My take on today’s Delta 1Q16 conference call. Bombardier? AMEX, FCM, branded fares & more!

This post contains references to products from one or more of our advertisers. We will receive compensation when you click on links to those products. For an explanation of our Advertiser Disclosure, and advertiser partners, such as American Express, CreditCards.com and others visit this page.

 

 

delta 1Q16 earnings call

I would venture to guess very few Delta flyers spent their morning listening to Delta Air Lines  $DAL  1Q16 financial conference call, but if you had you would have taken away some interesting bits.

To a man they all put forward that everything is great at Delta. They are crushing it financially and will continue to do so going forward (gosh I hope they share with the Pilots some of this gain after all the cuts they took). They focused on the fact that Delta has a “premium product” as well as “travel experience” and international growth is looking great going forward.

Selling Comfort Plus or C+ seats has grown 45%. They see that continuing as well. Again, anyone who thinks Diamonds and Platinums will forever get “instant” C+ upgrades as 16MAY16 comes and goes just has not looked at the numbers. Incoming Delta president Glen mentioned that they have the “best revenue team in the business” and that all but screams to me to expect less unless you pay more and that will even include C+. Oh, and 1st class sales grew by 12%, and that is again one of the reasons we are all seeing less and less upgrades to the pointy end of the jets (well, that and the selling upgrades for under $10 one would assume).

American Express contributed 80 million dollars to Delta in 1Q16 and they said for the year it will be 265 million. That is a TON of SkyMiles from Delta cards folks. Delta is selling them at a high price to AMEX and trying to have you spend them on $250 per bottle wine in the Sky Clubs to earn even MORE when you burn them. I am here to help that not happen! 😉

Delta has, for now, stopped hedging fuel. That is good as the per gallon price for Delta was down 55% over last year. However, there are still some hedging losses that will carry over to this year from last year.

During the non-financial Q&A, one of the reporters asked about Delta’s change to the way they charge for tickets from one-way vs multi-segment booking on Delta.com, which I blogged about this morning. I do not remember who answered but they said they would not talk about this topic and the reporter just “smacked them down” that other industrial investment grade companies do talk about these topics and it was not good that Delta would not. It was shocking and I bet that reporter will NOT be invited back to another live Q&A with Delta folks! I loved it.

As a wrap-up from president Glen, we were told that Delta is separating themselves from the “pack”, and I assume he means other domestic airlines, with their product and services. I very much like the Delta 1st class and Delta ONE products but it is by no means the best in the world. He also talked about the fact that there has been a deepening impact of lower fares across many markets. Yeah, we have seen some amazingly low priced Delta elite mileage runs this year so far, many in 1st class even!

Questions were asked about what narrow body jet Delta is looking at, a.k.a. my post this month that it all but looks like Bombardier CS jets are coming to Delta. The question was pushed, and we were told more would be forthcoming in May. So, we wait and see but from what I am reading it looks more and more like I was right and the CS jets will be coming to Delta. We will not have to wonder too much longer to know for sure.

The funniest parts were at the end of the call in regards to Jet Blue’s MINT product between NYC and SEA and Delta said they have some flat bed jets between those markets. Nothing said that they will go all flat bed like NYC to SFO & LAX. Another funny bit was a question about Korean air. Much like Alaska, Delta treats Korean like a “frenemy”, that is they are friends and enemies at the same time. CEO Ed said Korean is an important partner and he is sure they feel the same as well. I am not so sure about that one, Ed!

Did you listen in and take away any other interesting bits as a Delta flyer? – René

 

 

The Business Platinum® Card from American Express OPEN
 

2 comments

  1. That reported who talked back was in an Equity Research guy from JP Morgan, so he will definitely be invited back.. Touché for him calling them out on this.

  2. @Brian – Thanks! I was too busy for REAL hooting out loud to get who it was. Yes, it was great he called them out!

Leave a Reply

Your email address will not be published. Required fields are marked *