Interesting tidbits from Delta Investor Day presentation
Jun 27, 23, 8:10 am
#1
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Interesting tidbits from Delta Investor Day presentation
https://s2.q4cdn.com/181345880/files...vF-6-26-23.pdf
- Increased earnings guidance (not surprising given these high prices)
- They are signing up to 1 million new Skymiles members a month
- They are talking about upgauging the "coastal hubs" (NYC/BOS/LAX/SEA) in order to improve profitability
- Cobrand credit card accounts are up 25% since 2019; spending up 60%
- Looks like there are 7.5 million cobranded cardholders
- They mention "premium" cobrand card strength a lot (I've said many times SkyClub crowding is not just due to Amex Platinum, it's also Delta Reserve growth)
- On-time arrivals are below 2019
Jun 27, 23, 8:18 am
#2
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Slides 10 and 15 address why Delta can charge a premium vs other airlines. Slide 10 shows that current capacity is 103% of what it was in 2017, when it was projected to be 120%. This (forced?) discipline is why seat prices are so high. Slide 15 is titled "Delta's brand transcends the industry" and points out that DL is the #5 US eCommerce retailer and #12 on the Fortune Most Admired Companies list.
Jun 27, 23, 8:20 am
#3
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Another one - "personal travel" from corporate travelers is up 50% versus 2019. I think this explains a lot in terms of the airline industry - business travel is down, but many business travelers are still flying, they are just doing more personal travel. That, combined with more leisure travel, has really changed the traveler profile
Jun 27, 23, 9:02 am
#4
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From CNBC, if there was any doubt FCM is working:
"The airline has repeatedly touted customers’ willingness to buy up to more expensive seats, from those with extra legroom to first class. Premium revenue will come in at about $19 billion this year, a 35% share of total revenue, up from a 24% share in 2014."
https://www.cnbc.com/2023/06/27/delt...estor-day.html
35% of total revenue is coming from premium passengers.
DL also touted its "lucrative" relationship with AMEX, which will generate $6.5 Billion (estimate) this year.
"The airline has repeatedly touted customers’ willingness to buy up to more expensive seats, from those with extra legroom to first class. Premium revenue will come in at about $19 billion this year, a 35% share of total revenue, up from a 24% share in 2014."
https://www.cnbc.com/2023/06/27/delt...estor-day.html
35% of total revenue is coming from premium passengers.
DL also touted its "lucrative" relationship with AMEX, which will generate $6.5 Billion (estimate) this year.
Jun 27, 23, 9:10 am
#5
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Thanks for sharing, all very interesting.
I'm curious to see what this means in practice. Less CR9s at LGA? 319s becoming 320s?
https://s2.q4cdn.com/181345880/files...vF-6-26-23.pdf
- They are talking about upgauging the "coastal hubs" (NYC/BOS/LAX/SEA) in order to improve profitability
Jun 27, 23, 10:54 am
#6
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So when do we as taxpayers get paid back for the govt investment into the airlines during Covid, because they were doing so 'horribly' and about to close up shop?
Jun 27, 23, 11:16 am
#7
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At SEA, they have been shifting a lot of routes that were E175 routes to A220's. Most of the year it does not impact frequency, but during lower demand seasons they cut 1x frequency/day.
Jun 27, 23, 11:38 am
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Jun 27, 23, 12:33 pm
#10
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I am definitely one of the "Premium" cobrand card holders this year. Got my Reserve Delta card in January.
Last edited by Dracarys; Jun 27, 23 at 12:33 pm Reason: punctuation
Jun 27, 23, 12:34 pm
#11
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In the case of LGA, despite the rebound, there are still several poor performing CR9 routes that I think will probably need to get cut first.
What I mean by that is if say route LGA-XXX is performing really well and justifies 70 more seats (and which today is operated by N daily CR9s), rather than swap out a CR9 for a 319, DL will just add another CR9 and bump up the daily frequencies on LGA-XXX to N+1 daily. The added CR9 frequency will come at the expense of a slot squat route.
We saw that in the most recent schedule change where LGA-GRR/MSN/OMA all gained some more CR9s at the expense of slot squats. But again, more of that is likely needed before I think well see more mainline LGA service.
The exceptions to that are LGA-Florida, LGA-ATL/DTW/MSP, and LGA-ORD/DFW/IAH/DEN. But again, I believe pretty much any other higher performing LGA route will just see more CR9 frequencies until all the low performance LGA slot squat routes have been purged.
Jun 27, 23, 1:07 pm
#14
Join Date: Oct 2009
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LGA-BGM/ORH/IAD/DAY/ROA all come to mind. Basically poor performing routes that would otherwise have been cut, except that DL needs to fly X frequencies from LGA to maintain slots. Apologies if any of those had been/will be dropped already.
