Delta Air Lines, Inc. (NYSE:DAL) Q3 2019 Earnings Conference Call - Final Transcript

Oct 10, 2019 • 10:00 am ET


Delta Air Lines, Inc. (NYSE:DAL) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning everyone and welcome to the Delta Air Lines September 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 will be recorded.

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

Jill Sullivan Greer

Thanks, Jake. Good morning, everyone, and thanks for joining us for our September quarter call. Joining us from Atlanta today are Delta's 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 financial 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. And you can find a reconciliation of our non-GAAP measures on the Investor Relations page at

And with that, Ed?

Edward H. Bastian

Thanks, Jill. Good morning, everyone. We appreciate you joining us today. Demand for the Delta product is as strong as ever. And our powerful brand, unmatched competitive strengths and pipeline of initiatives are driving earnings growth, margin expansion and solid returns for our owners.

Earlier today, Delta reported September quarter pretax profit of $2 billion, which is up $350 million from last year. Our EPS increased 30% to $2.32 per share, with operating margins expanding by 2.5 points. Importantly, we've already generated $4 billion in free cash flow year-to-date.

Our employees continue to deliver the very best operational reliability and service for our customers, even against this summer's backdrop of record passenger volumes, airport construction projects and difficult weather. We've now had 123 days without a single cancelation across the entire Delta system this year, a 23% improvement over last year's record performance. This unprecedented level of reliability combined with great service from our team continue to drive higher customer satisfaction and growing brand affinity for Delta.

Year-to-date, our domestic net promoter score has improved more than five points over the prior year. And we're also seeing positive momentum in international net promoter scores with opportunity for further improvement as we continue to upgrade cabin interiors and enhance our customer experience.

Stronger customer satisfaction is translating into higher revenues. Revenues grew 6.5% to a record $12.6 billion in the quarter and we now expect to achieve a approximately 7% top line growth