DL today reported their June operating performance.

RPMs:


........................ June '19 .........................June '18 ......................... Increase %
Domestic ............. 14,118,714................ 13,078,646 .................... 8.0
Int'l ................... 9,668,351................. 9,361,074 ............................. 4.4

System L/F ............. 90.9.................. 88.0 ................ ........... 2.9 Points

[*]



IMO, This is a large YOY increase in traffic.

While increasing ASM's by 4.0% system-wide, they gained a 6.2% increase in RPM.

If this traffic pattern holds, with an avoidance price wars, DL will have a nice increase in earnings per share.

And today, DL announced an Q2 2019 adjusted pre-tax margin of 15-16%, vs 14% a year ago.

Nice job!

91% domestic load factor is insane. Explains why I keep finding flights completely sold out multiple days before departure...

I wonder how much of this is a windfall from the MAX groundings versus organic growth.

Unfortunately both their A14 stats and completion factors were down this year (probably understandable as I figure everyone took a hit this June.. lots of heavy TX days in both the Northeast and Atlanta, not to mention DFW for AA).

I believe Delta Air Lines provides a more quality product than the others.

ethernal wrote:

91% domestic load factor is insane. Explains why I keep finding flights completely sold out multiple days before departure...

I wonder how much of this is a windfall from the MAX groundings versus organic growth.

I suspect taking aircraft out of service at the domestic and near international has very much helped.

Delta's strategy of buying proven (e.g., A321CEO) reduces risk but increases variable costs.

I estimate (back of the envelope) the US lost 3% of capacity (some due to used CEOs being pricier which I speculate slowed AA and G4 growth). Much is due to a great economy. My job market has run out of slack while 3 years ago tens of thousands of engineers were underemployed. The tax cuts for businesses have been great for my career path. Job availability went up right after the cuts.

But DL deserves credit for good service. That retains customers (myself included, even if I prefer B6, but my next flight is DL) as well as doesn't push away people ("I'll never fly XX again!"). The people I know who can easily be pushed away love DL...

Kudos to DL.

Lightsaber

ethernal wrote:

91% domestic load factor is insane.

Systemwide was 90.4%. Welcome to summer.

Everybody wants to talk about MAX groundings (and surely all operating/delayed receipt carriers will be pressing Boeing for compensation) but in the context of nationwide air capacity the ~72 MAX 8 and 9s of WN/AA/UA is nothing. UA has more seat capacity than that solely on Express CR2s and E145s.

Another PR fluff piece

MIflyer12 wrote:

ethernal wrote:

91% domestic load factor is insane.

Systemwide was 90.4%. Welcome to summer.

Everybody wants to talk about MAX groundings (and surely all operating/delayed receipt carriers will be pressing Boeing for compensation) but in the context of nationwide air capacity the ~72 MAX 8 and 9s of WN/AA/UA is nothing. UA has more seat capacity than that solely on Express CR2s and E145s.

Of course it's not a ton. But assuming no changes to anything else, taking out that fleet is still 2%+ reduction of domestic ASM - and growing by the day. That is enough to make a 4% increase 6% - not trivial at all.

91% domestic load factor is - I believe - the highest load factor Delta has ever reported for any month (at least going back to 2016).

Fuel prices went down 10% year on year and fare prices are up domestically due to Easter placement and Max cuts. Aside from wn, which is really affected by Max grounding, shouldn't everyone be getting higher margins vs last year? Seems entirely within expectation for a q2.

Scarebus34 wrote:

Another PR fluff piece

Let's see how you would write it?

Rather than being impressed by the YOY growth I would be more shocked if we didn’t see numbers like this in the current economy.

91% LF means they are really good at capacity management and at these levels means they are spilling a ton of potential passengers all over the place, by design.

By first hand experience, makes IROPs (and non-rev) challenging.

PSU.DTW.SCE wrote:

Rather than being impressed by the YOY growth I would be more shocked if we didn’t see numbers like this in the current economy.

91% LF means they are really good at capacity management and at these levels means they are spilling a ton of potential passengers all over the place, by design.

By first hand experience, makes IROPs (and non-rev) challenging.

Exactly. The travel industry continues to yield record breaking numbers — even “weak” attractions like then Rock ‘N Roll HOF are smashing annual attendance records. At the beginning of the year, trade publications were warning that airlines weren’t adding enough capacity to keep up with the demand... and then the grounding of the 737 Max lead to even less capacity being planned throughout the domestic industry - especially in the summer.

DL’s June performance is hardly amazing; it’d be concerning if they didn’t post those types of numbers.

Scarebus34 wrote:

Another PR fluff piece

One of the reasons these departments exist is to promote positive news. Good news creates value.
Delta stock price was up 1.3% today. American was down 2.1%, Southwest down 0.19% and United up 0.45%. The company owners were clearly satisfied today by the news.

So before we just go by the "another PR full piece" mantra, a few things:
1) DL reports monthly operational performance every month; don't quote me but I believe they are required to do so for DOT reporting
2) The actual press release here https://news.delta.com/delta-reports-op ... -june-2019 has very little "PR fluff" the rest of it is the OP commentary
3) As I said earlier, in this economy and with current travel demand during peak summer, they are EXPECTED to be setting monthly records and YOY growth

DL's consistency is impressive as of late

https://s2.q4cdn.com/181345880/files/doc_news/2019/07/Delta-Reports-Operating-Performance-for-June-2019.pdf

Passengers Boarded
June 2019: 18,908,446
June 2018: 17,692,838
YOY Change: 6.9%

Nice Increase!

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

And for those who have been criticizing Delta for not cancelling flights but delaying them significantly, one side benefit of that is that it provides extra capacity/option for disrupted passengers especially in these periods of 90+% load factors. When airlines are running such high load factors, a flight cancellation will likely result in the inconvenienced passenger not being able to get on a flight for quite a few days. By still maintaining the original flight albeit 12 or 16 hours later, the passenger will have another option besides trying to standby for overbooked flights.

SteelChair wrote:

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

Don't underestimate brand loyalty as well as SkyMiles especially in a good economy. I just booked another flight a few minutes ago, ATL-RDU and compared it against WN who was almost $100 cheaper but chose the DL flight primarily due to frequencies in case I get delayed as well as the SkyMiles. I am sitting at 881k LIfetime and hope to be Diamond early next year. I will pay the extra $100 for the frequencies and the benefits of current platinum and future Diamond status!

All being said, DL has over the years proven to be a customer service leader. That breeds loyalty. However, I do miss the semi empty flights from the late 90's and after 9/11 when upgrades were a dime a dozen and easy to get.

Filling the planes, but increasing the yields. Good time to be a well run airline.

Scarebus34 wrote:

Another PR fluff piece

Seems like great numbers to fluff.

tphuang wrote:

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

I originally posted these Q2 results for a few reasons:

1. A year ago, industry analysts were ringing their hands over the fact that UA, I believe, was discussing 4% YOY increase in ASM's. Their stock took a dump, and so did the rest of the airline industry. So to read that DL had a 6% YOY increase in ASM's was pretty interesting to me. and worth discussing. Where are those nay-sayers now?

2. Yesterday, DL announced revised Q2 2019 earnings guidance suggesting an expected 15-16 Pre-Tax Margin, up from their earlier 14% projection. This too was interesting, as it represents a graphic illustration of DL's brand strategy revenue growth, coupled with some additional revenue reaped from the MAX grounding.

3. I have been involved with the industry for 40 years- and I have NEVER seen a network carrier with a 90%+ system load factor in any month. This is amazing to me. For DL to be running this well with loads this high takes a great deal of precision planning that many Anet posters do not appreciate. And as another Poster stated- it's causing some Spill. That has to have some of the revenue planners eyes bulging.......

Lastly, here is a link to 2018 Q2 Margins from Anet a year ago.

https://www.airliners.net/forum/viewtopic.php?t=1399977

Delta was #2 a year ago. And IMHO, I have not seen many 16% operating margins from a network carrier in Q2 in my 40 years in the industry. I therefore thought that was impressive.

Cheers!

Scarebus34 wrote:

Another PR fluff piece

People on this board can be so negative. It really is sad.

If you don't like a particular airline, for whatever reason, no need to bash it. Just go fly somebody else. You have plenty of choices.

This used to be a fun board, a positive board. Now so many people can't wait to say something negative. Sickening.

beerbus wrote:

tphuang wrote:

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

I originally posted these Q2 results for a few reasons:

1. A year ago, industry analysts were ringing their hands over the fact that UA, I believe, was discussing 4% YOY increase in ASM's. Their stock took a dump, and so did the rest of the airline industry. So to read that DL had a 6% YOY increase in ASM's was pretty interesting to me. and worth discussing. Where are those nay-sayers now?

2. Yesterday, DL announced revised Q2 2019 earnings guidance suggesting an expected 15-16 Pre-Tax Margin, up from their earlier 14% projection. This too was interesting, as it represents a graphic illustration of DL's brand strategy revenue growth, coupled with some additional revenue reaped from the MAX grounding.

3. I have been involved with the industry for 40 years- and I have NEVER seen a network carrier with a 90%+ system load factor in any month. This is amazing to me. For DL to be running this well with loads this high takes a great deal of precision planning that many Anet posters do not appreciate. And as another Poster stated- it's causing some Spill. That has to have some of the revenue planners eyes bulging.......

Lastly, here is a link to 2018 Q2 Margins from Anet a year ago.

https://www.airliners.net/forum/viewtopic.php?t=1399977

Delta was #2 a year ago. And IMHO, I have not seen many 16% operating margins from a network carrier in Q2 in my 40 years in the industry. I therefore thought that was impressive.

Cheers!

That margin from that charge was including special items. NK typically does really well, but with special items in Q2 of last year, it had a worse number than most other airlines. If you look at the last 2 quarters, both WN and NK do better than DL. That's not to say DL has not been successful, but most US airlines are doing well due to the strong economy.

And DL's pre-tax margins went up from a year ago, but that should be expected with lower gas prices and general higher domestic fares this quarter. Let's see where all the margins look like. I would imagine WN would fall a little bit due to MAX shutdown, but I would expect most airlines to improve over last year due to the lower fuel prices.

BroadwayLimited wrote:

Scarebus34 wrote:

Another PR fluff piece

People on this board can be so negative. It really is sad.

If you don't like a particular airline, for whatever reason, no need to bash it. Just go fly somebody else. You have plenty of choices.

This used to be a fun board, a positive board. Now so many people can't wait to say something negative. Sickening.

Unfortunately, this site is in sync with social media as a whole. People can vent their anger, hate or disagreement in an anonymous forum. I suspect it will only get worse.

Still, impressive for Delta. They are my go-to airline pretty much exclusively nowadays.

I don't know. I can tell you that the numbers seem realistic. For our company, DL is pretty much the exclusive carrier, not because it is mandated, but because everyone here has good experience with DL and there is no point in looking elsewhere. It has been like this for years now, but especially true in the last 3 years. I personally fly DL or a SkyTeam partner exclusively. I would not even consider other airlines, regardless of costs. SkyMiles never expiring are a huge bonus for my family who don't fly as often, free check-in bags with the DL AMEX, upgrades to First Class and many other perks are also second to none. Finally, DL seems to bend over backwards to get you accommodated should a mishap occur. I have yet to have a bad experience with them in 10 years of exclusive flying with DL.

So, for what it's worth, DL is a great airline in my opinion and I think this really shows in their #'s as well.

SteelChair wrote:

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

Considering DL didn't raise the top end of their margin guidance, we have to conclude that yes, the 2Q performance was largely expected.

beerbus wrote:

1. A year ago, industry analysts were ringing their hands over the fact that UA, I believe, was discussing 4% YOY increase in ASM's. Their stock took a dump, and so did the rest of the airline industry. So to read that DL had a 6% YOY increase in ASM's was pretty interesting to me. and worth discussing. Where are those nay-sayers now?

2. Yesterday, DL announced revised Q2 2019 earnings guidance suggesting an expected 15-16 Pre-Tax Margin, up from their earlier 14% projection. This too was interesting, as it represents a graphic illustration of DL's brand strategy revenue growth, coupled with some additional revenue reaped from the MAX grounding.

3. I have been involved with the industry for 40 years- and I have NEVER seen a network carrier with a 90%+ system load factor in any month. This is amazing to me. For DL to be running this well with loads this high takes a great deal of precision planning that many Anet posters do not appreciate. And as another Poster stated- it's causing some Spill. That has to have some of the revenue planners eyes bulging.......

1) I think you mean DL had a 4% jump in ASMs. 6% was RPMs. The analysts were very wrong when they tanked stocks.

2) In the 1Q results, DL forecast a 14-16% margin for 2Q. So DL has moved up the bottom number, but not the top. Clearly they now expect to end up in the top half of the previous guidance. This number is high, but DL has beaten this in the past (2016 comes to mind). Still, it speaks to the improving economy and the DL's position of having significant pricing power due to less competition.

3) It is rare. I feel like I've seen it before, but it's not a common sight. It does take good planning, yes, but it's much much easier to control load factors when you have to deal less with competition and can match supply with demand.

tphuang wrote:

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

tphuang wrote:

NK typically does really well, but with special items in Q2 of last year, it had a worse number than most other airlines. If you look at the last 2 quarters, both WN and NK do better than DL. That's not to say DL has not been successful, but most US airlines are doing well due to the strong economy.

Oh please, a much larger, full-service, global carrier like DL shouldn't be expected to churn out the domestic margins that the likes of WN, AS, and the ULCCs do. The legacies are DL's peers, and they outperform those peers significantly and consistently. It's impressive. End of story.

Thank you DL for releasing these monthly statistics. Sine the first of the year WN elected to not release monthly stats so no way to compare June with other carriers

beerbus wrote:

3. I have been involved with the industry for 40 years- and I have NEVER seen a network carrier with a 90%+ system load factor in any month. This is amazing to me. For DL to be running this well with loads this high takes a great deal of precision planning that many Anet posters do not appreciate. And as another Poster stated- it's causing some Spill.

DL last year had very high VDB passenger counts (and admirably low IDB). Let's look at the DOT numbers in a few months. I expect VDB goes very, very high. If that's how they chose to make money, fine.

winginit wrote:

Oh please, a much larger, full-service, global carrier like DL shouldn't be expected to churn out the domestic margins that the likes of WN, AS, and the ULCCs do. The legacies are DL's peers, and they outperform those peers significantly and consistently. It's impressive. End of story.

If we use that reasoning, we shouldn't expect UA to garner the same margins as DL.

n471wn wrote:

Thank you DL for releasing these monthly statistics. Sine the first of the year WN elected to not release monthly stats so no way to compare June with other carriers

UA stopped releasing them at the same time. Was there a legal requirement that ended or something? I miss the reports.

With Delta up-gauging to larger planes domestically (going all-in on the A321/A21N and B739 as replacements for older MD80/90 planes, as well as up-gauging busier RJ routes to the BCS1, I'm surprised that DL increased its load factors to this much, especially with its biggest operations at ATL with a fortress hub and in NYC with about 500 daily flights.

The major issue could be: what happens in the event of a downturn, with DL focused so much on new jets in the 175-200 seat class and 100-125 seat class? That fleet in the 150-seat class isn't getting any younger, and even though (except for the four ex-GOL B738s) the planes in that class are all owned, the oldest A320s are almost 30, the oldest B738s are 21, and the oldest MD-80s are past 30.

I know this is concentrating on the domestic fleet, but there is also the issue of an adequate replacement in the 225-seat class (referring to the oldest B763s, many of which are over 100,000 hours with some approaching 130,000 hours with an LOV of 150,000 hours). I would be surprised if DL wanted to do a heavy check on 30-year old planes. This is where not canceling the B788 order could come back to haunt Delta (even in 2-4-2, those would have basically complemented the A332 fleet at 234 seats).

aemoreira1981 wrote:

With Delta up-gauging to larger planes domestically (going all-in on the A321/A21N and B739 as replacements for older MD80/90 planes, as well as up-gauging busier RJ routes to the BCS1, I'm surprised that DL increased its load factors to this much, especially with its biggest operations at ATL with a fortress hub and in NYC with about 500 daily flights.

The major issue could be: what happens in the event of a downturn, with DL focused so much on new jets in the 175-200 seat class and 100-125 seat class? That fleet in the 150-seat class isn't getting any younger, and even though (except for the four ex-GOL B738s) the planes in that class are all owned, the oldest A320s are almost 30, the oldest B738s are 21, and the oldest MD-80s are past 30.

I know this is concentrating on the domestic fleet, but there is also the issue of an adequate replacement in the 225-seat class (referring to the oldest B763s, many of which are over 100,000 hours with some approaching 130,000 hours with an LOV of 150,000 hours). I would be surprised if DL wanted to do a heavy check on 30-year old planes. This is where not canceling the B788 order could come back to haunt Delta (even in 2-4-2, those would have basically complemented the A332 fleet at 234 seats).

Deliveries peak this year at about 80-85. Next year I think only 67 are scheduled. For a fleet of almost 900, 67 is barely replacement.....almost no growth programmed in and no significant reduction in fleet age. The fleet plan appears quite conservative to me.. .perhaps too conservative given the economic results.

I have long believed, mho, that the A220-500 will be the 149 seat replacment aircraft. I expect it to be announced within 18 months. Having waited 35 years to "get" Delta (I don't count 9 A310s), Airbus will build it if Delta wants it. I see Delta throwing Boeig a bone with 30-40 787-10 orders.

MSPNWA wrote:

1) I think you mean DL had a 4% jump in ASMs. 6% was RPMs. The analysts were very wrong when they tanked stocks.

2) In the 1Q results, DL forecast a 14-16% margin for 2Q. So DL has moved up the bottom number, but not the top. Clearly they now expect to end up in the top half of the previous guidance. This number is high, but DL has beaten this in the past (2016 comes to mind). Still, it speaks to the improving economy and the DL's position of having significant pricing power and reduced competition .

1. You are correct, 4.4% in ASM. My typo.

2. If all USA network carriers are experiencing the results of a strong economy, and reduced competion- how do you explain DL's consistent approx 25% higher net profit than its peers?

I am not trashing AA or UA, but an acknowledgment of DL's marketing strategy and strong operational metrics should also be considered as part of these results.

tphuang wrote:

SteelChair wrote:

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

You seem focused on one metric, margins.

I am saying no airline in history has ever produced these kinds of passenger volume, these kinds of load factors, these kinds of completion factors, and these kinds of profits. Ever. And theyre doing it with the oldest fleet among the majors. And they still beat UAL and AA on customer scores and on time numbers.

SteelChair wrote:

tphuang wrote:

SteelChair wrote:

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

You seem focused on one metric, margins.

I am saying no airline in history has ever produced these kinds of passenger volume, these kinds of load factors, these kinds of completion factors, and these kinds of profits. Ever. And theyre doing it with the oldest fleet among the majors. And they still beat UAL and AA on customer scores and on time numbers.

margins is generally the best metric on how well an airline is doing. The only 2 airlines comparable to them domestically are UA and AA due to all the major mergers. They got the world's most profitable hub in ATL. And AA is run by Doug Parker. Are they a well run airline? Definitely. But there are also a lot of other well run airlines in America. They just don't happen to have ATL or be as large in size.

SteelChair wrote:

tphuang wrote:

SteelChair wrote:

For those poo-pooong these results, "they were expected....," etc.

Was 90.4% expected? 2 points better than last June? The low fuel prices are like adding a supercharger to an already humming engine. They don't cancel flights and they fill up the ones they schedule with higher revenue customers than other airlines. With the oldest fleet among large carriers. The total (operational amd financial) results that Delta is delivering now are perhaps the most impressive in the history of commercial aviation.

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

You seem focused on one metric, margins.

I am saying no airline in history has ever produced these kinds of passenger volume, these kinds of load factors, these kinds of completion factors, and these kinds of profits. Ever. And theyre doing it with the oldest fleet among the majors. And they still beat UAL and AA on customer scores and on time numbers.

"Oldest fleet" is a red herring - we all know that has nothing to do with the actual comfort and on board product. Oldest fleet, sure, but DL continues to invest in PTVs, for example. Old airplanes look awfully new and fancy when they're decked out. A DL 757 looks far more luxurious than an LCC A321neo, for example.

beerbus wrote:

2. If all USA network carriers are experiencing the results of a strong economy, and reduced competion- how do you explain DL's consistent approx 25% higher net profit than its peers?

I am not trashing AA or UA, but an acknowledgment of DL's marketing strategy and strong operational metrics should also be considered as part of these results.

Not all carriers are enjoying having significant pricing power (speaking about UA, WN, AS, and B6 specifically). DL can garner high margins by having the vast majority of their traffic through medium to high-traffic, fortress hubs. This offers the combination of significant pricing power and supply control on the revenue side, and it allows for economies of scale advantages on the cost side. Hey, more power to them for being in this position, but we should be honest on the biggest reason DL has high margins. It's not because people are voluntarily paying more. It sounds good, but it's the not the biggest reason (if it's one at all).

beerbus wrote:

2. If all USA network carriers are experiencing the results of a strong economy, and reduced competion- how do you explain DL's consistent approx 25% higher net profit than its peers?

I am not trashing AA or UA, but an acknowledgment of DL's marketing strategy and strong operational metrics should also be considered as part of these results.

DL generates higher margins because it faces little direct competition at DTW, MSP & SLC, and minimal completion at ATL. Do not fool yourself - this is where the profit is generated. It’s why the economics of 100-seat mainline aircraft work for DL and not AA or UA. (Because AA and UA operate in a much more competitive environment, whereas DL limits capacity at its trunk hubs to maximize margins).

Detroit and Minneapolis may not be as sexy as Chicago, but when you control the market — vs. the three way completion at Chicago between UA, AA and WN — and ultimately carry a similar number of local passengers at much high prices....

It’s not rocket science.

winginit wrote:

tphuang wrote:

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

tphuang wrote:

NK typically does really well, but with special items in Q2 of last year, it had a worse number than most other airlines. If you look at the last 2 quarters, both WN and NK do better than DL. That's not to say DL has not been successful, but most US airlines are doing well due to the strong economy.

Oh please, a much larger, full-service, global carrier like DL shouldn't be expected to churn out the domestic margins that the likes of WN, AS, and the ULCCs do. The legacies are DL's peers, and they outperform those peers significantly and consistently. It's impressive. End of story.

People also forget that Delta pays out employee profit-sharing PRE-TAX. So its Net Margins are impacted by the fact that it is giving billions to its employees year in and year out.

IIRC, Delta didn't generate those revenue premiums vis a vis the competition 10-15 years ago. In fact, Delta didnt even generate 100% of the revenue that UAL and AA got for the same city pairs. ATL was still there. Why is the "fortress hub" able to generate a revenue premium now when it couldn't then?

SteelChair wrote:

IIRC, Delta didn't generate those revenue premiums vis a vis the competition 10-15 years ago. In fact, Delta didnt even generate 100% of the revenue that UAL and AA got for the same city pairs. ATL was still there. Why is the "fortress hub" able to generate a revenue premium now when it couldn't then?

Delta got two new fortress hubs from it's merger with northwest. Since it merged earlier, it completed merger earliers too. Now it's In a much better shape than aa and ua. Aa is still dealing with messiness from it's merger and the leadership of Doug Parker. Ua is finally reaping benefits and doing better under leadership of Kirby.

DL runs a tight ship (I still see them for what they are) but they do a great job as a business. There is no doubt that MAX planes being grounded has helped push people to them. That is a lot of daily availability gone!..and those who say it has no bearing, well its a.net.

Delta has demonstrated that many customers are willing to pay a little bit more to fly them because of service, amenities, and reliability. No small feat in this industry.

I believe profit sharing is currently trending at about 20% above last years level. If this keeps up it going to be one heck of a Valentine's Day next February!

tphuang wrote:

SteelChair wrote:

IIRC, Delta didn't generate those revenue premiums vis a vis the competition 10-15 years ago. In fact, Delta didnt even generate 100% of the revenue that UAL and AA got for the same city pairs. ATL was still there. Why is the "fortress hub" able to generate a revenue premium now when it couldn't then?

Delta got two new fortress hubs from it's merger with northwest. Since it merged earlier, it completed merger earliers too. Now it's In a much better shape than aa and ua. Aa is still dealing with messiness from it's merger and the leadership of Doug Parker. Ua is finally reaping benefits and doing better under leadership of Kirby.

I don't think DTW and MSP were generating revenue premiums 10-15 years ago for NWA and then Delta either. The core question remains, why is Delta now abe to generate that revenue premium?

LAXLHR wrote:

DL runs a tight ship (I still see them for what they are) but they do a great job as a business. There is no doubt that MAX planes being grounded has helped push people to them. That is a lot of daily availability gone!..and those who say it has no bearing, well its a.net.

Please let the forum know "what they are."

jetlanta wrote:

People also forget that Delta pays out employee profit-sharing PRE-TAX. So its Net Margins are impacted by the fact that it is giving billions to its employees year in and year out.

That is part of the overall compensation to employees, so DL isn't at a reporting disadvantage for it.

SteelChair wrote:

IIRC, Delta didn't generate those revenue premiums vis a vis the competition 10-15 years ago. In fact, Delta didnt even generate 100% of the revenue that UAL and AA got for the same city pairs. ATL was still there. Why is the "fortress hub" able to generate a revenue premium now when it couldn't then?

10-15 years ago at ATL, DL was a higher-cost airline facing hard pressure from an entrenched LCC hub. Both of those conditions don't exist today (and of course it's added two more fortresses). Connecting flows also don't have NW, US, and CO adding competition anymore. ATL is much more lucrative that was back then.

By and large DL still doesn't generate a revenue advantage over UA and AA when apples to apples data gets posted here.

MSPNWA wrote:

jetlanta wrote:

People also forget that Delta pays out employee profit-sharing PRE-TAX. So its Net Margins are impacted by the fact that it is giving billions to its employees year in and year out.

That is part of the overall compensation to employees, so DL isn't at a reporting disadvantage for it.

SteelChair wrote:

IIRC, Delta didn't generate those revenue premiums vis a vis the competition 10-15 years ago. In fact, Delta didnt even generate 100% of the revenue that UAL and AA got for the same city pairs. ATL was still there. Why is the "fortress hub" able to generate a revenue premium now when it couldn't then?

10-15 years ago at ATL, DL was a higher-cost airline facing hard pressure from an entrenched LCC hub. Both of those conditions don't exist today (and of course it's added two more fortresses). Connecting flows also don't have NW, US, and CO adding competition anymore. ATL is much more lucrative that was back then.

By and large DL still doesn't generate a revenue advantage over UA and AA when apples to apples data gets posted here.

Well thats certainly an interesting viewpoint. On the data that Delta submits to the SEC claiming a revenue advantage.....well, they're lying. Because the folks on a.net have better data!

SteelChair wrote:

Well thats certainly an interesting viewpoint. On the data that Delta submits to the SEC claiming a revenue advantage.....well, they're lying. Because the folks on a.net have better data!

Then we're not talking the same data. I'm talking head-to-head route data where this supposed product-driven revenue advantage never materializes.

You asked about why DL now has an aggregate revenue edge over those two. You've been told why. DL's network faces less competition, and its customers are forced to pay more to fly. Doesn't sound so glamorous now, does it. It isn't a fancy business model, but it makes money.

As someone who has non-rev benefits on Delta, this is just awful news because it devalues one of the benefits of working for an airline. Completely full flights = no chance in hell of getting a seat in any cabin.

jetlanta wrote:

winginit wrote:

tphuang wrote:

We will see when all the Q2 results come out, but DL is typically not in the top 3 domestically when it comes to margins. They do the best amongst legacies, but normally worse than WN. WN will probably do worse this time around due to MAX issues. But calling it most impressive seems to completely overlook the actual margins.

tphuang wrote:

NK typically does really well, but with special items in Q2 of last year, it had a worse number than most other airlines. If you look at the last 2 quarters, both WN and NK do better than DL. That's not to say DL has not been successful, but most US airlines are doing well due to the strong economy.

Oh please, a much larger, full-service, global carrier like DL shouldn't be expected to churn out the domestic margins that the likes of WN, AS, and the ULCCs do. The legacies are DL's peers, and they outperform those peers significantly and consistently. It's impressive. End of story.

People also forget that Delta pays out employee profit-sharing PRE-TAX. So its Net Margins are impacted by the fact that it is giving billions to its employees year in and year out.

You know as well as anybody that DL pays out more in profit sharing than it’d really like to, with the lion’s share a negotiated benefit benefit by ghost of the DALPA. In other words, a line item expense. Let’s not pretend that DL’s margins are impacted by some charitable event.