneapolis/St. Paul flight will enjoy will airline’s award-winning service onboard a newly upgraded 777-200ER.

This aircraft features all new cabins, including 28 award-winning Delta One suites with a full-height door, memory foam seats and state-of-the-art design; 48 Delta Premium Select cabin seats with elevated personal service, plated meals and more space to stretch out with recliner seat rows; 90 seats in Delta Comfort+ and 112 all-new Main Cabin seats – the widest in the Delta international fleet – in a nine-abreast configuration. The new cabins enjoy in-seat USB and 110V power ports, inflight Wi-Fi and new dynamic LED lighting that varies by phase of flight fostering a relaxing, refreshing environment onboard. These flights also feature menus in all cabins crafted by Michelin two-star Chef Kwon Woo Joong.

The service is Delta’s second trans-Pacific nonstop flight from its MSP hub, complementing existing service to Tokyo-Haneda.

Seattle/Tacoma-Osaka route expands partnership’s presence in Japan

The Seattle/Tacoma-Osaka route represents a significant addition to the Delta and Korean Air trans-Pacific joint venture partnership, which serves 12 destinations in Japan — giving shared customers optimized schedules, a more seamless customer experience and improved loyalty program benefits.

Delta is deploying Boeing 767-300ER aircraft on the new route, equipped with 25 fully flat-bed seats in Delta One, 29 seats Delta Comfort+ and 171 seats in the Main Cabin.

Delta operates more than 150 peak-day departures to more than 50 destinations from its hub at Seattle-Tacoma International Airport. Delta is Seattle’s fastest-growing airline, growing by more than 50 percent since 2012 and 5 percent this summer.

American Express and Delta renew industry-leading partnership, lay foundation to continue innovating customer benefits

Delta Air Lines has made this announcement:

  • New agreement sets stage to create industry’s most valuable co-brand portfolio; extends relationship through 2029
  • Co-brand credit cards, Delta Sky Club® access and the Membership Rewards® program remain key features

American Express and Delta Air Lines have signed an 11-year renewal extending their exclusive Delta SkyMiles Credit Cards from American Express portfolio through the end of 2029.

The long-term agreement will leverage shared strengths to deliver best-in-class value to customers, while continuing existing features, including:

  • Ongoing investment in industry-leading benefits for Delta SkyMiles Credit Cards from American Express
  • Complimentary access to the award-winning network of Delta Sky Clubs around the world for Delta Reserve Card Members and Platinum Card® Members from American Express
  • Delta participation in the Membership Rewards program from American Express, allowing those points to transfer into the SkyMiles® Program
  • Delta as an American Express Card-accepting merchant

As the two companies work together, Delta expects its benefit from the relationship to double to nearly $7 billion annually by 2023, up from $3.4 billion in 2018, strengthening Delta’s increasingly diversified revenue stream.

American Express expects attractive growth economics over the term of the agreement and affirmed its previous guidance for 2019 of FX-adjusted revenue growth in the 8-10 percent range and adjusted earnings per share between $7.85 and $8.35, subject to any contingencies and legal settlements1. The economics of the new terms are not expected to have a material effect on the first quarter results of American Express.

Since 1996, Delta and American Express have offered a portfolio of co-branded products that allow eligible Card Members to earn miles and receive other Delta-related benefits such as first checked bag free, Main Cabin 1 priority boarding and Delta Sky Club access. In 2018, the companies added 1 million new Delta SkyMiles Credit Card Members while spending across the card portfolio grew by double digits. Delta is the largest co-brand partner for American Express and its only U.S. airline consumer co-brand partner.

1 American Express’ 2019 guidance for FX-adjusted revenue growth and adjusted EPS subject to contingencies and legal settlements are non-GAAP measures. FX-adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars (i.e., assumes FY’19 foreign exchange rates will apply to FY’18 results when calculating year-over-year growth). A reconciliation to EPS guidance on a GAAP basis is not available without unreasonable efforts.