Paul Jacobson did the speaking today and i have a few notes. Consolidation is a big driver in the industry health. Scale is important and consolidation is what has given the industry that scale. Drive to sustainability is the idea at Delta. Still have work to do but getting better YOY 3 Billion benefit in fuel YOY from 2015-2016. 2% cost on a unit bases and plan to be back to flat to up RASM by summer. unit revenue 8 cents on the dollar system wide over competition, 20 cents domestically Focus is still very much on the long term and not the short term. debt reduction saving over 1 billion now in interest costs. 2016 is expected to be a strong year for Delta. 0-2% capacity growth. 3 billion in fuel savings over 2015 Still a big focus on un-bundling fares 300M of incremental revenue growth YOY expected to be over 1B by 2018. 747 wind down over the next 18months Trying to stay nimble with the fleet and able to shift capacity where needed. SEA/NYC/LAX/MEX all doing very well. Brazil not so much. 75% of the fuel savings was saved in 2015, despite unit revenue head winds. Positive RASM by S16 Capacity discipline, capacity discipline capacity discipline Other carriers are tossing capacity (unprofitable) at chasing market share. expecting to see some currency benefit in 2016 but US interest rates are expected to rise making the dollar strong which will eat into some of that benefit Hedge book completely closed in January, 100-200M losses from those in each quarter The company is going to look into how(if) they hedge in the future. If they get back into the hedging game then they will start with a clean sheet (from the January close out) Trainer doing well. Delta believes it is keeping jet fuel lower because of the jet fuel out put from Trainer 300M in profit last year(2015) Slight loss in Q1 for Trainer Trying to keep driving margins up in every division of the company Part out program a big key for Delta. Older fleet but lower maintenance costs even than airlines like AA who have shinny jet syndrome (I added the shinny jet syndrome part) Best reliability even with the older fleet. 20% increase in revenue on 20% fewer departures and 12% fewer aircraft since the merger. still going to increase gauge on aircraft (ie E90s over 50- seaters) bettering the product while increasing gauge historical costing cutting has decreased reliability/product, Delta expects to be able to keep its capex numbers flat (2-3B YOY) basically no matter what now, thanks to consolidation and balance sheet clean up. 10 Billion in debt paid down in the last 6 years. Airlines not seeing a recession right now but one will happen, Delta expects to fair much better than the past and others. Pension going to see increase in pay down. improved return on invested capital by 27 points since the merger that puts Delta in the top 10%of S&P industrials Other big part of consolidation is the diversity in the network. Delta was mostly a TATL and distant third in Latin America while NWA was a mostly TPAC airline. Merged airline has built a better Latin American network (and is still working on such) and rebuild of the TPAC network has made Delta more nimble than in the past. Now if one part of the network is doing poorly the airline can shift capacity to other parts of the network. Also fleet make up allows Delta to pull capacity if needed and not have brand new airplanes sitting around costing money. Branded fares are going to be the way future. HVCs seem to really like it. As he said, if you buy in the last minute then in the old model you got what was ever left over, now the 6-12 month out family trip to MCO isn't getting those premium seats and the last minute HVCs are. Premium economy doing well. Delta expecting 400M in incremental revenue from American Express deal in 2016. expecting to double by 2020. None of it matters if the airline sees all this money and goes out and increases it debt by buying large amounts of airplanes (I think that was a shot at another AAirline) For 1991-2001, the last peak, over 1,000 aircraft on order. This time its 50% of that. Buying aircraft just to buy aircraft is one of the key reasons the industry was hurting so bad after 9/11 Thats all for today, there is going to be another presentation tomorrow (JP Morgan) and I will try to post some notes from it tomorrow.