delta airlines business plan

Delta Airlines Business Model: A Comprehensive Review

Editorial Team

Delta Airlines, the highest-valued commercial airline in the world with a worth of over 5.5 billion USD in 2021, has built a robust and effective business model that sets it apart in the competitive airline industry. In this comprehensive review, we will delve into Delta’s strategy, operations, customer experience, and environmental sustainability initiatives.

As a Fortune 500 company, Delta Airlines has established itself as a global powerhouse, offering an extensive global network with 355 more international destinations in 37 more countries compared to its closest competitor, American Airlines. This vast network allows Delta to serve an expansive customer base and cater to a wide range of travel needs.

One of Delta’s key strengths lies in its operational efficiency, exemplified by its remarkable 0.2% flight cancellation rate in June 2021. This outstanding performance outpaces its competitors, American Airlines and United, and showcases Delta’s commitment to reliability and customer satisfaction.

Delta Airlines understands the importance of building customer loyalty, which is evident in its SkyMiles loyalty program. With over 100 million members worldwide, the program offers a range of benefits, including reward flights, upgrades, and exclusive perks, fostering strong customer relationships and repeat business.

In recent years, Delta has implemented strategic measures to enhance its fleet and sustainability measures. The retirement of wide-body aircraft, such as the Boeing B747-400 and Boeing B777, in favor of more fuel-efficient options like the Airbus A350, reflects Delta’s commitment to reducing its carbon footprint and operating a modern and environmentally conscious fleet.

Delta Airlines operates in a complex industry where it incurs costs in areas like aircraft maintenance, fuel, labor, facilities, and other operating expenses. However, through strategic collaborations with airlines like Air France, KLM, China Eastern, Virgin Atlantic, and Korean Air, Delta expands its global coverage, optimizes resources, and capitalizes on strategic alliances to offer seamless travel experiences to its customers.

By focusing on the needs of both business and leisure travelers, Delta Airlines positions itself as a premium choice in the market. With a value proposition centered on reliability, quality, a luxurious travel experience, and a customer-centric approach, Delta continuously strives to exceed customer expectations and maintain a strong brand reputation.

Key Takeaways:

• Delta Airlines is the highest-valued commercial airline in the world, worth over 5.5 billion USD in 2021.
• Delta offers an extensive global network with 355 more international destinations in 37 more countries compared to American Airlines.
• Delta boasts an impressive flight cancellation rate of 0.2%, outperforming American Airlines and United in terms of operational efficiency.
• SkyMiles, Delta’s loyalty program, has over 100 million members worldwide.
• Delta’s fleet strategy prioritizes fuel efficiency and environmental sustainability.

In the following sections, we will conduct a comprehensive evaluation of Delta Airlines’ business model, analyzing the general environment and industry factors, their focus on customer satisfaction, the impact of COVID-19 on the airline industry and Delta, and finally, the key takeaways and implications of Delta’s business model.

The Company and Its Operations

Delta Air Lines, one of the leading players in the airline industry, has established itself as a powerhouse within the Industrials sector. With a market capitalization of $31.9 billion as of June 2024, Delta has solidified its position as the largest airline in the world based on market capitalization.

In its fiscal year 2023, Delta reported total operating revenue of $58.04 billion. This impressive figure is comprised of various revenue streams, including passenger revenue, cargo revenue, and other revenue sources. Passenger revenue for FY 2023 reached $48.9 billion, representing a significant 21% increase from the previous year.

Delta Air Lines operates a mainline fleet of over 800 aircraft, which allows it to serve more than 290 destinations across six continents. The airline’s commitment to customer satisfaction is exemplified by its recognition as the No. 1 airline for First/Business and Premium Economy Passenger Satisfaction by J.D. Power. Additionally, Delta has been recognized as North America’s most on-time airline by Cirium, further solidifying its reputation as a reliable and efficient carrier.

Notably, Delta Air Lines serves over 190 million customers annually, showcasing the airline’s extensive reach and popularity among travelers. With over 4,000 daily flights, Delta ensures that passengers can access their desired destinations conveniently and efficiently.

As a socially responsible company, Delta Air Lines has made community partnership a priority. The airline returns 1% of its annual net income to communities and has been honored for seven years in a row on the Civic 50 list by Points of Light for its community-minded initiatives. Furthermore, Delta actively promotes diversity, equity, and inclusion within the organization, making it one of Glassdoor’s Best Places to Work.

To cater to the evolving needs of its customers, Delta Air Lines equips more than 650 of its aircraft with fast and free Wi-Fi, allowing travelers to stay connected during their journeys. Additionally, Delta Cargo plays a crucial role in transporting over 13 million pieces annually, emphasizing the airline’s commitment to efficient and reliable freight services.

All these achievements and investments have contributed to Delta Air Lines’ success and profitability. In 2023 alone, the airline reported a net income of $4.6 billion, representing a remarkable 249% increase compared to the previous year.

The SkyMiles Program and Delta’s Rich History

Delta Air Lines has a deep-rooted history that dates back to 1925 when it was founded as Huff Daland Dusters. The company was later renamed Delta in 1928, marking the beginning of its journey as a prominent player in the airline industry.

Notably, Delta’s frequent flier program, SkyMiles, was established in 1981. This loyalty program allows customers to earn miles and enjoy various benefits, further enhancing their travel experiences with Delta Air Lines.

Evaluation of Delta’s Strategy in the Airline Industry

Delta Airlines operates in a highly competitive airline industry where each of the four largest airlines in the U.S. holds approximately 20% market share. To maintain its position, Delta has developed a robust strategy that focuses on consolidation, customer satisfaction, and innovation.

One key aspect of Delta’s strategy is its dominance in key hubs, including Atlanta, Detroit, Minneapolis, and NY’s LaGuardia, with expanding operations in Seattle. By controlling these strategic locations, Delta can offer a comprehensive network of flights and convenient connections for its customers, contributing to its competitive advantage.

Delta Airlines sets itself apart from its competitors by boasting an average aircraft age of 17 years, older than its major rivals. While some may view this as a disadvantage, Delta leverages its older fleet to provide a reliable and cost-effective operational model.

In addition, Delta has a global reach with investments in airlines across Latin America, Europe, and Asia. These investments help Delta expand its market presence, access new customer segments, and enhance revenue streams.

To cater to high-paying business travelers, Delta Airlines has prioritized customer satisfaction and introduced industry-first strategies like the Basic Economy fare. This fare class targets price-sensitive customers while preserving the premium experience for business travelers, allowing Delta to effectively compete with low-cost carriers.

Delta Airlines showcases its commitment to employees and promotes employee loyalty and engagement through various initiatives. After emerging from bankruptcy in 2007, Delta instituted an employee profit-sharing program and implemented a unique stock ownership plan, allocating 15% of the company’s equity to pilots, flight attendants, ground crew members, and support staff. These actions have fostered a sense of ownership and motivation among employees, positively impacting Delta’s overall performance.

Furthermore, Delta Airlines has strategically acquired minority stakes in overseas carriers, such as Aeroméxico, Brazil’s GOL, and Virgin Atlantic. These partnerships strengthen Delta’s global network and provide valuable synergies, contributing to the company’s revenue growth and competitive advantage.

Notably, Delta Airlines has also focused on lowering fuel costs, a significant expense in the airline industry. The company’s acquisition of the Trainer oil refinery outside Philadelphia has allowed it to directly source and refine its own fuel, effectively reducing fuel costs and enhancing profitability.

Additionally, Delta Airlines is the only U.S. airline to own and control its reservations system. This ownership provides Delta with more control over its operations, enabling the company to streamline processes and deliver a seamless customer experience.

Thanks to its strategic initiatives and strong performance, Delta Airlines has positioned itself as one of the healthiest and most profitable airlines globally. By continuously evaluating and evolving its strategy, Delta remains competitive in the dynamic airline industry.

The General Environment and Industry Factors

The airline industry operates in a dynamic environment influenced by various external factors. These factors include political, economic, and environmental concerns that shape the industry landscape and impact the performance of airlines like Delta Air Lines.

Political Factors

Political factors play a significant role in the airline industry. Governments impose regulations and restrictions on air travel, affecting operations and revenue. Travel bans, visa requirements, and security measures are just some examples of how political decisions can impact airlines. For Delta, 70% of its net sales in the airline segment come from the U.S. market, making it particularly vulnerable to political developments in the country.

Economic Factors

Economic factors also have a profound impact on the airline industry. Fluctuations in fuel prices directly affect profitability, as aviation fuel is one of the largest operating costs for airlines. Economic recessions and downturns can lead to decreased demand for air travel, affecting revenue. On the other hand, strong economies drive increased business and leisure travel. Delta Air Lines has experienced fluctuations in its equity since 2007, with improvements observed post-recession in 2008.

Environmental Concerns

Environmental concerns, such as climate change and sustainability, are increasingly important in the airline industry. Airlines face pressure to reduce their carbon footprint and adopt more sustainable practices. Natural disasters, such as hurricanes or volcanic eruptions, can disrupt flight operations and impact demand for travel. Delta is committed to environmental sustainability and continuously implements initiatives to reduce its environmental impact.

These political, economic, and environmental factors collectively create a challenging landscape for the airline industry. Delta’s current strategy focuses on consolidation and alliances to navigate these challenges. However, factors like fuel prices, competition, and political instability pose ongoing obstacles for the company. Nevertheless, the importance of the airline industry, particularly in catering to the preferences of millennial travelers, remains evident.

The airline industry operates within a competitive landscape driven by price and quality. Delta Air Lines, with its extensive domestic and international network, serves around 320 destinations in about 60 countries. The company’s alliance with SkyTeam provides access to more than 900 destinations across 170 countries globally. This broad reach enhances Delta’s competitiveness in the market and allows it to cater to diverse customer needs.

Next, we will explore the reliability and customer experience offered by Delta Air Lines, exploring how these aspects contribute to the company’s success in the airline industry.

Reliability and Customer Experience

When it comes to reliability and customer experience, Delta Airlines stands out as a top choice for travelers. In fact, Delta is consistently rated as one of the most reliable airlines in the industry, with a significantly lower flight cancellation rate compared to its competitors like American Airlines. This reliability ensures that passengers can trust Delta to get them to their destinations on time and with minimal disruptions.

But Delta Airlines doesn’t stop at just being reliable. The company is dedicated to providing exceptional customer service and creating a luxurious travel experience for its passengers. With a focus on attention to detail and personalized service, Delta ensures that every interaction with its customers is met with professionalism and care.

One of the ways Delta enhances the customer experience is through its extensive investment in modern technologies. The Fly Delta app, for example, has recorded over 1 billion unique app engagements in 2023 alone. This app allows passengers to easily manage their bookings, track their flights, and access various in-flight entertainment options, providing a seamless travel experience.

Additionally, Delta has invested over $12 billion in the last 10 years to build state-of-the-art airports of the future. These airports offer modern amenities and facilities, further enhancing the overall travel experience for Delta passengers.

Delta’s commitment to customer satisfaction is evident in its accolades and rankings. The airline has consistently received top honors in prestigious studies, such as the J.D. Power North America Airline Satisfaction Study, where it ranked No. 1 in multiple categories including Flight Crew, Aircraft, In-flight Service, and Baggage Claim. Furthermore, Delta outperformed its closest competitor by 11 points in the Flight Crew category alone.

Notably, Delta’s focus on customer satisfaction extends to its premium offerings. In the J.D. Power 2023 North America Airline Satisfaction Study, Delta received top honors for Premium Economy Class, highlighting its commitment to providing a luxurious travel experience for all passengers.

As a result of its dedication to customer service and exceptional travel experiences, Delta has been recognized by industry experts and organizations. Cirium has honored Delta with the distinction of operational excellence for three consecutive years, and Fortune magazine has consistently ranked Delta as one of the “100 Best Companies to Work For”. Additionally, Delta Airlines has been named the most admired airline for the tenth time in eleven years and has held the top spot in the Business Travel News Annual Airline survey for an impressive ten consecutive years.

Overall, Delta Airlines sets the standard for reliability and customer experience in the airline industry. With its commitment to exceptional service, ongoing investments in innovative technologies, and recognition from industry leaders, Delta continues to elevate the travel experience for its passengers, making every journey a luxurious and memorable one.

COVID-19’s Effect on the Airline Industry and Delta

The COVID-19 pandemic has left a profound impact on the airline industry, with Delta Airlines being no exception. The industry as a whole faced significant challenges, including a colossal decline in bookings and revenue.

However, Delta Airlines took proactive measures to navigate the crisis. The company implemented dynamic scenario planning, allowing them to make agile decisions and strategic adjustments to minimize financial losses compared to industry averages.

Throughout the pandemic, Delta Airlines prioritized customer safety and satisfaction. The airline implemented extensive health protocols and offered flexible booking options, enabling passengers to travel with confidence.

Despite the challenges, the airline industry has witnessed a gradual recovery in travel demand post-pandemic. Delta Airlines maintained operational efficiency through flexibility in route planning and operational adjustments, placing them in a better position for recovery compared to some competitors.

Efficient cost management and strategic maneuvers were instrumental in Delta’s financial resilience during the pandemic. Despite a significant revenue loss of 66% in 2020, Delta Air Lines generated an impressive $50.6 billion in operating revenue in 2022, making it the most profitable airline in the world.

Delta Airlines also displayed an unwavering commitment to their workforce. They did not lay off a single employee during the pandemic, showcasing their dedication to their team during challenging times.

Additionally, the airline implemented rigorous COVID-19 safety protocols, including blocking the purchase and use of middle seats from April 2020 to April 2021 to enable social distancing. They enlisted the expertise of the Mayo Clinic to advise on cleaning protocols and ventilation practices, ensuring the utmost safety for employees and passengers.

Under the leadership of CEO Ed Bastian, Delta Air Lines emphasized the importance of transparency and communication during these trying times. Their efforts, including the introduction of the Delta CareStandard and partnership with Lysol for certified disinfection procedures, have instilled confidence in travelers.

As the airline sector undergoes significant transformation, companies like Delta Airlines are displaying adaptability and strategic resilience. Despite the challenges posed by the COVID-19 pandemic, Delta Airlines has emerged as a strong and resilient force in the industry, with a focus on customer satisfaction, employee well-being, and financial stability.

Route Network and Fleet Strategy

Delta Airlines has developed an extensive route network, offering connectivity to over 280 destinations across six continents. The company operates core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hubs in cities like Los Angeles and New York.

Atlanta, Delta’s largest hub, plays a crucial role in the company’s route network, accounting for approximately 20% of all departing seats. In fact, Delta is poised to fly more than 10 million seats from Atlanta in a single quarter, demonstrating the scale of its operations at this hub. This surpasses the busiest hubs of other major carriers, such as American in Dallas-Fort Worth (15%) and United in Newark (11%).

Delta’s route network extends beyond domestic destinations. Last quarter, the airline’s top international revenue-generating route was London Heathrow , highlighting its global reach and appeal. Cancun also ranked among the top international routes for Delta.

Connecting Passengers and Diversified Routes

Delta Airlines understands the importance of connectivity in its route planning. On the Atlanta-Los Angeles route, over half of all passengers are connecting, highlighting Delta’s ability to provide seamless travel options and convenient connections. Similarly, on the Atlanta-Paris route, approximately 90% of passengers are connecting.

To meet the diverse travel needs of its customers, Delta Airlines offers nonstop flights from its hubs to various destinations worldwide. Before the pandemic, Delta operated nonstop flights to five Asian cities from Detroit, including Tokyo, Nagoya, Shanghai, Beijing, and Seoul. Additionally, the airline’s Boston network has experienced significant growth, with almost 40% more seats offered compared to 2019. This expansion includes new routes to destinations such as Rome, Tel Aviv, Phoenix, and San Diego.

Fleet Management and Efficiency

Delta Airlines prioritizes fleet management to ensure operational efficiency and environmental sustainability. The company strategically retires older aircraft and replaces them with more fuel-efficient models. This approach not only helps reduce emissions but also improves cost-effectiveness in the long run.

With its diverse fleet, Delta Airlines can cater to different types of routes and passenger demands. The airline’s focus on fleet modernization aligns with its commitment to providing a seamless travel experience while minimizing the environmental impact.

Delta Airlines operates as an extensive international airline, with a global coverage spanning 328 destinations across 64 countries . Its route network, combined with efficient fleet management, allows the airline to serve a wide range of customers, whether they are traveling domestically or internationally.

By continuously adapting and expanding its route network, optimizing fleet strategies, and offering a high level of global coverage, Delta Airlines solidifies its position as one of the world’s leading airlines.

Delta’s Focus on Customer Satisfaction

Customer satisfaction is a top priority for Delta Airlines. The company understands that providing a positive customer experience is key to building and maintaining a loyal customer base. Delta’s commitment to exceptional service has been recognized through numerous prestigious awards and accolades.

To ensure a seamless and enjoyable journey for passengers, Delta invests heavily in operational performance. By focusing on efficiency and reliability, the airline aims to exceed customer expectations at every touchpoint. From check-in to baggage claim, Delta strives to provide a hassle-free travel experience.

Central to Delta’s commitment to customer satisfaction is its loyalty program, SkyMiles. With a large membership base, SkyMiles offers a range of benefits for frequent flyers. Members can earn miles through travel, credit card purchases, and partnerships with various brands. These miles can be redeemed for flights, upgrades, and other exclusive rewards.

Through SkyMiles, Delta provides additional advantages to its loyal customers, such as priority boarding, access to airport lounges, and complimentary upgrades. The loyalty program enhances the overall customer experience and fosters a sense of appreciation and recognition for Delta’s most frequent travelers.

Furthermore, Delta has partnered with American Express to offer even more exclusive benefits to SkyMiles members. The Delta SkyMiles American Express Card provides cardholders with additional perks, such as bonus miles, priority boarding, and free checked bags.

In addition to its commitment to customer satisfaction, Delta Airlines prioritizes safety, innovation, and sustainability. The airline continues to introduce new technologies and initiatives to enhance the travel experience and reduce its environmental impact.

Accolades and Recognition

Delta Airlines has been honored with numerous industry awards, affirming its commitment to providing an exceptional customer experience:

In the Business Traveller’s Asia-Pacific Awards, Delta has consistently been recognized as the best North American airline, winning the prestigious title multiple times, including in 2020, 2017, and 2016.

Delta Airlines also holds a prominent position on Forbes’ World’s Best Employers list, ranking No. 20. This recognition reflects the airline’s commitment to its employees and fostering a positive work environment.

The airline has received industry accolades highlighting its exceptional performance:

• Stella Awards Gold for Best Airline
• 2021 Prevue Visionary Award for best overall U.S. carrier by Travel Weekly Magellan Awards
• TravelAge West Wave Awards for Best Pandemic Response, Best Airline Vacation, and Best Tour Operator, Caribbean

Furthermore, Delta Airlines was recognized as the No. 1 airline in customer satisfaction in North America by the J.D. Power 2021 North America Airline Satisfaction Study. This prominent recognition underscores Delta’s continued dedication to providing a superior travel experience for its customers.

Commitment to Environmental Sustainability

Delta Airlines recognizes the importance of environmental sustainability and has made significant commitments to reduce its impact on the planet. The airline has implemented a range of sustainability initiatives to address key environmental challenges, such as greenhouse gas emissions and waste management.

With a comprehensive sustainability strategy, Delta aims to achieve net-zero greenhouse gas emissions by 2050. To achieve this goal, the airline has set ambitious targets in various areas of its operations.

Reducing Greenhouse Gas Emissions

Delta understands that the majority of an airline’s carbon footprint is attributed to jet fuel. To combat this, the company is working to secure 200 million gallons of Sustainable Aviation Fuel (SAF) offtakes and has signed sustainable fuel agreements with approximately 50 corporate customers. Delta is committed to achieving 95% or more SAF usage by 2050. This transition to SAF will lead to a significant reduction in greenhouse gas emissions.

To further reduce emissions, Delta plans to electrify 50% of its ground support equipment (GSE) by 2025 and aims to have all Delta hubs with 100% electrified GSE by 2035. Through these initiatives, the airline expects to see up to 30% reductions in fuel burn and emissions.

Waste Reduction and Resource Conservation

Delta is also committed to waste reduction and resource conservation. The airline has successfully reduced single-use onboard plastics by nearly five million pounds annually. Delta aims to divert 100% of waste from landfills by 2050 and has set a target of achieving 65% waste diversion from landfills by 2035 in relation to the customer onboard and in-airport travel experience.

Additionally, Delta plans to achieve 100% waste diversion from landfill in its customer travel experience by 2035. The company has purchased more than 500 new electric Ground Support Equipment (GSE) in 2023 to support its sustainability goals and aims to have 100% of preferred vendors with net-zero plans by 2050.

Revolutionary Aircraft and Addressing Contrails

In line with its commitment to fuel efficiency and emissions reduction, Delta aims to have 25% of its fleet comprised of revolutionary aircraft by 2050. These aircraft are expected to deliver a fuel efficiency gain of over 40% compared to 2019 models. The company also targets an 80% reduction in addressable warming contrails by 2050.

Delta’s sustainability efforts have not gone unnoticed. The airline’s Carbon Council has already driven initiatives that saved over 10 million gallons of fuel and launched the MIT contrails collaboration by 2025. Delta is determined to achieve a 100% reduction in addressable warming contrails by 2050.

Delta’s commitment to environmental sustainability goes beyond meeting regulatory requirements. The airline is actively working towards a net-zero supply chain and aims to achieve a 100% net-zero supply chain by 2050. With these measures in place, Delta is taking significant steps to make air travel more environmentally friendly while meeting the growing demand for sustainable transportation options.

Key Takeaways and Implications of Delta Airlines’ Business Model

Delta Airlines, with its comprehensive business model, has established a competitive advantage in the highly competitive airline industry. The company’s strategic approaches, including system lock-in, total customer solutions, and best product positioning, have contributed to its success and market leadership. These approaches have allowed Delta to effectively cater to the needs of its target market, which includes upper middle class and business travelers.

Delta’s focus on customer satisfaction and operational excellence has helped the airline maintain a strong brand equity and a loyal customer base. The company’s strategic merger with Northwest Airlines and its strong hub in Atlanta have further strengthened its position in the industry.

Amidst challenges such as intense competition, reputation damages, and fuel price hikes, Delta has shown resilience by making strategic decisions to improve its cost structure and cash flow. The company’s efforts to reduce operating expenses, along with the benefit of fuel price declines, have resulted in improved financial performance. With a record operating revenue of $14.2 billion in the December quarter of 2023 and an increase in pre-tax income, Delta is poised for growth and profitability.

Looking ahead, Delta Airlines anticipates achieving a free cash flow of $3 to $4 billion in 2024, demonstrating its commitment to financial stability and growth. The company’s focus on revenue generation, cost management, and operational efficiency will be crucial in navigating the changing market conditions and ensuring sustained success in the future.

What is Delta Airlines’ business model?

Delta Airlines’ business model focuses on strategic alliances, customer satisfaction, and operational excellence.

How many destinations does Delta Airlines serve?

Delta Airlines serves approximately 320 destinations in 60 countries.

What is Delta Airlines’ strategy in the airline industry?

Delta Airlines’ strategy emphasizes consolidation and customer satisfaction.

What factors impact the airline industry?

The airline industry is impacted by political factors, economic factors, and environmental concerns.

How does Delta Airlines prioritize customer experience?

Delta Airlines prioritizes customer experience by investing in operational performance and offering premium products for a luxurious travel experience.

How has the COVID-19 pandemic affected Delta Airlines?

The COVID-19 pandemic has resulted in revenue loss and forced Delta Airlines to make cost-cutting measures and fleet reorganization.

What is Delta Airlines’ route network?

Delta Airlines has over 280 destinations served on six continents.

How does Delta Airlines focus on customer satisfaction?

Delta Airlines focuses on customer satisfaction through its loyalty program, SkyMiles, and partnerships with companies like American Express.

What are Delta Airlines’ sustainability initiatives?

Delta Airlines is committed to achieving net-zero greenhouse gas emissions by 2050 and implements various initiatives to reduce its environmental impact.

What are the key takeaways from Delta Airlines’ business model?

Delta Airlines’ key advantages include its strategic alliances, strong customer satisfaction focus, extensive route network, and commitment to sustainability.

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Delta spotlights strengthened competitive advantages and brand momentum

NEW YORK, Dec. 16, 2021 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today presents its plan for leading the air travel industry through the next phase of the recovery, powered by an intense focus on customers, the strength of its trusted consumer brand and its values-based, people-centric culture of service.

The airline is presenting its strategic priorities at its Capital Markets Day for the investor community, hosted at the New York Stock Exchange in New York City.

"It's clear that the pandemic stress-tested the people of Delta in unprecedented ways, and our competitive advantages not only endured but were strengthened throughout the crisis," said Ed Bastian, Delta's CEO. "Delta is outperforming the industry, and our path forward to leading the next phase of the recovery is taking shape thanks to the incredible work of our 75,000 people worldwide."

During the event, senior leadership will discuss how Delta is expanding its platform to create value over the long term. Highlights from the day will include:

• Competitive Advantages:  Delta's actions during the pandemic further strengthened its competitive advantages and enhanced its position as a trusted consumer brand.
• Industry Leadership:  Delta is leading the industry operationally and financially by demonstrating agility, operational excellence and discipline.
• Brand Preference:  Delta continues to elevate the customer experience through its best-in-class service and by investing across the travel ribbon, enhancing brand preference and loyalty.
• Earnings Power:  Delta expects to deliver meaningful profitability in 2022 on its path to improved earnings power beyond pre-pandemic levels by 2024.
• Financial Foundation:  Delta's top financial priority is restoring its financial foundation, with a focus on efficiency and cash generation to achieve investment grade metrics by 2024.

"As our profitability improves, we are focused on reducing debt and strategically investing to build on our leadership position," said Delta CFO Dan Janki. "We have a compelling strategy that we believe will allow us to exceed 2019 financial performance, deliver industry-leading margins and generate significant cash to de-lever the balance sheet over the next three years."

Delta's financial targets will be discussed in greater detail at the event, and include the following:

Financial Targets:

Additional Metrics and Assumptions:

• 2024 operating margin in mid-teens
• 2024 operating cash flow > $9B
• 2024 adjusted debt / EBITDAR between 2.0x and 3.0x
• 2024 ending liquidity between $5B and $6B
• 2024 ROIC in the mid-teens

"As we look ahead, our priorities are strengthening our trusted consumer brand, restoring our financial performance and building a better future for our people and our planet," Bastian said. "Our ambition is to transcend the industry and create significant long-term value for our people and our owners. As reconnecting the world becomes more important than ever, we are accelerating our path to reshape and redefine air travel."

Delta also issued an investor update, raising December quarter financial guidance. The airline now expects to generate an adjusted pre-tax profit of ~$200 million in the December quarter.

Capital Markets Day will begin at 8:15 a.m. Eastern Standard Time and includes presentations from Bastian and Janki as well as Delta President Glen Hauenstein and President-International Alain Bellemare. It also will feature a Q&A with Bastian and Stephen J. Squeri, Chairman and CEO of American Express, in which they will discuss the growing value of the partnership between the two companies in the recovery and beyond.

Attendance in person is by invitation only. Presentation slides and a live webcast will be available on Delta's Investor Relations website at https://ir.delta.com . A replay of the event will be available shortly after the event.

About Delta

Delta Air Lines is the U.S. global airline leader in safety, innovation, reliability and customer experience. Powered by our employees around the world, Delta has for a decade led the airline industry in operational excellence while maintaining our reputation for award-winning customer service.

Today, and always, nothing is more important than the health and safety of our customers and employees. Since the onset of the COVID-19 pandemic, Delta has moved quickly to transform the industry standard of clean to ensure a safe and comfortable travel experience for our customers and employees.

With our mission of connecting the people and cultures of the globe, Delta strives to foster understanding across a diverse world and serve as a force for social good.

Forward Looking Statements

Statements made in this press release that are not historical facts, including statements regarding our financial targets, should be considered "forward-looking statements" under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees or promised outcomes and should not be construed as such. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the material adverse effect that the COVID-19 pandemic is having on our business; the impact of incurring significant debt in response to the pandemic; failure to comply with the financial and other covenants in our financing agreements; the possible effects of accidents involving our aircraft or aircraft of our airline partners; breaches or lapses in the security of technology systems on which we rely; disruptions in our information technology infrastructure; our dependence on technology in our operations; our commercial relationships with airlines in other parts of the world and the investments we have in certain of those airlines; the effects of a significant disruption in the operations or performance of third parties on which we rely; failure to realize the full value of intangible or long-lived assets; labor issues; the effects of weather, natural disasters and seasonality on our business; the cost of aircraft fuel; the availability of aircraft fuel; failure or inability of insurance to cover a significant liability at Monroe's Trainer refinery; failure to comply with existing and future environmental regulations to which Monroe's refinery operations are subject, including costs related to compliance with renewable fuel standard regulations; our ability to retain senior management and other key employees, and to maintain our company culture; significant damage to our reputation and brand, including from exposure to significant adverse publicity; the effects of terrorist attacks, geopolitical conflict or security events; competitive conditions in the airline industry; extended interruptions or disruptions in service at major airports at which we operate or significant problems associated with types of aircraft or engines we operate; the effects of extensive government regulation we are subject to; the impact of environmental regulation, including increased regulation to reduce emissions and other risks associated with climate change, on our business; and unfavorable economic or political conditions in the markets in which we operate or volatility in currency exchange rates.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and our Quarterly Report for the quarterly period ended September 30, 2021. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of the date of this press release, and which we undertake no obligation to update except to the extent required by law.

Non- GAAP Financial Measures

Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

Delta is not able to reconcile forward looking non-GAAP financial measures without unreasonable effort because the adjusting items will not be known until the end of the period and could be significant.

SOURCE Delta Air Lines

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Delta CEO Ed Bastian on Leading an Airline Through Two Years of Pandemic Disruptions

Summary .   .

Ed Bastian, CEO of Delta Air Lines, leads a company that has been on the front lines of pandemic challenges. The majority of Delta’s workforce doesn’t have the option of working from home. Over the past two years, Delta has won widespread praise for its handling of the complexities resulting from Covid, and Bastian has developed ideas and strategies for how a company can not only survive during crisis, but thrive.

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A ‘business imperative’: Delta outlines roadmap to more sustainable travel

Delta’s Chief Sustainability Officer Pam Fletcher outlines the company’s bold strategy for achieving net zero-emissions and more sustainable travel by 2050, including scaling the sustainable fuel market, innovating for the fleet of the future, addressing single-use plastics and encouraging net-zero supply chains. INTERACTIVE | Path to sustainability

From pursuing sustainable aviation fuels and more efficient aircraft to reducing single-use plastics and encouraging a net-zero supply chain, Delta announced its roadmap to more sustainable travel and net-zero emissions by 2050. The strategy and goals are inspired by what is good for the planet, communities and Delta people, and driven by a recognition that sustainability is a business imperative.

Delta Chief Sustainability Officer Pam Fletcher first shared the strategy with the airline’s more than 90,000 employees in late February. It’s focused on two pillars: embedding sustainability in everything the airline does and eliminating the company’s climate impact from flying.

“Delta people are known for doing difficult things well,” Fletcher said in an email to all employees on Feb. 28. “As we reshape the fundamentals of aviation, we are as dedicated to making immediate progress as we are to investing wisely in disruptive solutions.”

The reduction of fossil fuels and an evolution to Sustainable Aviation Fuel (SAF) is at the forefront of Fletcher’s mid-term strategy. After all, the fuel that powers jets accounts for around 98% of an airline’s carbon footprint.

Delta’s sustainability strategy also accounts for near-term goals, including minimizing Delta’s impact from single-use plastic, transitioning to electric ground service equipment, and encouraging vendors in its supply chain on their own sustainability plans.

Fletcher, a well-known leader in the transportation sector, joined Delta in 2022. Her outlined sustainability strategy builds on the company’s ongoing progress and affirms its commitment to setting goals aligned and informed by science and proven metrics to ensure accountability and transparency.

Delta has outlined bold aspirational goals for 2050 as well as a series of incremental milestones to measure its progress along the way.

“We’ve already achieved significant results, like reducing single-use onboard plastics by nearly five million pounds annually and saving 10 million gallons of fuel last year thanks to the work of Delta’s Carbon Council,” Fletcher said. “Our foundation is strong. Now we accelerate.”

SUSTAINABILITY IN ACTION TODAY

Starting with the most visible aspects of Delta’s business, Fletcher shared how the airline is embedding sustainability in everything Delta does by focusing on three key areas:

• ​​​​​​ The Travel Experience. From curb to claim, the airline is doubling down on getting as close to eliminating single-use plastics as possible while diverting waste from landfills. For example, artisan-made amenity kits from Mexico-based brand Someone Somewhere are eliminating five single-use plastic items on board, reducing Delta’s annual plastic use by up to 90,000 pounds. Ongoing efforts also include partnerships with airports, regulators and others to increase investments in composting and recycling while identifying more sustainable products that elevate the customer experience.

*Relating to our customer onboard and in-airport travel experience; other airline operations (e.g., maintenance) are excluded.

• Supply Chain. Delta is driving industry-wide change by encouraging its thousands of vendors to develop their own path to net-zero. It is the first U.S. airline to partner with EcoVadis , a provider of business sustainability ratings, to increase the transparency of its supply chain processes and ensure suppliers’ values and ethics are aligned with Delta’s.
• Ground Operations & Facilities. Delta ground equipment electrification is well underway, including nearly 100% electrification at Boston Logan International Airport (BOS) and Salt Lake City International Airport (SLC). Meanwhile, Delta is including LEED standards in its facility transformations and offering more sustainable supplies for its offices and cafeterias.  

*Core fleet consists of baggage tractors, belt loaders and aircraft tow tractors **All eligible core & critical fleets necessary to turn an aircraft

THE FUTURE OF FLYING

While high-quality carbon offsets were considered a valuable tool in the past, Delta’s sustainability vision today is much broader and centered on advancing sustainable solutions that can decarbonize the industry with the urgency required. Fletcher described a long-term strategy of decarbonization centered on eliminating the company’s climate impact from flying through investments in:

• ​​​​ Efficient Aircraft Operations. Delta will continue reducing fuel consumption, advocating for more efficient air traffic control coordination and innovating new technologies with partners like Aero Design Labs to lower fuel burn. Through a collaboration with MIT , the airline is also studying contrails that trap heat in the earth’s atmosphere.

*Subject to successful completion of MIT contrails study, and provided that contrail avoidance can be done in a way that is consistent with Delta’s ops, economic and environmental objectives †Compared to 2019

• Clean Fuel. Sustainable aviation fuel (SAF) is the most promising lever known today to accelerate progress toward a net zero future – it can use the existing fuel infrastructure to get it to airports and is safe to use in current aircraft engines. Unfortunately, there isn’t enough SAF today to fuel an airline Delta’s size for a single day. Delta is working to build demand, attract investment and encourage incentives to scale the market so all airlines can access more sustainable fuels. To date, the company has secured 200 million gallons of SAF offtakes and has approximately 50 corporate customers signed on to their sustainable fuel agreements.
• Revolutionary Fleet . Though a fully sustainable long-haul aircraft has yet to be invented, Delta — with its world-class technical expertise and financial investments — is uniquely positioned to partner with aviation innovators to forge the path for the next century of flight. Delta’s partnership with Airbus , for example, is focused on the potential for hydrogen-powered aircraft. Its efforts toward electric flight with partner Joby Aviation to provide home-to-airport transportation services reflect the disruptive innovation needed to revolutionize the industry.

†Compared to 2019

The magnitude of this challenge means that no single company can do it alone, noted Fletcher. It will take Delta people, partners, industry stakeholders, regulators and others working together to advance environmentally friendly programs and services — all while elevating the travel experience. The vital “spirit of collaboration” will be on display at the Delta Sustainable Skies Lab , which will showcase progress while inspiring the next generation of innovation, she said.

“I am excited about our journey ahead,” said Fletcher. “There’s no better team on the planet to drive the more sustainable future of flying.”

Statements herein that are not historical facts, including statements regarding our expectations and goals, should be considered “forward-looking statements” under the federal securities laws and involve a number of risks and uncertainties that could cause actual results to differ materially from the expectations and goals. These risks and uncertainties include, but are not limited to, those described in our filings with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements except to the extent required by law.

• Sustainability , Pam Fletcher , Sustainable Aviation Fuel