Key Financial Results
- Q1 Performance: Delivered $14.2 billion in record revenue (+9.4% YoY), earnings of $0.64/share, pretax profit of $530 million, and $1.2 billion free cash flow
- Margin: 4.6% operating margin despite significant fuel headwinds
- Fuel Impact: Average fuel price $2.62/gallon in Q1, nearly $0.40 higher than expected; Q2 assumption ~$4.30/gallon (roughly double prior year)

Q2 2026 Outlook
- Revenue: Low-teens growth on flat capacity (down from planned growth)
- Fuel Recapture: Expecting to recapture 40-50% of >$2 billion fuel headwind
- Operating Margin: 6-8% with pretax profit of ~$1 billion
- Capacity Strategy: Reducing unprofitable flying (edge-of-day, red-eyes, off-peak) with downward bias until fuel situation improves

Demand Strength
- Broad-Based Resilience: Strong demand across corporate and leisure segments, all geographies
- Cash Sales: Up double-digits in March, momentum continuing into April
- Corporate Recovery: Double-digit growth across nearly all sectors; coastal markets (NY, LA, Boston, Seattle) particularly strong
- Premium Performance: Mid-teens growth in premium and loyalty revenue; first positive main cabin unit revenue growth since late 2024
- AmEx Partnership: 12% spend growth, $2+ billion in quarterly remuneration

Strategic Positioning
Competitive Advantages:
- Investment-grade balance sheet at all three rating agencies
- Adjusted net debt down 20% YoY to $13.5 billion (below 2019 levels)
- Monroe refinery providing partial offset (~$300M benefit in Q2)
- Best-in-class operational reliability (Cirium #1 in North America for 5th consecutive year)

Industry Consolidation Expectations: CEO Bastian emphasized high fuel prices historically drive industry consolidation, noting many competitors haven’t earned cost of capital in years. Expects structural industry reforms favoring Delta’s position.

Operational Initiatives
- Fleet Renewal: 95 additional aircraft orders placed; newer aircraft feature ~50% premium seating vs 30% in retiring planes
- Premium Segmentation: On track for further cabin segmentation by year-end
- Digital Innovation: Partnership with Amazon LEO for next-gen satellite connectivity; Delta Sync platform approaching 110M customer logins
- MRO Business: Revenue more than doubled to $380M in Q1; targeting $1.2B full-year (+50% YoY)

Challenges
- Operational Resilience: Acknowledged recovery issues from severe weather and pilot contract changes; working with union to improve
- Cost Pressures: Non-fuel unit costs up 6% in Q1, expected similar in Q2 due to capacity reductions and crew-related costs

Management Perspective
Leadership expressed confidence in Delta’s structural advantages and ability to navigate volatility, emphasizing the premium customer base remains resilient to geopolitical and macro uncertainty, unlike previous cycles. The company views current high-fuel environment as ultimately reinforcing Delta’s competitive position through industry rationalization.