Ed Bastian (2:13)

And it's understandable. We've seen some reduction in bookings. Not material, but, you know, maybe 5 to 10% from where we would normally be. The first. One of the frustrating things to me is that heading into this period, when they decided on On Thursday to start canceling flights. We had tremendous momentum. The revenue based business going double digits, premium categories all going double digits, if not more. We're going really strong. And then you get into this situation, all those travelers say, well, maybe I'll wait and see what's going to happen here. So we did see some refunds. We did see some. We were very flexible in refunds. If people wanted their money back, we were happy to. Not happy to, but we wanted to make sure they were being taken care of. But I think as soon as people see it's ready to go, they're going to come right back.

Interviewer (3:04)

Do you think there's going to be any permanent hit to the fourth quarter earnings because of the shutdown?

Ed Bastian (3:10)

You can't, you can't make up a one week of Delta. We had a little over 2,000 cancellations. You can't make that up within the quarter. So yes, there was an impact like there's going to be in all the airlines. It's transitory. I think everyone understands why it wasn't our doing. It was something that we were used almost as a political hostage to get, to get the government back together. So so be it. But the good news is that, you know, the outlook is really strong and the holidays will be a, a good test of that.

Interviewer (3:37)

You talked about how July you really started to see things pick up and accelerate and we've heard that from a lot of the airlines. Do you have visibility into the first quarter that this could continue and that this is just gaining steam?

Ed Bastian (3:48)

Yeah, yeah, we are. Visibility is about 90 days out, so you're going into January. So we would see the return. Traffic from, from Christmas and New Year's looks really good. So I see no reason to think that this thing is going to slow down. And again, it's in our category, which is our sweet spot is our premium traveler. So whether it's our international traveler or business traveler, higher end people that wanting a premium service and premium product, we're in the experience economy. And the one thing we've learned over the last several years is that the greater the experience, the more people willing to pay for it and the demand is even higher. The more commodity your experience is, the less people are willing to evaluate. And so we're in the sweet spot. We're leading the premium experience in the airline category. And I think we're going to have a really good next year.

Interviewer (4:32)

I'm glad you mentioned that. We often talk about Delta and how this is the Delta economy, how you guys are leading in the airline space. You also highlight how different it is with respect to the premium offerings and some of the profitability there versus the rest of the business. I know that premium and loyalty accounted for about 60% of revenues so far this year versus 57% last year. How far can this go? Is this sustainable?

Ed Bastian (4:55)

I think it is as long as you're giving people value and they get great value from us because we unlock those opportunities. You know, as long as people want to go and explore Riyadh, where I was just out a couple of weeks ago and we announced a direct flight to Riyadh from Atlanta next year or Australia or the Maldives or anywhere you want to go within our country to reunite with friends and families and have a getaway. If you're a premium traveler, Delta is your first call, and we love that.

Interviewer (5:24)

How much is international increasingly a part of that? I know that Korea Air was something that Delta has a partnership with, and increasingly these new routes are coming out. How much is that, the expansion plan? Very much so.

Ed Bastian (5:34)

Well, today about two thirds of our revenues are us. One third is international. In the second century, which starts January 1st, I think we're going to see that start to get closer to 50, 50, and eventually international will overtake the domestic system. One of the things I tell people wherever I go is that we're a growth industry. Only one in five people in the world have ever stepped foot on an airplane. When you think about that, it's pretty amazing. We take it for granted here. If you told someone here in the US you haven't been an airplane, they think you were living in a cave somewhere, Right. But the world hasn't experienced air travel, and we got to find ways to make it affordable, to make it sustainable, to make it accessible, and that's what we're focused on.

Interviewer (6:14)

How much have you seen? I know the international inbound travel to the United States took a bit of a dip after Liberation Day. Have you seen it really coming back? Or Is this primarily U.S. travelers going overseas?

Ed Bastian (6:25)

It's still mostly U.S. travel heading overseas, and we supplemented with more U.S. point of sale version. But the international travelers are coming back. People don't. People want to be here. So I think once the trade uncertainties were starting to lift, once people saw that, you know, what immigration was about and where, where people were potentially vulnerable as compared to people that have passports and have normal, normal business. Those are the people we want coming into our country to be able to spend time with them and invest in our economy. People are getting much, much, much more comfortable. And the place you see it the most, the most important is in the international business because international business is really picking up a lot.

Interviewer (7:03)

I love that you're celebrating the 100th centennial because it highlights how big of a moment of change we're in currently too. And I would love to take some time to look forward in next two years, next five years, next 10 years, next century. What air travel is going to look like given some of the massive changes that we're seeing just technologically as well as societally.

Ed Bastian (7:24)

Well, I think you'll see the demand strength continue to build. We know through our history people just want to travel, they want to go. As long as again you do, you make it accessible, affordable, sustainable, those are our priorities. In order to do that, that means the new planes need to come in much more fuel efficient than the planes that we've taken. Looking for new form factors in terms of what that airplane looks and what the body, the aerodynamics of the planes of the future are. We're doing it with a small carrier today called Joby with the electric vehicle takeoff. It's not going to replace Delta, but it's going to be able to get people moving quickly from home to airport to their destination. And that's going to be, I think with electric and battery power. It's going to be an interesting innovation that we face. But we have so many ways in which people want to continue to move and continue to explore. We need to have the technology advanced. So we spend a lot of time with Boeing and Airbus and the engine manufacturers and understanding where they're headed because they really drive those opportunities. But then looking also at the partners we built with Uber, which I'll be back here at the Exchange this afternoon we had an exclusive relationship with them with YouTube TV. We announced this year an exclusive relationship with them with DraftKings with Starbucks. So many brands kind of want to sit next to the premier travel leader because we drive hundreds of millions of people an opportunity and we draft off each other. And so you're building an ecosystem and that ecosystem will increasingly get. And people love loyalty, they love brand experience, they love their points, they love acknowledgment and recognition on both platforms.

Interviewer (8:59)

Do you think that there's room for more than the handful of the premier airline brands at the top? Do you think that for the low cost airlines there's enough room in that future vision of the airline space?

Ed Bastian (9:09)

Well, I know they're all trying to, to get there. This is, this is hard. This is hard. And it takes years of investment in reliability product category the consistency at the service level. It's the people on the plane. I always tell people we may have great hard product. It's the soft product that matters. It's the consistency and the delivery that our people make that make the difference for the experience. That's going to take years. And no, I think some of them will improve. But I think it's a long It's a tall ask for some of the lower end carriers to find price points where they can actually compete with us.

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