Delta Air Lines, Inc. (NYSE:DAL) Q4 2022 Earnings Call Transcript

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Savi Syth: I appreciate that. And just kind of a quick follow-up, just on the kind of change fees and the revenue that you are seeing here, the dropping of the change fees, what kind of an impact is that having as you kind of think about the network or the revenue and will it be different once things are fully restored versus where it is today?

Glen Hauenstein: Yeah. Change fees accounted for almost $1 billion of revenue in the pre-pandemic world and we were on a path even absent the pandemic to change fees. They have become onerous, people didn’t like them and trying to give customers what they want, we were on a path to a different approach that got accelerated and I think we are very happy with where we are today, giving customers choice in how they want to fly. And I’d say we are counting on about half of that $1 billion to be replaced by people who want flexible, fully refundable at time of purchase, which is an option that they are choosing as opposed to being imposed on that. And the rest of that is then coming from a higher share of total customer base and upsells more than covering to produce the record revenues that we expect this year.

Savi Syth: Okay. Great. Thank you.

Operator: Thank you. Your next question is coming from Conor Cunningham from Melius Research. Your line is live.

Conor Cunningham: Hi, everyone. Thank you for the time. Just on the question that Scott talked about the bridge on the cost side. I don’t think you mentioned gauge or asset utilization improving throughout there. Can you just provide some color around where you expect those two metrics to kind of be meaningful tailwinds as you move throughout the year? The reason why I asked is that, there’s a lot of changes on the regional side, I would think that, that would be a pretty big tailwind from you?

Dan Janki: Yeah. The mainline asset utilization increases about — mid single-digit about 5% as we progress through the year. So we get the benefit associated with that and as we talked about at Investor Day, we continue to get the benefit associated with gauge.

Glen Hauenstein: Yeah.

Conor Cunningham: Okay.

Glen Hauenstein: Related to regional flying, as you know, we have about a third of our regional flight that flying that has not been flown today and that’s also one of the disparities between seat restoration and capacity restoration. We are not expecting a significant increase of that until the end of 2023 and into 2024. So we are going to be carrying that

Dan Janki: We are carrying that under utilization regional

Glen Hauenstein: under utilization.

Dan Janki: network absolutely in our run rate.

Conor Cunningham: Okay. Okay. That makes sense. And then on the Amex targets, I am a little surprised that those aren’t being revised up from 6.5%, from 5.5%, I mean that’s basically mirroring the capacity growth year-over-year. I would just think that there would be some outperformance just given the fact that, that portfolio has grown a fair bit. Can you just talk about like what you need to see to push those targets up or did you just see a lot of pull forward in consumer spend that kind of inflated the 2022 number, just trying to unpack that a little bit? Thank you.

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