Delta Air Lines 2014-05-16

Delta Air Lines
ANALYSIS for NYSE : DAL MAY 16, 2014

$
$32.4 B MKT CAP
Trefis Estimate
$
37.55
$31.7 B MKT CAP
Market Price
See the Full Analysis for Delta Air Lines on Trefis
CORPORATE SNAPSHOT
Delta Air Lines is one of the largest passenger airlines in the world operating
an extensive domestic and international network which spans the Americas,
Europe, Asia-Pacific, Africa, the Middle East, the Caribbean and Australia.
Delta and its subsidiary operate over 4,000 flights every day. The carrier is
headquartered in Atlanta.
Delta's route network is centered around the hub system it operates at
airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis,
Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt
LakeCity and Tokyo-Narita. Each of these hub operations includes flights
that gather and distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to other hubs.
Delta's network is supported by a fleet of aircraft that is varied in termsof
size and capabilities, giving it the flexibility to meet corporate demands for
travel.
It also has alliances with other domestic and foreign airlines to aid its
network. These alliances include code sharing, reciprocal frequent flier
program benefits, joint promotions and common use of airport gates among
others. Delta is also a part of SkyTeam which is one of the three major global
airline alliances.
VALUATION HIGHLIGHTS
Delta US constitutes 36% of the Trefis price estimate for Delta Air
Lines's stock.
1.
Cargo and Other Businesses constitute 31% of the Trefis price estimate
for Delta Air Lines's stock.
2.
Delta International constitutes 19% of the Trefis price estimate for Delta
Air Lines's stock.
3.
DELTA US
5 Delta's US Passenger Yield
6 Delta's US Market Share
7 Available Seat Miles in US
8
Delta's Average US Occupancy Rate
9
Fuel Expense % Revenue for Delta's US
flights
CARGO AND OTHER
BUSI NESSES
11
Extra Baggage, Ticketing Changes and
Other Ancillary Revenue
12 Delta's Freight & Mail Revenue
13
Cargo and Other Businesses EBITDA
Margin
DELTA I NTERNATI ONAL
15
Delta's International Passenger
Yield
16 Delta's International Market Share
18
Available Seat Miles in International
Markets
20
Delta's International Average
Occupancy Rate
21
Fuel Expenses % Revenues for Delta's
International Flights
REGI ONAL CARRI ERS
22 Delta's Regional Passenger Yield
23 Delta's Regional Carriers ASM
24
Delta's Average Regional Occupancy
Rate
25
Fuel Expense % Revenues for Regional
Carrier Flights
APPENDI CES
29
Summary P&L for Delta Air
Lines
30 Detailed Delta US P&L
31
Detailed Cargo and Other Businesses
P&L
32 Detailed Delta International P&L
33 Detailed Regional Carriers P&L
See the Interactive Valuation Breakdown on Trefis
Our share price estimate and the overall company value is derived by
summing-up the values of individual divisions/businesses in a sum-of-the-
parts analysis. The value of each division is calculated using a discounted cash
flow (DCF) methodology.
We forecast fundamental drivers like pricing, market share, and profit
margins for different businesses in estimating the divisions value within the
DCF framework. The analysis below primarily focuses on those important
forecasts that drive our share price and value estimate.
Our complete analysis, including sources of historical data, underlying
equations and additional discussion are available on www.trefis.com.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Delta Air Lines value that present opportunities for
upside or downside to the current Trefis price estimate.
Delta - US
Fuel Expense % Revenue for Delta's US flights:We expect fuel
expenses to make up for 32.7% of revenues for Delta's US flights by the
end of the Trefis forecast period. If however the fuel costs as a
percentage of passenger revenues decline to 31% by the end of the Trefis
forecast period driven by sustained weakness in the global economy then
there could be a potential upside of approximately 10% to the current
Trefis price estimate for Delta Air Lines's stock.
US Passenger Yield: Deltas US Passenger Yield increased from $0.119 in

2009 to $0.164 in 2013. We expect this metric to rise further driven by
higher jet fuel prices to $0.192 by the end of the Trefis forecast period. If
however, due to stiff competition Delta is unable to pass on higher jet
fuel prices to customers through passenger fare hikes such that its US
passenger yield rises to only $0.182 by the end of Trefis forecast period,
then there could be a potential downside of around 5% to Trefis price
estimate for Delta Air Lines's stock.
SOURCES OF VALUE
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ANALYSIS for DELTA AIR LINES

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Extensive service network
Delta has one of the largest service networks among other US airlines. A
large service network enables the carrier to attract corporate travelers to its
loyalty program which supports higher yields as many corporate travelers opt
for first class travel.
International equity investments
Delta has made equity investments in Virgin Australia, Virgin Atlantic,
Aeromexico and GOL. These investments increase the carrier's presence in
important international air travel markets, thus boosting its passenger traffic
and revenues.
KEY TRENDS
Oil prices significantly impact Delta's bottom line
Fuel expenses constitute the single largest cost head for airlines including
Delta. This makes airlines highly vulnerable to hikes in crude oil prices. For
Delta, fuel costs constitute around 35% of its total operating expenses. To
reduce its vulnerability to fuel price volatility, Delta engages in hedging fuel
prices through fuel swaps, collar and call options.
Demand for flights related to global economic growth
The demand for flights is highly correlated to the global economic growth.
Thus, a decline in economic growth or a recession reduces the demand for
flights which impacts passenger traffic for airlines. Currently, the slowdown
in Europe due to the Euro crisis is impacting the demand for flights from the
region.
Focus on ancillary revenues
Many airlines including Delta are figuring out ways to grow their top lines
through ancillary heads such as, baggage fees, access to on board
WiFi/food/drinks etc.. Accordingly, airlines are investing to enhance their
product offerings that include in-flight WiFi and other entertainment
options, improved lounge facilities and extra legroom seats.
According to a recent Amadeus/IdeaWorks study, North American
airlines collectively produce one of the largest stream of ancillary revenues
compared to other regions. A majority of the increase is attributable to
stronger merchandising efforts by the carriers as well as addition of more la
carte services for sale.
Airline consolidations and joint ventures
The US airline industry has seen many mergers and acquisitions in the last
decade including the four big combinations of US Airways and America
West, Delta and Northwest, United and Continental, and Southwest and
AirTran.
A more consolidated industry has worked to lower competition
particularly through capacity rationalization that follows a merger. Reduced
competition in turn has allowed airlines to raise airfares more freely allowing
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them to grow profits. Going forward, slow overall capacity addition will allow
airlines to continue to maintain their load factors (percentage of seats
occupied in a flight) and profits.
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Delta US

The Delta US division constitutes 35.7% of our $38.17 price estimate for this stock, based on our sum of the parts analysis.
The most important drivers for the Delta US business are:
Delta's US Passenger Yield
Delta's US Market Share
Available Seat Miles in US
Delta's Average US Occupancy Rate
Fuel Expense % Revenue for Delta's US flights

DELTA'S US PASSENGER YIELD

Delta's US Passenger Yield refersto the average revenue received by the carrier per mile per revenue paying passenger in
the US.
Revenue paying passengers refer to passengers who contribute to the revenue. Certain categories of passengers
including children who do not occupy seats, crew members and passengers traveling under some promotion, do not
contribute to revenues of the carrier.

Delta's US Passenger Yield improved steadily from $0.119 in 2009 to $0.164 in 2013 on higher passenger fares supported by
a stable demand environment.
Going forward we anticipate Delta's US Passenger Yield to continue to rise due to increases in passengers fares driven
by higher fuel costs.

Forecast Rationale
Supporting:
INCREASING CRUDE OIL PRICES Crude oil (Brent) prices increased from around $50-$70 per barrel in 2009 to $100-
$120 per barrel in 2012. Further, jet fuel costs constitute around 30% of the total costs of an airline. As a result, Delta
Delta's US Passenger Yield ($)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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0. 025
0. 050
0. 075
0. 100
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increased its passenger fares to cope with rising oil prices. This drove growth in its passenger yields. Further rise in oil
prices driven by rising worldwide demand for oil will contribute to higher passenger air fares and yields.
STABLE DEMAND ENVIRONMENT Growth in passenger yields has also been supported by a stable demand
environment which has allowed carriers to raise their fares. The stable demand for flights in the U.S. is highly
correlated with a steadily growing U.S. economy. Continued growth of the U.S. economy and thereby demand for
flights will allow carriers to raise fares and thus improve their passenger yields.
IMPROVING BUSINESS CONFIDENCE Business travel demand is generally positively correlated to business confidence.
Changes in business confidence can act as an early indication of changes in premium travel, giving a signal
sometimes up to 6 months in advance. This is expected to improve the ability of airlines to benefit from the premium
segment fare-hikes going forward.

Mitigating:
COMPETITIVE PRESSURE Competition in the U.S. airline industry is intense. This reduces the ability of carriers to
increase their fares unilaterally which in turn impacts growth in their passenger yields. The ability of full service
carriers like Delta to raise their air fares is further limited by severe price competition from low-cost carriers such as
Southwest.
Sources for historical data and explanations can be found on the Trefis.com website (link)

DELTA'S US MARKET SHARE

This refers to Delta's share of the total Available Seat Miles in the US.
Available Seat Miles is a measure of flying capacity and is computed as total seats on-board times the distance flown.

Delta's US market share was around 16% in 2009 and 2010. But it declined to 15.8% in 2011 and 15.7% in 2012 as the carrier
adopted a conservative capacity stance in an attempt to raise its load factor (percentage of seats occupied in a flight) and
profitability. However, market share recovered to 15.8% in 2013 as Delta raised its flying capacity in the year.
Delta's US Market Share (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0. 0
2. 5
5. 0
7. 5
10. 0
12. 5
15. 0
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Going forward, we anticipate Delta's market share to rise marginally over the Trefis forecast period driven by its
moderate increases in flying capacity.

Forecast Rationale
Supporting:
INCREASES IN FLYING CAPACITY Over the past few years, Delta favored higher occupancy rates over additional
capacity in an attempt to improve its profitability. Though this helped the carrier improve its profits but this
negatively impacted its market share of the total flying capacity of the domestic U.S. aviation market. However, from
the third quarter of 2013 the carrier began to raise its flying capacity after its occupancy rates rose steadily during 2011
and 2012. This growth oriented capacity stance will grow Delta's market share over the coming years.
RISING CORPORATE TRAVEL WILL BOOST DELTA'S MARKET SHARE Delta focuses on corporate travelers who in
general prefer carriers such as Delta and United that have larger networks. Higher business activity driven by a
steadily growing U.S. economy will increase overall demand from corporate travelers. Higher demand for flights from
this segment will support growth in Delta's domestic flying capacity and market share.

Mitigating:
COMPETITION FROM LOW COST AIRLINES Delta faces immense price competition from low-cost carriers,
particularly Southwest on several domestic U.S. routes. Large number of passengers opt for lower fares that such
carriers offer. This impacts the ability of Delta to unilaterally raise its flying capacity.

AVAILABLE SEAT MILES IN US

Available seat miles (ASM) is a measure of an airlines' passenger carrying capacity. It is equal to the number of seats
available on-board multiplied by the number of miles flown.
Available Seat Miles in USrepresents the number of available seat miles for domestic travel within the United
States.
Available Seat Miles in US (Bil)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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200
300
400
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800
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Available Seat Miles in the US increased steadily from 667 billion miles in 2009 to 693 billion miles in 2013, on an overall
increase in the number of flights in the domestic U.S. market.
Going forward we anticipate Available Seat Miles in the U.S. to continue to rise driven by increasing demand for
flights.

Forecast Rationale
Supporting:
CAPACITY GROWTH SUPPORTED BY STABLE DEMAND ENVIRONMENT Demand for business travel along with leisure
travel has been strong recently. This has allowed several US carriers to increase their capacity, driving growth in
ASMs. In addition, demand for flights is highly correlated with economic growth and the US economy has continued
to post moderate growth. This will help carriers to continue to raise their capacity.
AGGRESSIVE CAPACITY EXPANSION BY LOW-COST AND SMALLER CARRIERS Aggressive capacity expansion by low-cost
carriers like JetBlue and Southwest and other relatively smaller carriers like Alaska Air Group in an attempt to raise
their market shares is driving growth in the industry's domestic flying capacity. We anticipate this growth oriented
stance of these carriers to hold for the foreseeable future which will continue to drive growth in the industry's flying
capacity.

Mitigating:
INCREASING TICKET PRICES The price of jet fuel has risen significantly over the past few years. This has forced
carriers to raise their air fares as jet fuel costs constitute nearly a third of their total costs. Higher fares will cut in to
demand for flights, thus adversely impacting the ability of carriers to raise flying capacity.
CONSERVATIVE CAPACITY STANCE OF LARGER CARRIERS Many larger carriers like United, Delta and American
Airlines lowered their flying capacities in the recent past in an attempt to raise their load factors (percentage of seat
occupied in a flight) and profitability. This conservative capacity stance of these carriers is expected to continue in the
near term which will hinder the overall growth in the industry's flying capacity.

DELTA'S AVERAGE US OCCUPANCY RATE

Occupancy rate is defined as the percentage of seats occupied by revenue paying passengers in a flight. It is calculated by
dividing passenger traffic (revenues passenger miles) for a carrier by its flying capacity (available seat miles).
Delta's Average US Occupancy Rate is the average occupancy rate of all its flights that provide service on domestic
U.S. routes.
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Delta's Average US Occupancy Rate declined marginally from 84.5% in 2009 to 84.2% in 2010. However, it recovered to
84.5% in 2011. In 2012 it increased sharply to 85.3% as the carrier cut capacity to raise its occupancy rates, but declined
marginally to 84.6% in 2013 as Delta returned to a growth oriented capacity stance.
Going forward we anticipate Delta's Average US Occupancy Rate to increase marginally over the Trefis forecast
period.

Forecast Rationale
Supporting:
STABLE DEMAND ENVIRONMENT The U.S. economy has continued to grow at a moderate rate which has maintained
a stable demand environment for flights. This has contributed to growth in occupancy rates for most carriers
including Delta. Higher demand in the future will promote growth in occupancy rates.
CONSERVATIVE CAPACITY MANAGEMENT Delta has adopted a conservative capacity stance i.e. it is lowering the
number of flights it operates. This has promoted growth in its occupancy rates. Such a stance in the future will
continue to benefit occupancy rates of the carrier.

Mitigating:
COMPETITION FROM LOW COST AIRLINES Delta faces intense price competition from low-cost carriers like
Southwest and JetBlue. A large number of passengers opt of lower fares offered by these carriers. This impacts
occupancy rates of full service carriers including Delta.

FUEL EXPENSE % REVENUE FOR DELTA'S US FLIGHTS

This represents Delta's expenses incurred on fuel as a percentage of the revenues collected from passenger travel in the
US.
Delta's Average US Occupancy Rate (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
25
50
75
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Fuel Expense % Revenue for Delta's US flights increased overall from 35% in 2009 to 38.2% in 2012 driven by a sharp rise
in crude oil prices over this period. These however fell sharply to 33.2% in 2013 due to fall in crude oil prices in the second
quarter of 2013.
Going forward, we expect Delta's US fuel expenses as a percentage of its passenger revenues to decline in the near
term due to rising crude oil production in the US. Thereafter over the remainder of the Trefis forecast period we
anticipate it to rise again gradually.

Forecast Rationale
Supporting:
RAPIDLY RISING CRUDE OIL PRODUCTION IN THE US Driven by increasing adoption of new technologies like fracking
and horizontal drilling, oil production efficiency and well productivity at many oil fields in the US has risen.
According to figures cited by the EIA, crude oil production in the US has risen by around 9% per year over the past
few years. The agency anticipates this strong growth to continue in the coming years. We figure this rapid growth in
oil production will weigh on global oil prices, which will work to lower fuel costs for airlines.
MORE EFFICIENT AIRCRAFT Delta has been working to improve fuel efficiency of its fleet. It installed blended
winglets on its aircraft that reduces fuel burn. In addition, the carrier is in the process of restructuring its domestic
fleet. It is reducing the number of 50-seater regional jets and replacing these with efficient two-class regional jets and
Boeing 737s. This will promote fuel-efficiency and reduce fuel costs for the carrier.
FUEL HEDGING Delta also engages in fuel price hedging through jet fuel swaps, collar and call options. This helps in
saving the carrier from sudden fuel price hikes, and thereby lowers its fuel expenses.

Mitigating:
RISING WORLDWIDE DEMAND FOR OIL The global demand for crude oil is rising driven by increasing energy needs of
emerging economies. On the supply side, production is limited by oil being an exhaustible resource and production
being controlled by a few countries. As a result, prices of oil are rising and will likely continue to rise in future barring
periods when global economic growth declines. As a result, prices of jet fuel will continue to rise.
TENSIONS IN THE MIDDLE EAST As a majority of the world's oil comes from Middle-East, political unrest in the
region like the Arab Spring of 2011 will contribute to higher global prices of crude oil.
Fuel Expense % Revenue for Delta's US flights (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
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In addition, you can see the detailed P&L for the Delta US business in the Appendix (link)

Cargo and Other Businesses

The most important drivers for the Cargo and Other Businesses business are:
Extra Baggage, Ticketing Changes and Other Ancillary Revenue
Delta's Freight & Mail Revenue
Cargo and Other Businesses EBITDA Margin

EXTRA BAGGAGE, TICKETING CHANGES AND OTHER ANCILLARY REVENUE

This refers to Delta's revenues generated from ancillary sources such as extra baggage fees, ticket rescheduling / canceling
charges, preferential seating/aircraft boarding charges and access to premium lounges, and maintenance, repair and
overhaul services.

Extra Baggage, Ticketing Changes and Other Ancillary Revenue jumped from $3.47 billion in 2009 to $3.89 billion in
2013. In an attempt to increase revenues without impacting a steep rise in airfares, Delta imposed overhead charges on
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Revenue (Bil $) 11.9 13.1 14.0 15.2 16.0 16.8 17.6 18.5 19.2 19.8 20.4
Direct Expense (Bil $) 10.3 11.8 12.5 12.8 13.3 13.9 14.6 15.4 16.0 16.5 17.0
Indirect Expense (Bil $) 0.39 0.16 0.54 -2.03 1.38 1.41 1.47 1.57 1.66 1.72 1.74
Adjusted EBITDA (Bil $) 1.55 1.32 1.59 2.41 2.61 2.81 2.95 3.08 3.19 3.26 3.34
Free Cash Flow (Bil $) n/a n/a n/a n/a 1.24 1.40 1.48 1.51 1.53 1.54 1.59
Extra Baggage, Ticketing Changes and Other Ancillary Revenue ($ Bil)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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several services during this period while also expanding the portfolio of ancillary products.
Going forward, we expect Extra Baggage, Ticketing Changes and Other Ancillary Revenue to continue to rise
gradually over the Trefis forecast period.

Forecast Rationale
Supporting:
STRONG MERCHANDISING REVENUES Ancillary sources of revenue such as frequent flyer miles, baggage fees, on-
board sales of food, beverages, wifi, and hotel bookings are rapidly evolving as key elements of U.S. airlines' strategy
for achieving stable and robust top-line growth that can offset the thin margins of their business. Delta is targeting to
grow its merchandising revenues to $1 billion by 2013 through expanded product offerings such as extra leg room seats,
hotel and car rentals and trip insurance.
EXPANDED PORTFOLIO OF ANCILLARY PRODUCTS Delta's 'Economy Comfort' - a premium economy cabin product
which provides extra legroom - is adding to growth in ancillary revenues as passengers opt for these seats especially on
long haul flights. In addition to 'Economy Comfort', Delta is adding more first class seats and in-flight entertainment
to its domestic product; offering flat-bed Business Elite seats on its entire international wide body fleet; adding
personal, in-seat entertainment for both Business Elite and economy class customers on all long-haul international
flights; adding in-flight Wi-Fi service to all domestic two-class aircraft, including regional jets, with a first and
economy class cabin; updating Delta Sky Clubs throughout the system; and building new terminal facilities for
international customers at its two largest global gateways Atlanta and New York-JFK.
MRO AGREEMENT WITH AEROMEXICO In August 2011, Delta entered into a commercial agreement with AeroMexico
where the two airlines expanded maintenance, repair and overhaul (MRO) capacity to create the largest airline MRO
facility in Mexico. This facility is used to offer maintenance and repair services to Aeromexico, Delta and third-party
customers. This will add to growth in Delta's ancillary revenues.

DELTA'S FREIGHT & MAIL REVENUE

This represents Delta's revenue from freight and mail delivery services.
Delta's Freight & Mail Revenue ($ Bil)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0. 00
0. 25
0. 50
0. 75
1. 00
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Delta's Freight & Mail Revenue increased from $788 million in 2009 to $1027 million in 2011. However, it declined to $990
million in 2012 and $937 million in 2013 on lower cargo volumes driven by weakness in global cargo transport markets.
Going forward, we expect Delta's Freight & Mail Revenue to grow in the coming years driven by recovery in the
global cargo markets.

Forecast Rationale
Supporting:
GROWTH IN US INDUSTRIAL PRODUCTION Air cargo traffic and industrial production have a strong correlation.
World industrial production fell 9% in 2009 which produced the worst decline in freight transport in 80 years.
Scotiabanks Global Forecast update estimates US industrial production to grow at 3.6% in 2014. Consequently, we
anticipate this growth in industrial output to boost Delta's cargo revenues.

Mitigating:
WEAK GLOBAL ECONOMY A weak global causes customers to shift from higher priced air freight transport to lower
priced ground and ocean freight transport. Thus weakness in the global economy in the future will impact cargo
revenues of Delta.

CARGO AND OTHER BUSINESSES EBITDA MARGIN

This represents Delta's earnings before interest, taxes, depreciation and amortization from cargo and ancillary heads (like
extra baggage fee and rescheduling charges) expressed as a percentage of its revenues from these heads.

Cargo and Other Businesses EBITDA Margin increased steadily from 42.3% in 2009 to 49.6% in 2012 due to higher
revenues from ancillary heads which do not require a corresponding increase in their supporting costs. However, margins
fell marginally to 49% in 2013.
Cargo and Other Businesses EBITDA Margin (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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We expectCargo and Other Businesses EBITDA Margin marginsto remain at the current level over the remainder
of the Trefis forecast period.

Forecast Rationale
Supporting:
MANY ANCILLARY HEADS HAVE VERY LITTLE DIRECT ASSOCIATED COSTS Many ancillary heads such as extra baggage
fees have little or no extra direct costs associated with them. For example, an increase in extra baggage fee raises
ancillary revenues without increasing the related costs. This supports EBITDA margins.
DOMESTIC FLEET RESTRUCTURING Additionally, Delta's Cargo and Other Businesses EBITDA Margin will also
benefit from its domestic fleet restructuring. Delta is reducing its 50-seat regional jets and older B-757-200 aircraft
with more efficient and customer preferred CRJ-900, B-717-200 and B-737-900ER aircraft. This will lower its
maintenance and operational costs to support the cargo segment's EBITDA margins.
FOCUS ON EMPLOYEE PRODUCTIVITY AND MAINTENANCE REDESIGN Other initiatives around employee productivity,
distribution channel changes and maintenance redesign will further support cargo and other businesses EBITDA
margins. Delta is aiming to improve its employee productivity through the use of technology and improved staffing
models. The carrier is also redesigning its maintenance platforms by improving its processes and resource
management. This will contribute to lowering its costs.

In addition, you can see the detailed P&L for the Cargo and Other Businesses business in the Appendix (link)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Delta's Freight & Mail Revenue (%
of total)
18.9 21.1 20.4 19.4 19.2 19.2 19.2 19.2 19.2 19.2 19.2
Extra Baggage, Ticketing Changes
and Other Ancillary Revenue (% of
total)
81.1 78.9 79.6 80.6 80.8 80.8 80.8 80.8 80.8 80.8 80.8
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Delta International

The most important drivers for the Delta International business are:
Delta's International Passenger Yield
Delta's International Market Share
Available Seat Miles in International Markets
Delta's International Average Occupancy Rate
Fuel Expenses % Revenues for Delta's International Flights

DELTA'S INTERNATIONAL PASSENGER YIELD

Delta's International Passenger Yield refers to the average revenue received by the carrier per mile per revenue paying
passenger on its U.S.-International routes.
Revenue paying passengers refer to passengers who contribute to the revenue. Certain categories of passengers
including children who do not occupy seats, crew members and passengers traveling under some promotion, do not
contribute to revenues of the carrier.

Delta's International Passenger Yield increased steadily from $0.106 in 2009 to $0.143 in 2012 on fare hikes supported by a
stable demand environment. It however fell marginally to $0.141 in 2013.
Going forward we anticipate Delta's International Passenger Yield to continue to rise due to increases in passengers
fares driven by higher fuel costs.

Forecast Rationale
Supporting:
Delta's International Passenger Yield ($)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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environment which has allowed carriers to raise their fares. The growing demand for flights on U.S.-Latin America
and U.S.-Pacific international routes is highly correlated with the fast-growing economies of Latin America and
Asia-Pacific. Continued growth in these economies and thereby demand for flights on these routes will Delta to raise
fares and thus improve its international passenger yields.
INCREASE IN TAX BURDEN The European Union carbon emissions law came into effect on January 1, 2012. Under
the proposed ETS (Emission Trading Scheme) regime, airlines flying in and out of Europe are required to purchase
permits for 15 percent of the carbon emissions they produce. The legislation applies to all outgoing and incoming
flights landing at or departing from EU airports. Under ETS, the carriers will be allowed to emit 85 percent of their
cap for free for the first year to ease the economic impact on the industry. The cap is set at 97 percent of the average
aviation emissions from 2004-2006. For the 2013-2020 period, the cap will fall to 95 percent of that number and the
free allowances will decline to 82 percent. Five US air carriers including Delta Air Lines imposed a price hike of $6 on
round-trip tickets on their Europe-bound flights citing the new EU levy. Such taxes in the future will contribute to
higher fares and thereby higher yields.
IMPROVING BUSINESS CONFIDENCE Business travel demand is generally positively correlated to business confidence.
Changes in business confidence can act as an early indication of changes in premium travel, giving a signal
sometimes up to 6 months in advance. This is expected to improve the ability of airlines to benefit from the premium
segment fare-hikes going forward.

Mitigating:
COMPETITIVE PRESSURE Competition in the airline industry is intense. This reduces the ability of carriers to
carriers like Delta to raise their air fares is further limited by severe price competition from low-cost carriers such as
Southwest.

DELTA'S INTERNATIONAL MARKET SHARE

This refers to Delta's share of total Available Seat Miles for international travel starting from or ending in the U.S..
Available Seat Miles (ASM) is a measure of capacity and is computed as the total seat on-board * total distance
flown.
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1.
2.

Delta's International Market Share declined steadily from 14.8% in 2009 to 13.3% in 2013 as a result of increased
competition from various airlines and a conservative capacity stance adopted by Delta.
However, going forward we anticipate Delta's International Market Shareto stabilize as it has decided to add flying
capacity, albeit at a moderate rate, to its network. We currently anticipate the carrier's international market share to
remain stable at its current level through the Trefis forecast period.

Forecast Rationale
Supporting:
IMPROVEMENT OF CAPACITY IN LATIN AMERICA Delta is bullish on Latin America where the airline is seeing the
strongest margins in the system. Though Delta's Latin America business is small, it has been growing at a nice pace
when compared to other regions. Geographic proximity and economic ties between the U.S. and Latin America are
promoting the region as an attractive market for US carriers to expand into. During FY 2011, Delta forged
partnerships with major Latin American carriers such as Aeromexico, GOL and Aerolineas Argentinas to get access
to Latin Americas largest aviation markets.
JOINT VENTURE WITH VIRGIN AUSTRALIA Following the U.S. Department of Transportation's approval of antitrust
immunity for Delta and Virgin Australia on trans-Pacific flights in June 2011, the two airlines have been working
closely on expanding code sharing, coordinating products and services as well as extending frequent flyer program
benefits and lounge access to customers of both carriers. The alliance is expected to create a comprehensive, fully
integrated network able to serve thousands of city-pairs in North America and the South Pacific region, providing
numerous destinations. Delta alone serves a single point in Australia, Sydney. The antitrust immunized alliance will
allow the airlines to fully cooperate on network planning and distribution. In Sep 2011, Delta announced a code share
service under which it added its code to all flights between Los Angeles and Sydney, Melbourne and Brisbane,
operated by V Australia, Virgin Australia's long-haul international carrier. The trans-Pacific code sharing agreement
is the latest expansion of the partnership between the two airlines. The partnership provides an opportunity for Delta
to grow its international market share. The combined market share of Virgin Australia and Delta of the ANZ-US
market is estimated at 21% currently, well behind both Qantas at 40% and the Star Alliance carriers, United and Air
NZ at 39%.
Delta's International Market Share (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0. 0
2. 5
5. 0
7. 5
10. 0
12. 5
15. 0
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3.
4.
5.
JOINT VENTURE WITH VIRGIN ATLANTIC Delta agreed to purchase 49% stake in Virgin Atlantic in December 2012.
This joint venture will increase Delta's presence in the highly lucrative U.S.-London air travel market. Together the
two airlines occupy 24% share of air travel market between the U.S. and the U.K..

Mitigating:
INCREASING COMPETITION FROM VARIOUS AIRLINE ALLIANCES Star Alliance is the world's first and largest airline
alliance, headquartered in Frankfurt. The alliance was founded in 1997 by five of the world's leading airlines: Air
Canada, Lufthansa, Scandinavian Airlines, Thai Airways International and United Airlines. United Airlines,
through its alliance with Star Alliance, is one the major competitors of Delta. Star Alliance has grown quite rapidly
since its beginning andas of March 2011had 27 member airlines. Another major alliance to which Delta is losing its
share is OneWorld alliance, which was founded by American Airlines, British Airways, Canadian Airlines, Cathay
Pacific and Qantas.Delta faces stiff competition from these airlines because of their global connectivity.Other
airlines like Southwest, through its acquisition of AirTran have also started targeting the international market. And
this will further increase competition for Delta on international routes.
RELIANCE UPON HUB-AND-SPOKE SERVICE RATHER THAN POINT-TO-POINT SERVICE The hub-and-spoke system
concentrates most of an airline's operations at a limited number of central hub cities and serves most other
destinations in the system by providing a one stop or connecting service through a hub. Delta relies upon the hub-
and-spoke service model.Any issue at a hub such as bad weather or security problems can create delays throughout
the system. By not concentrating operations through one or more central transfer points, the point-to-point route
structure allows for more direct non-stop routing than the hub-and-spoke model and therefore is better enabled to
control delays and total trip time. The point-to-point systems thus allows for more direct flights that will reduce
Delta's market share over the years. If any kind of issues happen at any hub regularly, it might further decrease the
market share.

AVAILABLE SEAT MILES IN INTERNATIONAL MARKETS

Available Seat Miles (ASM) is a measure of an airline's passenger carrying capacity. It is equal to the number of seats on a
flight multiplied by the number of miles flown.
Available Seat Miles in International Marketsis equal to the number of ASMs for international travel starting from
or ending in the U.S..
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1.
2.
3.

Available Seat Miles in International Marketsincreased steadily from 615 billion miles in 2009 to 712 billion miles in 2013,
driven by increasing demand for flights on Latin and Pacific international routes.
Going forward we anticipatethe Available Seat Miles in International Marketsto continue to increase over the Trefis
forecast period.

Forecast Rationale
Supporting:
CAPACITY GROWTH SUPPORTED BY STABLE DEMAND ENVIRONMENT Demand for business and leisure travel has been
strong especially in U.S.- Latin and U.S.- Pacific international routes driven the fast-growing economies of Latin
America and Asia-Pacific. This has allowed several US and international carriers to increase their capacities. In
addition, demand for flights is highly correlated with economic growth. Sustained growth in global economy will
enable carriers to increase their capacity. Boeing forecasts worldwide passenger and cargo traffic to grow by 5 percent
each annually through the next two decades. To meet this increased demand, the airplane maker forecasts the number
of airplanes in service worldwide to grow from around 20,300 at the end of 2013 to over 41,000 in 2032. North
America is forecast to constitute around 20 percent of this demand. This will promote growth in international ASMs
over the long-term.

Mitigating:
INCREASING TICKET PRICES The prices of jet fuel have risen significantly over the past few years. This has forced
carriers to raise their air fares as jet fuel costs constitute nearly a third of their total costs. Higher fares will cut in to
demand for flights, thus adversely impacting the ability of carriers to raise flying capacity.
CONSERVATIVE CAPACITY STANCE OF SOME CARRIERS In addition, several carriers have lowered their capacities in an
attempt to improve their load factors (percentage of seat occupied in a flight) and profitability. A continuation of such
a stance will impact overall growth of international ASMs.

Available Seat Miles in International Markets (Bil)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
250
500
750
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1.
2.
3.
DELTA'S INTERNATIONAL AVERAGE OCCUPANCY RATE

Occupancy rate is defined as the percentage of seats occupied by revenue paying passengers on a flight.
It is calculated by dividing Revenue Passenger Miles with Available Seat Miles.Delta's International Average
Occupancy Rate is the average occupancy rate on its international flights.

Delta's International Average Occupancy Rate increased from 80.8 % in 2009 to 83.3% in 2010 as increased leisure and
business travel outpaced capacity expansion. Occupancy rate declined to 80.7% in 2011 on more rationalized routes and
schedules coupled with slower traffic growth.
Occupancy rates increased to 83.3% in 2012 as Delta adopted a conservative stance which contributed to growth in its
occupancy rates. These rose further to and 84.8% in 2013 on the back of stable demand for flights.
Going forward we anticipate Delta's International Average Occupancy Rate to increase marginally over the Trefis
forecast period.

Forecast Rationale
Supporting:
continue to benefit occupancy rates of the carrier.

Mitigating:
COMPETITION FROM LOW COST AIRLINES Delta faces intense price competition from low-cost carriers such as
Southwest and JetBlue on certain routes including U.S.-Latin America routes. A large number of passengers opt for
lower fares offered by these carriers. This impacts occupancy rates of full service carriers such as Delta.
Delta's International Average Occupancy Rate (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
25
50
75
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1.
2.
3.

FUEL EXPENSES % REVENUES FOR DELTA'S INTERNATIONAL FLIGHTS

This represents Delta's expenses incurred on fuel as a percentage of the revenues collected from passenger travel outside
the US.

Fuel Expenses % Revenues for Delta's International Flights increased from about 41.3% in 2009 to 42.1% in 2012 driven by
a rise in crude oil prices over this period. However, these declined sharply to 38.4% in 2013 as global crude oil prices fell
during the second quarter of 2013.
Going forward, we expect Delta's international fuel expenses to decline in the near term due rising crude oil
production in the US. Thereafter, we anticipate it to rise gradually over the Trefis forecast period.

Forecast Rationale
Supporting:
fleet. It is reducing the number of 50-seater regional jets and replacing them with efficient two-class regional jets and
Boeing 737s. This will promote fuel-efficiency and reduce fuel costs for the carrier.
Fuel Expenses % Revenues for Delta's International Flights (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
10
20
30
40
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4.
5.
Mitigating:
periods when global economic growth declines. This will consequently cause an increase in jet fuel prices.
region, such as the Arab Spring of 2011, will contribute to higher global prices of crude oil.

In addition, you can see the detailed P&L for the Delta International business in the Appendix (link)

Regional Carriers

The most important drivers for the Regional Carriers business are:
Delta's Regional Passenger Yield
Delta's Regional Carriers ASM
Delta's Average Regional Occupancy Rate
Fuel Expense % Revenues for Regional Carrier Flights

DELTA'S REGIONAL PASSENGER YIELD

Delta's Regional Passenger Yieldrefers to the average amount collected from a revenue paying passenger flying on
regional carriers for a mile of flight.
Revenue paying passengers refer to passengers who contribute to the revenue. Passengers who do not contribute to
revenue include children who do no occupy seats as well as crew members and passengers traveling under some
promotion.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Free Cash Flow (Mil $) n/a n/a n/a n/a 634 733 786 801 818 832 868
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1.
2.
3.

Delta's Regional Passenger Yield increased steadily from $0.21 in 2009 to $0.29 in 2013 because of successful air fare hikes
amid stable travel demand and sharply rising fuel prices. We expectthis figureto rise gradually over the Trefis forecast
period.

Forecast Rationale
Supporting:
environment which has allowed carriers to raise their fares. The stable demand for flights in the U.S. is highly
correlated with a steadily growing U.S. economy. Continued growth of the U.S. economy and thereby demand for
flights will allow carriers to raise fares and thus improve their passenger yields.

Mitigating:
COMPETITIVE PRESSURE Competition in the U.S. airline industry is intense. This reduces the ability of carriers to
carriers such as Delta to raise their air fares is further limited by severe price competition from low-cost carriers such
as Southwest.

DELTA'S REGIONAL CARRIERS ASM

Delta's Regional Carriers ASMrefers to Available Seat Miles of Delta's Regional Carriers.
Delta's Regional Passenger Yield ($)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0. 00
0. 05
0. 10
0. 15
0. 20
0. 25
0. 30
0. 35
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1.

Delta's Regional Carriers ASMdecreased steadily from 32.6 billion miles in 2009 to 28.3 billion miles in 2013 as a result of
increasing competition for low cost carriers such as Southwest and AirTran.
We expectDelta's regional ASMsto continue to decline over the Trefis forecast.

Forecast Rationale
Supporting:
COMPETITION FROM LOW COST AIRLINES Delta's regional operations arefacing stiff competition from low cost
airlines such as Southwest and JetBlue. Lower fares offered by these carriers attract several passengers which impacts
passenger traffic for Delta's regional services. As a result, Delta is forced to lower its capacity on these routes.

DELTA'S AVERAGE REGIONAL OCCUPANCY RATE

Occupancy rate is defined as the percentage of seats occupied by revenue paying passengers in a flight.
It is calculated by dividing Revenue Passenger Miles with Available Seat Miles.Delta's Average Regional Occupancy
Raterepresents the average of occupancy rates on flights of Delta's regional operations.
Delta's Regional Carriers ASM (Bil)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
5
10
15
20
25
30
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1.
2.
3.

Delta's Average Regional Occupancy Rateincreased steadily from 77.4% in 2009 to 79.3% in 2012 as lower capacity helped
in maintaining fuller planes. However, the carrier's regional occupancy rates fell to 77.3% in 2013. Going forward, we
expectDelta's Average Regional Occupancy Rate to rise gradually over the Trefis forecast period.

Forecast Rationale
Supporting:
continue to benefit occupancy rates of the carrier

Mitigating:
COMPETITION FROM LOW COST AIRLINES Delta faces intense price competition from low-cost carriers such as
Southwest and JetBlue. A large number of passengers opt of lower fares offered by these carriers.
This impacts occupancy rates of full service carriers including Delta.

FUEL EXPENSE % REVENUES FOR REGIONAL CARRIER FLIGHTS

Fuel Expense % Revenues for Regional Carrier Flightsrepresents the expense incurred on fuel as a percentage of total
revenues for Delta's regional carrier flights.
Delta's Average Regional Occupancy Rate (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
10
20
30
40
50
60
70
80
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1.
2.
3.
4.
5.

Fuel Expense % Revenues for Regional Carrier Flights increased from about 25.3% in 2009 to 34.3% in 2011 driven by
significant rise in crude oil prices over this period. However, these declined to 33% in 2012 and 32.3% in 2013 due to
softening of crude oil prices as well as fuel efficiency gains from replacement of old aircraft with new ones.
Going forward, we expect Delta's regional fuel expenses to decline in the near term due to rising US crude oil
production. Thereafter, we anticipate it to rise gradually over the Trefis forecast period.

Forecast Rationale
Supporting:
fleet. It is reducing the number of 50-seater regional jets and replacing these with efficient two-class regional jets and
Boeing 737s. This will promote fuel-effciency and reduce fuel costs for the carrier.

Mitigating:
periods when global economic growth declines.
region like the Arab Spring of 2011 will contribute to higher global prices of crude oil.
Fuel Expense % Revenues for Regional Carrier Flights (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
5
10
15
20
25
30
35
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In addition, you can see the detailed P&L for the Regional Carriers business in the Appendix (link)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Indirect Expense (Mil $) 315 109 370 -902 601 605 613 637 653 659 650
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Appendix

Summary P&L for Delta Air Lines

Summary P&L for Delta Air Lines
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Revenues (Bil $) 31.8 35.1 36.7 37.8 39.6 41.5 43.4 45.4 47.1 48.4 49.9
Delta US (% of total) 37.4 37.4 38.3 40.3 40.3 40.4 40.5 40.7 40.8 40.8 40.8
Cargo and Other Businesses (% of
total)
14.2 13.8 13.3 12.8 12.5 12.3 12.1 12.0 11.9 11.9 11.9
Delta International (% of total) 30.0 30.6 30.5 30.0 30.4 30.9 31.4 31.6 32.1 32.4 32.8
Regional Carriers (% of total) 18.4 18.2 17.9 17.0 16.7 16.4 16.0 15.7 15.2 14.8 14.4
Direct Expenses (Bil $) 25.8 29.8 30.8 30.7 32.1 33.5 35.1 36.7 38.2 39.3 40.6
Delta US (% of total) 26.1 25.0 26.8 34.2 34.7 35.2 35.4 35.7 35.8 35.8 35.8
total)
35.4 44.7 40.7 33.6 32.3 31.4 31.0 30.8 30.8 31.0 31.2
Delta US (% of total) 26.1 25.0 26.8 34.2 34.7 35.2 35.4 35.7 35.8 35.8 35.8
total)
35.4 44.7 40.7 33.6 32.3 31.4 31.0 30.8 30.8 31.0 31.2
Indirect Expenses (Bil $) 1.49 0.63 2.02 -5.93 3.96 4.02 4.16 4.40 4.63 4.80 4.86
Delta US (% of total) 26.1 25.0 26.8 34.2 34.7 35.2 35.4 35.7 35.8 35.8 35.8
total)
35.4 44.7 40.7 33.6 32.3 31.4 31.0 30.8 30.8 31.0 31.2
Delta US (% of total) n/a n/a n/a n/a 34.7 35.2 35.4 35.7 35.8 35.8 35.8
total)
n/a n/a n/a n/a 32.3 31.4 31.0 30.8 30.8 31.0 31.2
Delta International (% of total) n/a n/a n/a n/a 17.8 18.4 18.8 19.0 19.2 19.4 19.5
Regional Carriers (% of total) n/a n/a n/a n/a 15.2 15.1 14.8 14.5 14.1 13.7 13.4
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Detailed P&L for the Delta US business

The most important drivers for the Delta US business are discussed above, here is the detailed P&L.

Delta US: Detailed P&L
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues
Delta US Revenue (Bil $) 11.9 13.1 14.0 15.2 16.0 16.8 17.6 18.5 19.2 19.8 20.4
Available Seat Miles in US (Bil) 674 681 683 693 703 714 725 735 746 758 769
Delta's US Market Share (%) 16.0 15.8 15.7 15.8 15.9 15.9 16.0 16.0 16.1 16.1 16.2
Delta's Average US Occupancy
Rate (%)
84.2 84.5 85.3 84.6 84.7 84.8 84.9 85.0 85.1 85.2 85.3
Delta's US Passenger Yield ($) 0.13 0.14 0.15 0.16 0.17 0.17 0.18 0.18 0.19 0.19 0.19
Expenses
Delta's Non Fuel Expenses %
Revenues (%)
53.3 51.4 50.4 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0
Fuel Expense % Revenue for
Delta's US flights (%)
33.7 38.6 38.2 33.2 32.7 32.3 32.3 32.4 32.5 32.6 32.7
CapEx as % of EBITDA (%) 22.6 23.7 33.2 36.4 31.4 30.4 30.0 30.0 30.0 30.0 30.0
Effective Tax Rate (%) 2.47 0.00 1.56 0.00 38.0 38.0 38.0 38.0 38.0 38.0 38.0
Account Receivable Days 16.7 16.2 16.9 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5
Inventories as % of Revenue (%) 1.00 1.05 1.10 0.95 0.95 0.95 0.95 0.95 0.95 0.95 0.95
Prepaid Expenses % of Revenues
(%)
3.65 4.04 5.35 5.36 5.36 5.36 5.36 5.36 5.36 5.36 5.36
Air Traffic Liability % of
Revenues (%)
10.4 9.91 10.1 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9
Account Payable Days (%) 2421 1957 2721 2733 2747 2760 2774 2780 2783 2783 2783
Frequent Flyer Deferred Revenue
% of Revenues (%)
5.32 5.27 4.93 4.93 4.88 4.83 4.78 4.73 4.68 4.63 4.58
Accrued Salaries % of Revenues
(%)
4.31 3.89 4.58 5.10 5.10 5.10 5.10 5.10 5.10 5.10 5.10
Other Current Accrued Liabilites
% of Revenues (%)
2.06 5.32 4.32 4.56 4.56 4.56 4.56 4.56 4.56 4.56 4.56
Other Non Current Assets % of
Revenues (%)
3.25 2.85 2.98 3.45 3.65 3.85 4.05 4.25 4.45 4.65 4.85
NonCurrent Frequent Flyer
Revenue % of Revenue (%)
8.75 7.69 7.17 6.77 6.37 6.07 5.77 5.47 5.16 4.96 4.76
Other NonCurrent Liabilities %
of Revenues (%)
4.83 4.04 4.50 4.53 4.53 4.53 4.53 4.53 4.53 4.53 4.53
Total Expenses (Bil $) 10.7 12.0 13.0 10.8 14.7 15.4 16.1 17.0 17.7 18.2 18.8
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Detailed P&L for the Cargo and Other
Businesses business

The most important drivers for the Cargo and Other Businesses business are discussed above, here is the detailed P&L.

Delta US: Detailed P&L continued
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cargo and Other Businesses: Detailed P&L
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues
Delta's Freight & Mail Revenue (Bil
$)
0.85 1.03 0.99 0.94 0.96 0.98 1.01 1.04 1.08 1.11 1.14
Delta's Freight & Mail Revenue
($ Bil)
0.85 1.03 0.99 0.94 0.96 0.98 1.01 1.04 1.08 1.11 1.14
Extra Baggage, Ticketing Changes
and Other Ancillary Revenue (Bil $)
3.65 3.83 3.87 3.89 4.01 4.13 4.26 4.38 4.51 4.65 4.79
Extra Baggage, Ticketing
Changes and Other Ancillary
Revenue ($ Bil)
3.65 3.83 3.87 3.89 4.01 4.13 4.26 4.38 4.51 4.65 4.79
Expenses
Cargo and Other Businesses
EBITDA Margin (%)
46.7 48.6 49.6 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0
(%)
3.65 4.04 5.35 5.36 5.36 5.36 5.36 5.36 5.36 5.36 5.36
Revenues (%)
10.4 9.91 10.1 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9
% of Revenues (%)
5.32 5.27 4.93 4.93 4.88 4.83 4.78 4.73 4.68 4.63 4.58
(%)
4.31 3.89 4.58 5.10 5.10 5.10 5.10 5.10 5.10 5.10 5.10
% of Revenues (%)
2.06 5.32 4.32 4.56 4.56 4.56 4.56 4.56 4.56 4.56 4.56
Revenues (%)
3.25 2.85 2.98 3.45 3.65 3.85 4.05 4.25 4.45 4.65 4.85
8.75 7.69 7.17 6.77 6.37 6.07 5.77 5.47 5.16 4.96 4.76
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Detailed P&L for the Delta International
business

The most important drivers for the Delta International business are discussed above, here is the detailed P&L.

Cargo and Other Businesses: Detailed P&L continued
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
of Revenues (%)
4.83 4.04 4.50 4.53 4.53 4.53 4.53 4.53 4.53 4.53 4.53
Delta International: Detailed P&L
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues
Delta International Revenue (Bil $) 9.53 10.7 11.2 11.3 12.0 12.8 13.6 14.3 15.1 15.7 16.4
Available Seat Miles in
International Markets (Bil)
626 667 682 712 733 755 778 801 825 850 875
Delta's International Market
Share (%)
14.8 14.4 13.8 13.3 13.3 13.3 13.3 13.3 13.3 13.3 13.3
Delta's International Average
Occupancy Rate (%)
83.3 80.7 83.3 84.8 85.0 85.2 85.4 85.6 85.7 85.8 85.9
Delta's International Passenger
Yield ($)
0.12 0.14 0.14 0.14 0.15 0.15 0.15 0.16 0.16 0.16 0.16
Expenses
Revenues (%)
53.3 51.4 50.4 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0
Fuel Expenses % Revenues for
Delta's International Flights (%)
35.9 42.2 42.1 38.4 37.9 37.5 37.5 37.6 37.7 37.8 37.9
(%)
3.65 4.04 5.35 5.36 5.36 5.36 5.36 5.36 5.36 5.36 5.36
Revenues (%)
10.4 9.91 10.1 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9
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Detailed P&L for the Regional Carriers
business

The most important drivers for the Regional Carriers business are discussed above, here is the detailed P&L.

Delta International: Detailed P&L continued
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% of Revenues (%)
5.32 5.27 4.93 4.93 4.88 4.83 4.78 4.73 4.68 4.63 4.58
(%)
4.31 3.89 4.58 5.10 5.10 5.10 5.10 5.10 5.10 5.10 5.10
% of Revenues (%)
2.06 5.32 4.32 4.56 4.56 4.56 4.56 4.56 4.56 4.56 4.56
Revenues (%)
3.25 2.85 2.98 3.45 3.65 3.85 4.05 4.25 4.45 4.65 4.85
8.75 7.69 7.17 6.77 6.37 6.07 5.77 5.47 5.16 4.96 4.76
of Revenues (%)
4.83 4.04 4.50 4.53 4.53 4.53 4.53 4.53 4.53 4.53 4.53
Regional Carriers: Detailed P&L
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues
Regional Carriers Revenue (Bil $) 5.85 6.39 6.57 6.41 6.61 6.81 6.95 7.10 7.18 7.19 7.20
Delta's Regional Carriers ASM
(Bil)
31.9 31.2 29.3 28.3 28.0 27.7 27.4 27.2 26.9 26.6 26.4
Delta's Average Regional
Occupancy Rate (%)
78.4 78.5 79.3 77.3 77.4 77.5 77.6 77.7 77.8 77.9 78.0
Delta's Regional Passenger Yield
($)
0.23 0.26 0.28 0.29 0.30 0.32 0.33 0.34 0.34 0.35 0.35
Expenses
Revenues (%)
53.3 51.4 50.4 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0
Fuel Expense % Revenues for
Regional Carrier Flights (%)
25.3 34.3 33.0 32.3 31.8 31.4 31.4 31.5 31.6 31.7 31.8
Indirect Expenses (Mil $) 315 109 370 -902 601 605 613 637 653 659 650
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Regional Carriers: Detailed P&L continued
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(%)
3.65 4.04 5.35 5.36 5.36 5.36 5.36 5.36 5.36 5.36 5.36
Revenues (%)
10.4 9.91 10.1 10.9 10.9 10.9 10.9 10.9 10.9 10.9 10.9
% of Revenues (%)
5.32 5.27 4.93 4.93 4.88 4.83 4.78 4.73 4.68 4.63 4.58
(%)
4.31 3.89 4.58 5.10 5.10 5.10 5.10 5.10 5.10 5.10 5.10
% of Revenues (%)
2.06 5.32 4.32 4.56 4.56 4.56 4.56 4.56 4.56 4.56 4.56
Revenues (%)
3.25 2.85 2.98 3.45 3.65 3.85 4.05 4.25 4.45 4.65 4.85
8.75 7.69 7.17 6.77 6.37 6.07 5.77 5.47 5.16 4.96 4.76
of Revenues (%)
4.83 4.04 4.50 4.53 4.53 4.53 4.53 4.53 4.53 4.53 4.53
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Delta Air Lines 2014-05-16

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