Delta Air Lines, Inc. (NYSE:DAL) Q1 2024 Earnings Call Transcript

Dan Janki: Yes, we can. I think it is a unique advantage, that along with our fleet, our fleet has actually gotten younger over the last few years. But we’ve also given the constraints in the industry around the OEMs, have leaned into restore the network into our flex fleets. So, flying 80 717s, flying the 757s longer than we anticipated, and that puts demand on our TechOps teams, and their ability to ensure that we have those aircraft, that they’re reliable, is — really allows us to flex and be more nimble. And as we go through this period and it gets more normalized, we’re in a period of more normalized growth and more consistency around equipment, it’s also going to allow us to go into a period of more natural retirements.

We haven’t retired any aircraft in 2022 and 2023. We’ll start that at the back half of this year and that’s really where our team has always shined, the ability to naturally retire but then recoup that equipment and reuse that used material and run out the fleets and they did it with the MD-88s and 90s. They’ve done it for a decade and they have that history. And that’s really what we have in front of us.

Ed Bastian: Stephen, if I could add on the back end of Dan’s comments, two things. In the first quarter, our overall mainline reliability and completion factor was the strongest first quarter in our history. And that’s quite a statement given where we’ve been through and the supply-chain constraints that still exist and I attribute a lot of that to the maintenance team — the TechOps team, having the product ready every day and responding to the opportunities that we see in front of us. So that’s going to continue to be a positive green arrow forward as we move forward these next couple of years, as Dan was saying. Second thing is the MRO, while we’ve taken, I’d say, a pause given that we’ve had to focus our energies on our own fleet as compared to our customer’s fleets.

Going forward in the next couple of years, that’s going to start turning back on again. And that growth rate that we’ve talked about is still there. It’s just waiting for us. And I’m very, very excited as to what you talk about a five to 10-year timeline on that. That business is, I think is going to be — our ability to capture that business is going to be even stronger than we were thinking pre-pandemic given what we’ve all been through. So, hats off to the TechOps team, a lot more work to go, but we are absolutely on the right path.

Stephen Trent: Thank you very much, Ed and Dan. I appreciate the time.

Julie Stewart: Thanks, Steve. That will wrap up the analyst portion of the call. I’ll now turn it over to Tim Mapes to start the media questions.

Tim Mapes: Thank you, Julie. Matthew, if you don’t mind, as we transition from the analysts to reporters, could you repeat the instructions for one question and a follow-up, please?

Operator: Certainly. At this time, we’ll be conducting a Q&A session for media questions. [Operator Instructions] Your first question is coming from Leslie Josephs from CNBC. Your line is live.

Leslie Josephs: Hi, everyone. Thanks for taking my questions. On operations, just wondering if you saw any benefit from the fact that a lot of your hubs this past winter got rain and not blizzards? It seems like if it was 10, 15 degrees cooler, we have been talking about grounding the airline for a little bit at those hubs. And then separately, on the mechanical issues that some airlines have been having recently, have you reminded your employees or put out any kind of communication just to ensure that they’re following all protocols and just kind of reemphasize safety at Delta? Thanks.

Ed Bastian: Hi, Leslie, it’s Ed. With respect to weather, we certainly have had a nice run of weather broadly across our system, candidly, across our country. And that certainly has helped with respect to the overall operational performance. But what we like to do is neutralize for weather events and we see the performance of the airline weather-adjusted within our own system and we’re outperforming our prior performance even weather-adjusted. So, the improved weather just adds nice icing to the cake, but the fundamental, the core is running at a much, much better clip. And as the communications, safety is job one at all times, every single day. We don’t send out special messages around safety. We — every day is Safety Day around here.