Five years ago, Delta dedicated one of its Boeing 757 aircraft to honor America’s servicemen and women.
The airline underscored that commitment to the U.S. military today, re-dedicating the plane with a fresh coat of paint and new logo during the first day of its annual Veterans Day event.
Known as the “The Spirit of Freedom,” the plane is more than an aircraft; it’s a symbol of respect, said Delta’s Veterans Business Resource Group vice president Kurt Robinson.
“This plane isn’t your ordinary aircraft,” he said. “When you see it pull up at the gate with the ‘Spirit of Freedom’ emblem on the front, it’s a reminder of how appreciative Delta is of all service members and for all they’ve done for us.”
The plane honors Delta’s more than 10,000 employee veterans and 3,000 active duty employees — a commitment the airline takes seriously. When the plane was originally dedicated in 2012, the Secretary of Defense awarded Delta its highest honor to given to employers, the Employer Support Freedom Award.
Above Copyright Photo: Delta Air Lines Boeing 757-232 WL N694DL (msn 29726) “The Spirit of Freedom” LAX (Michael B. Ing). Image: 939926.
Delta’s specialty liveries only graces a handful aircraft in the airline’s fleet, making this one all the more special. Originally, the aircraft’s logo depicted the “Spirit of Freedom” text along with an American flag. Now emblazoned with the updated logo, the aircraft depicts logos of each U.S. military branch beneath the text.
Robinson, who is a veteran of the U.S. Air Force, explained that multiple Delta groups came together to get the plane ready for its big unveiling.
“Several people submitted concept drawings of the new logo, and then we worked with Marketing to make it come to life,” he said. “We painted the plane offsite to keep it a surprise, and snuck it back in for TechOps to apply the logo.”
After TechOps’ Veteran’s Day observance, the plane will return to its regular schedule — flying to a number of domestic destinations across the U.S.
Delta Air Lines (Atlanta) today reported financial results for the March 2013 quarter. Highlights from the quarter include:
Delta’s net profit for the March 2013 quarter was $85 million, or $0.10 per diluted share, excluding special items1. This result is a $124 million improvement year-over-year.
Including $78 million in special items, Delta’s GAAP net income was $7 million, or $0.01 per diluted share.
Results include $20 million of profit sharing expense in recognition of Delta employees’ contributions to the company’s financial performance.
Delta generated $1.1 billion of operating cash flow and $457 million of free cash flow in the March 2013 quarter, and ended the period with adjusted net debt of just under $11.0 billion.
“Our results represent Delta’s strongest March quarter financial and operational performance in over a decade and I want to thank Delta people worldwide for all the hard work that went into producing these results for our company. This performance is proof that we are on the right path to making Delta the airline of choice for our shareholders, employees, and customers,” said Richard Anderson, Delta’s chief executive officer. “With a solid financial foundation and building momentum from initiatives like our LaGuardia expansion, Virgin Atlantic investment and new Terminal 4 at New York-JFK, we are well positioned to generate significant improvements in Delta’s profitability going forward.”
Revenue Environment Delta’s operating revenue grew $87 million, or 1.0 percent, in the March 2013 quarter compared to the March 2012 quarter. Load factor increased to 81.2 percent, with traffic down 0.6 percent on a 2.5 percent decrease in capacity.
Passenger revenue increased 1.4 percent, or $107 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 4.1 percent, driven by a 2.1 percent improvement in yield.
Cargo revenue decreased 2.4 percent, or $6 million, on declining freight yields.
Other revenue decreased 1.4 percent, or $14 million, as a result of lower third-party maintenance revenue.
Comparisons of revenue-related statistics are as follows:
1Q13 versus 1Q12
“Our March quarter unit revenues grew 4 percent, showing that the investments we have made in operations, products and service, combined with our capacity discipline, have built a solid revenue-producing foundation,” said Ed Bastian, Delta’s president. “We are taking actions to mitigate the decline in close-in demand we saw in the last part of March, and we expect the impact of the sequester, combined with a softening of leisure demand, to result in a 2 – 3 percent decline in April’s unit revenues. However, a key benefit from a consolidated industry is that we now see a much stronger correlation between revenue and fuel; so while we are seeing some revenue softness, we are also benefitting from lower fuel costs, allowing us to continue our path of margin expansion even in a sluggish economic environment.”
Cash Flow Cash from operations during the March 2013 quarter was $1.1 billion, driven by the seasonal increase in advanced ticket sales and March quarter profitability. The company generated $457 million of free cash flow.
Capital expenditures during the March 2013 quarter were $650 million, including $500 million in fleet investments and $47 million for two sets of slots at London’s Heathrow airport. Capital expenditures included 21 aircraft purchased off lease as part of Delta’s debt reduction efforts. During the quarter, Delta’s debt maturities and capital leases were $382 million.
Delta ended the quarter with adjusted net debt of just under $11.0 billion and the company has now achieved a $6 billion net debt reduction since 2009. This debt reduction strategy produced a $50 million year-over-year reduction in interest expense in the March quarter. As of Mar. 31, 2013, Delta had $5.4 billion in unrestricted liquidity, including $3.6 billion in cash and short-term investments and $1.8 billion in undrawn revolving credit facilities.
Fuel Fuel expense for the March quarter declined $78 million year-over-year, excluding mark to market adjustments, as a result of lower fuel prices and consumption. Delta’s average fuel price2 was $3.24 per gallon for the March quarter, which includes 6 cents per gallon in settled hedge gains. For the March quarter, operations at the Trainer refinery produced a $22 million loss, driven by supply disruptions related to Superstorm Sandy and a short-term outage in a gasoline production unit, which slowed production during the quarter.
Cost Performance Excluding fuel, total operating expense in the quarter increased year-over-year by $198 million as the impact of operational, service and employee investments was partially offset by savings from Delta’s structural cost initiatives.
Consolidated unit cost excluding fuel expense, profit sharing and special items (CASM-Ex3), was 5.0 percent higher in the March 2013 quarter on a year-over-year basis, driven by the impact of capacity reductions, wage increases, and operational and service investments. GAAP consolidated CASM increased 5.8 percent.
“Our March quarter non-fuel unit cost growth was lower than expected, as the benefits of our structural cost initiatives limited the cost growth associated with investments in our people, operations, and service,” said Paul Jacobson, Delta’s chief financial officer. “We should see our cost pressures lessen significantly in the second half of the year, as the benefits of our structural cost initiatives accelerate and we lap the impact of prior year investments.”
Company Highlights Delta has a strong commitment to its employees, customers and the communities it serves. Key accomplishments in the March 2013 quarter include:
Receiving recognition from leading organizations and publications, including being named FORTUNE’s Most Admired Airline, receiving Aviation Week’s Laureate Award for Innovation, and receiving the International Service Excellence Award for reservation sales;
Recognizing the achievements of Delta employees toward meeting the company’s financial and operational goals with $43 million of incentives so far this year, including $20 million in employee profit sharing and $23 million in Shared Rewards;
Significantly improving its operational performance, resulting in an on-time arrival rate of 86.2 percent and 12 percent fewer customer complaints compared to 2012;
Continuing the company’s ongoing investment in high-quality facilities through the renovation of LaGuardia Terminals C and D with the addition of a connecting bridge and improvements to the Delta Sky Clubs, seating areas and food options, and the development of the Sky Deck, new outdoor seating areas at Delta Sky Clubs in Atlanta and New York-JFK, designed in conjunction with Architectural Digest;
Enhancing the SkyMiles Medallion program by introducing Crossover Rewards, the industry-leading joint loyalty partnership with Starwood. The partnership allows members to share program benefits and earn more miles and Starpoints when traveling with either company;
Releasing a new Fly Delta app for iPad and iPhone as part of a broader rollout of a significantly improved online and digital customer experience. The new Fly Delta app has added functionality and includes the unique “Glass Bottomed Jet” feature; and
Extending Delta’s involvement in the community, as more than 50 Delta employees partnered with SkyMiles Medallion members and Aeromexico employees to build six homes in Puebla, Mexico. This effort was Delta’s ninth international build with Habitat for Humanity.
Special Items Delta recorded special items totaling a $78 million charge in the March 2013 quarter, including:
$24 million in mark-to-market gains for fuel hedges settling in future periods; and
a $102 million charge for facilities, fleet and other items.
Delta recorded special items totaling a $163 million gain in the March 2012 quarter, including:
$151 million in mark-to-market gains for fuel hedges settling in future periods;
a $39 million gain associated with the exchange of slots at New York-LaGuardia and Washington-Reagan National; and
a $27 million charge for facilities, fleet and other items.
Copyright Photo: Brian McDonough. Boeing 757-232 WL N694DL (msn 29726) “The Spirit of Freedom” prepares to land at Washington (Reagan National).
Delta Air Lines (Atlanta) will increase service at Los Angeles International Airport with daily year-round and seasonal service to 14 destinations, including eight new markets. The additional service adds 12 percent more daily seats in the market.
The new and expanded Los Angeles service between the following cities (start dates) includes:
New daily service to Nashville and three daily flights to Seattle/Tacoma (April 8)
New intra-West service to two markets: San Jose, California with four daily flights (July 1) and Spokane, Washington with one daily flight (June 10)
New summer seasonal service to three markets: Boston will operate daily (June 10), Anchorage, Alaska will operate three times weekly Friday-Sunday (June 21) and Bozeman, Montana will operate Saturday only service (June 22)
New Central America service to San Jose, Costa Rica (July 1)
Expanding current intra-West service with one additional flight to Oakland, California, Phoenix and Sacramento, California for a total of five (June 10)
Service to Puerto Vallarta, Mexico will increase frequency from Saturday only to daily (July 1) and one additional Saturday flight will be added to Guadalajara, Mexico (July 6)
Expanding service to New Orleans with one additional flight for a total of three daily (September 4)
Full flat-bed seating in BusinessElite on four of the seven flights to New York-JFK this summer
Upgrading Las Vegas aircraft to six daily mainline flights in June
By summer, Delta will operate 118 peak-day departures to 40 nonstop destinations, including Sydney and Tokyo, from Los Angeles. All Los Angeles service offers customers the option of first class, Economy Comfort or economy seating, along with in-flight Wi-Fi.
Customers flying from Los Angeles also benefit from Delta’s agreements with domestic partner Alaska Airlines and key international carriers, including WestJet and Virgin Australia, as well as Sky Team partners Air France/KLM, Alitalia, Korean Air, AeroMexico, China Airlines China Eastern, China Southern and Aeroflot.
In 2012, Alaska Airlines relocated to Los Angeles International Airport’s Terminal 6 as part of a Delta co-location strategic partnership. Customers of both airlines benefit from shorter connecting times between Delta’s operation at Terminal 5 and 6 while creating more international, transcontinental and West Coast travel options.
Additionally, Delta expects to begin codesharing on flights between Los Angeles and London-Heathrow airport with partner Virgin Atlantic Airways later this year.
Los Angeles is currently one of several Delta facilities undergoing significant renovations to check-in and arrival areas as well as jet bridges to improve the airline’s operational performance and overall customer experience.
Copyright Photo: James Helbock. Boeing 757-232 WL N694DL (msn 29726) “The Spirit of Freedom” completes its final approach at Los Angeles.