Delta Air Lines, Inc. (NYSE:DAL) Q3 2019 Earnings Conference Call - Final Transcript
Oct 10, 2019 • 10:00 am ET
Edward H. Bastian
for the full year. I want to thank the entire Delta team for producing one of the best quarters in our history. You are the force behind the Delta brand. And to recognize your efforts through a challenging summer, we have accrued another $517 million towards next February's profit sharing. This brings the total for the year to nearly $1.3 billion.
In addition, we are making important investments in our people, including improvements to benefits and a 4% base pay increase that went into effect last week for ground employees and flight attendants. Beyond investments in our people, we are continuing to improve the customer experience through a record number of new aircraft deliveries, airport terminal projects and technology innovations. These investments support long-term growth, industry-leading profitability and strong cash flow.
In many ways 2019 has been a transformational year for our Company. We firmly established Delta as the largest airline in the world, both on revenues and profits, and are solidly on track to produce our fifth straight year with pre-tax profits in excess of $5 billion. We have the world's most valuable airline brand, one that has mentioned not just among the best global airlines but alongside top consumer brands. And we're building out our portfolio of industry-leading partners across our business.
Just two weeks ago, we announced a new strategic partnership with LATAM Airlines. The agreement adds geographic diversity in a fast-growing continent, adding 100 new destinations to our map and significantly improving our position in South America. Once approved, our proposed JV will move Delta from current Number 4 position in South America to a combined Number 1 position. We expect this partnership to translate to $1 billion in new annual revenue over the next five years and improved returns in the Latin entity. Along with our existing partnerships with Aeromexico and WestJet, we're creating a true carrier of the Americas with the ability to connect travelers as never before.
American Express is another important long-term partner and the combination of our two brands has created an industry-leading co-brand credit card portfolio. Our recent contract renewal provides a diverse, high-margin revenue stream that we expect to grow to nearly $7 billion by 2023 with further growth through the end of the decade. Last week, we announced a major relaunch of our Delta SkyMiles American Express Card portfolio. We are providing our customers with more ways to earn miles and new benefits that deliver an even better travel experience.
The investments we're making in our people, product, service and partnerships are diversifying our revenues and will grow the earnings power of our business for years to come, important steps on our path to being the world's leading airline. Demand for our product has never been higher. We have grown our revenues by 15% over the last two years. And to ensure that we continue to deliver the very best product and returns in this industry, we need to continue to invest in our people and our service.