Delta Air Lines, Inc.

Good morning, everyone, and welcome to the Delta Airlines June Quarter 2026 Financial Results Conference Call. My name is Matthew, and I'll be your coordinator. At this time, all participants are on a listen-only mode until we conduct a question and answer session following the presentation. As a reminder, today's call is being recorded. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time. I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations and Corporate Development. Please go ahead.

Thank you, Matthew. Good morning, everyone, and thanks for joining us for our June quarter 2026 earnings call. Joining us from Atlanta today are our CEO, Ed Bastian, our Chief Operating Officer, Dan Janki, our Chief Commercial Officer, Joe Esposito, and our Chief Financial Officer, Eric Snell. Ed will open the call with an overview of Delta's performance and strategy. Dan will cover the operation. Joe will provide an update on the revenue environment, and Eric will discuss costs in our balance sheet. After the prepared remarks, we'll take analyst questions, and we ask that you please limit yourself to one question with a brief follow-up so that we can get to as many of you as possible. As a reminder, today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from forward-looking statements. Some of the factors that may cause such differences are described in Delta's SEC filing. We'll also discuss non-GAAP financial measures, and all results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the investor relations page at ir.delta.com. And with that, I'll turn the call over to Ed.

Thank you, Julie. Good morning, everyone. We appreciate you joining us today. This morning, we reported our June quarter results, and it's clear that Delta's brand and industry position are stronger than ever. We generated record revenue, which grew 14%, increasing more than $2 billion over last year. This reflects sustained strength in demand and momentum across our diversified business. We delivered pre-tax profits of $1.4 billion, earnings of $1.56 per share, and an operating margin of 9%, all better than the guidance that we provided at the start of the quarter. Return on invested capital was 11%. Well above our cost of capital. So through the first half, we've generated $1.4 billion of free cash flow, fortified our investment-grade balance sheet, and announced a 15% increase to the dividend. And most importantly, we kept investing to make travel safer, easier, and more enjoyable for our customers. Our people are what truly set Delta apart. Their efforts delivered industry-leading performance across key operational metrics, and also earned Delta recognition from the points guide as the best US airline for the eighth consecutive year. Our people are our number one competitive advantage. I want to thank the Delta team for their commitment to delivering for our customers every day, particularly during the busy summer travel season. In May, we announced a 4% pay increase and we've accrued nearly $500 million towards next year's profit sharing payout through the first half of the year. reflect our longstanding commitment to sharing success with the people who drive it. Turning to the current environment, the U.S. economy remains resilient, supported by strong employment, rising household incomes, and significant wealth accumulation. Our customers are prioritizing experiences and investing in the moments and connections that matter most to them, driving sustained strength and demand for air travel. These trends align well with Delta's strategy demonstrating the loyalty that we are seeing across customer segments and powering high margin diverse revenue streams that enhance the resilience of our business. Our Delta American Express partnership is a clear example of the strength of our loyalty ecosystem. Card spend has grown double digits for the past seven quarters with particular strength among our premium reserve cardholders. With continued momentum in both new card acquisitions and spend, We expect remuneration of $9 billion this year, up 10% over 2025. As I stated in April, high fuel prices have proven to be the most powerful catalyst for change in our industry. And this year, that has once again been the case. Coming into the recent fuel spike, most US carriers were already struggling to earn their cost of capital against a backdrop where industry airfares have meaningfully trailed inflation Thank you very much. Thank you. and much of the industry still earning returns below its cost of capital, we believe current revenue momentum should remain sustainable even if fuel prices moderate. That is an important step towards improving the industry's financial health and earning sustainable returns over time. For Delta, we are executing on our strategy from a position of strength and with continued revenue momentum, measured capacity and a more stable fuel environment, We expect to return to earnings growth on double-digit operating margins in the second half of this year. For the full year, we are affirming the guidance that we set at the start of the year, even with a multibillion-dollar fuel headwind. Our outlook for earnings of $6.50 to $7.50 per share represents growth of 20% year-over-year, and our free cash flow outlook of $3 to $4 billion brings our three-year cumulative total to over $11 billion. Looking beyond 2026, we are confident in our long-term financial framework and path to mid-teens margins and return on invested capital. The strength and consistency of our results give us the ability to keep investing and innovating to extend Delta's lead, elevating the experience and creating a more seamless and personalized travel journey. As we invest in the areas that customers value the most, loyalty to Delta continues to grow. Last month, we opened our second Delta One Lounge at LAX, bringing the Delta One Lounge network to five locations and expanding the industry's gorgeous club and lounge footprint. Our Delta Amex co-brand card continues to lead the industry, and our recent portfolio enhancements are strengthening the value proposition for both existing and prospective cardholders. We are also making the journey more seamless through Delta Concierge, our AI-powered digital assistant, which is now available to more than half of FlyDelta app users with a full rollout later this month. In the air, we continue to set the standard on connectivity. Fast, free Wi-Fi is already available to members across nearly our entire fleet, with satellite upgrades coming online in the months ahead to deliver even faster speeds and broader global coverage. And starting in 28, Amazon Leo will unlock the next generation of onboard connectivity, reach, and personalization. In closing, our performance and outlook reinforce the durability and the differentiation of the Delta business model and our investment thesis. Looking ahead, I am incredibly optimistic about Delta's future and our opportunities to deliver even better performance for our employees, our customers and our owners. Now, Dan, we'll cover off on our operational results.