Let me begin as I always do when I blog about Delta or DAL stock. I NEVER buy or sell any airline stocks. I could care less if $DAL stock goes up or down. I am focused on the passenger experience and the frequent flyer (and elite) program. With that said let’s touch on some of the highlights that caught my attention.
The Delta CEO Ed Bastian.
He talked much about low system growth and capacity discipline as they have for years. What this means in layman’s terms is keeping seats at about the level they are now so there is no need to lower prices. In case you have not been on a Delta jet recently – they are really full – thus they can charge almost whatever they want and often more than the competition.
The one really interesting part that Ed talked about was during the Q&A from analysts and reports about the Bombardier C-Series jet that could have a 300% trade tariff imposed. He stated that Delta will NOT pay those tariffs and will only pay the agreed price (we do not know exactly what that price is). Delta still plans to take delivery of the planes – but they may be delayed due to the tariff issue.
Lastly, he talked about the tropical storms and disasters and that he felt Delta has done an amazing job getting folks out of harm’s way and capping prices of tickets for these flights. I suggested in my post I doubt they would be losing money on these flights while some readers disagreed. Well, it seems I was right as he said those capped fares were “no big deal” in regard to the bottom line – but the canceled flights were in regard to earnings and costs.
The Delta President Glen Hauenstein.
This man is either the spokesman or the architect of so much pain for us as loyal Delta flyers. He mentioned how much money Delta is making off of “post purchase options” i.e. folks buying 1st or C+ after buying the tickets and that “sell-ups remain high”. Know this means fewer upgrades for us! My wife and I both busted up laughing when he mentioned SkyMiles is a “premier loyalty program” and he is proud of the team – I am more #DeltaShame vs #DeltaProud when it comes to the SkyMiles folks and my guess is you are too.
Also touched on was we can expect more and more customer choice and innovation i.e. more money extracted from you and me for what we got free before. Sigh… I can’t wait to see what he dreams up next!
Glen did brag about the CLEAR partnership (ok, I love that too) as well as the EPQS and video agent chat (I think the latter is just creepy). Of interest to me was cuts in capacity to the Caribbean (not surprising, but could be good for some mileage runs and easy upgrades) and less capacity to Europe due to Air Berlin collapse.
Lastly, he had one gem and that is that Premium Select (PS) will be coming to European flights next spring and my guess this will not be on new A350s but on the 777 mods! That is sweet and exciting news to me. I have for a long time now said that the PS experience will be similar to the old BE or business elite service from NWA way back when. Plus, for a 6-8 hour ride, I think this seat will be just fine as well as the much better than coach service and offerings. Lastly, I hope, it can be a real sweet spot for SkyMiles redemptions. For me the key will be sticking with 2-4-2 seating in PS. I hope the 777 extra one foot of interior cabin width does not give Delta any stupid ideas (the 777er is 19’3″ vs. the A350 is 18’4″).
The Delta Chief Financial Officer Paul Jacobson
The only bits that really grabbed me from Paul was that Delta did park 2 more 757s and have written them off and they are adding 26 new narrowbodies this year. He also mentioned that revenue needs time to catch up with higher fuel costs so expect ticket prices to go up next year. Also this is the last Q of fuel hedging losses that has cost Delta a BOAT LOAD of cash for years (I am sure those VPs got stock bonus deals anyway). Oh and the Delta Trainer refinery will save Delta 100 million this year. Interesting!
Nothing, I mean nothing, was said about the new 1/4 million MQD exempt spend number nor did any reporters ask about it! 🙁
So there you are. From a passenger standpoint that is what stood out to me from the earnings call. Did you catch the call? If not you can read the full transcript HERE. – René
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