Delta Air Lines, Inc. (NYSE:DAL) Q2 2019 Earnings Conference Call - Final Transcript

Jul 11, 2019 • 10:00 am ET

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Delta Air Lines, Inc. (NYSE:DAL) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, everyone, and welcome to the Delta Air Lines June Quarter Financial Results Conference Call. My name is Jake, and I will be your coordinator. At this time, all participants are in a listen-only mode, until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded.

I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. Please go ahead.

Executive
Jill Greer

Thanks Jake. Good morning and thanks to everyone for joining us on our June quarter earnings call. Joining us from Atlanta today are our CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is here in the room for the Q&A session.

Ed will open the call and give an overview of Delta's performance; Glen will then address the revenue environment; and Paul will conclude with a review of our cost performance and cash flow. To get in as many questions as possible during the Q&A, please limit yourself to one question and a brief follow-up.

Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta's SEC filings.

We'll also discuss non-GAAP financial measures. All results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the IR page at ir.delta.com.

And with that, here's Ed.

Executive
Ed Bastian

Thanks, Jill. Good morning, everyone. Thanks for joining us today. Our record June quarter financial and operating results demonstrate the Delta difference in action. We are translating our powerful brand, unmatched competitive advantages and pipeline of initiatives to drive earnings growth, margin expansion and solid returns for our owners.

Earlier today, we reported a June quarter pretax profit of $2 billion, with earnings increasing 32% to $2.35 per share. We expanded operating margins by more than 2 points and generated $1.8 billion in free cash flow. We continue to run the best operation in the global industry by far. To date, we have achieved 82 days without a single cancellation across the Delta system, a 26% improvement over last year's record performance. And for our mainline product, we've already reached 153 days without a cancellation. This reliability, combined with great service our people provide is translating to more customers than ever choosing Delta.

As a result, we ran the highest load factors in our history and flew a record 53.9 million passengers in the June quarter. And even with these record volumes, this was the first time in our history that Delta had zero involuntary denied boardings for an entire quarter. This strong demand drove an 8.7% improvement in our top-line and total revenue of $12.5 billion, which marked the highest quarterly result in our history. And our momentum continues to build, we've experienced 5 of the top 10 revenue days in