Delta leaders explained to Wall Street how 2018 performance shows Delta is on track to continue leading the industry.
Here’s a recap of what Delta leaders are saying from the stage in New York at Delta’s 2018 Investor Day. Speakers are highlighting a successful 2018, setting 2019 targets and explaining to Wall Street why Delta’s durable and sustainable business model creates resiliency for employees, customers and owners.
CEO Ed Bastian
Investor Day 2018 began with a recap of the year’s successes, including how the Delta team enabled an industry-leading operation and offset 90 percent of a fuel cost headwind through revenue growth.
He said that 2018 will be the fourth year in a row that Delta will post a profit of $5 billion, though he emphasized continued focus on costs, saying Delta has to “stay disciplined.”
On the revenue side, Bastian said strategic moves have boosted diversity of revenues. “At Delta, 30 percent of our total revenue stream is coming from premium products, which is twice what it was six years ago.”
Bastian said Delta’s unique culture drives all of its strategic initiatives, and that Delta never loses sight that it is ultimately a people enterprise.”This is a business of caring for people and we have the best people who care in the business.”
He closed with five takeaways about Delta:
President Glen Hauenstein
He expounded on Delta’s projection of 4-6 percent top-line revenue growth in 2019, saying demand remands strong for all of Delta’s products and services, and the company is just getting started to really provide what customers want in the marketplace.
“We have a long runway of opportunity,” Hauenstein said. “We feel very, very confident that we have a long way to go to improve our margins and to improve our customer experience and our brand.”
Delta’s opportunity lies in four areas, he said:
Gil West, Chief Operating Officer
West told attendees that more customers arrive on-time on Delta than on any other airline, through industry-best completion factor and on-time arrivals as measured by preliminary DOT data.
He underscored that a high degree of operational reliability is a bedrock for continuous improvement across all aspects of Delta’s business, and is a catalyst for applied innovation as well as boosting Delta’s competitive advantage at its subsidiary businesses, like Delta Material Services and Delta Flight Products.
Tim Mapes, Chief Marketing Officer
“Delta has the best understanding of the customer.”
That’s how Mapes began his remarks, noting that Delta excels at gathering and interpreting data from nearly 200 million customers a year to evaluate their likes, dislikes and much more. “We have a bias toward action that feeds into this idea of listen, respond, listen,” he said.
Mapes said the Delta brand is moving beyond a high-quality industrial transport to a consumer brand, and a more trusted one every day through the work of Delta’s people and culture to consistently drive superior travel experiences.
Eric Phillips, Senior Vice President – Revenue Management
Phillips detailed Delta’s trajectory to improve choice and customizability for Delta’s customers through a growing array of products and service.
“Over the last 10 years, Delta has moved closer to the customer. When we connected with the customer, what they told us they wanted was choice.”
He added that premium products are top of mind for Delta customers and that their behavior has validated Delta’s investments in Delta Comfort+, Delta Premium Select, the Delta One suite and, most recently, the ability to purchase upgrades with Delta SkyMiles.
He also said the ability to pay for checked bags with miles is expected to be available in 2020 as well as ongoing enhancements to the delta.com shopping experience and overall personalization.
Rahul Samant, Chief Information Officer
Samant emphasized that technological innovations are both customer and employee centric, adding that as recently as five years ago, innovations that customers today enjoy at Delta would have been “beyond the realm of reality.”
What’s driving Delta’s approach to technology going forward? “It’s all about practical and applied innovation,” he said.
“Just in the 15 mins I’ve been on stage, we’ve had 600,000 customer interactions in our physical and digital platforms,” he said. “That’s the population of Washington, D.C. These are the opportunities to make a real difference.”
Joanne Smith, Chief Human Resources Officer
Smith detailed why Delta’s unique culture provides a competitive advantage and how making a great place to work for employees is what sets Delta apart from competitors.
“Culture is not something that’s trending, it’s something that’s been going on for 94 years,” she said. “The theme is, from our founder to our CEO Ed Bastian, this is a people business. We take care of our employees and they take care of our customers.”
Delta’s culture is the foundation of Delta’s success and creates the conditions for a sustained margin premium, a metric of growing importance to investors, and operates in a cycle that continually feeds on itself and creates momentum, she explained.
Paul Jacobson, Chief Financial Officer
“I feel very good about where we are today, with less unknowns and more in the hands of execution which is where our team excels,” Jacobson said, summing up for investors Delta’s strong position heading into 2019.
The fact that 35 percent of Delta’s mainline fleet will be replaced by 2023 is a huge opportunity for boosting efficiency through reduced fuel burn and larger gauge, he said. At the same time, these new aircraft will enhance the customer experience and offer more premium seats.
Toys for Tots check presentation
Bastian and a group of frontline employees capped off Delta’s 2018 Investor Day with a $25,000 check presentation to Gen. Pete Osman (ret.) CEO and President Marine Toys for Tots Foundation.
“Delta has really stepped up this year in a year that’s really important to the Marine Toys for Tots program,” said Gen. Osman. “I can guarantee it will make a big difference in the lives of children this year. The demand is up and getting support like we’ve got from Delta really makes a difference.”