SEC Form 10-Q filed by Delta Air Lines Inc.

10/10/24 4:16:49 PM ET

Air Freight/Delivery Services

Consumer Discretionary

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dal-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


Or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-5424

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)


Delaware						58-0218548
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Post Office Box 20706
Atlanta, Georgia						30320-6001
(Address of principal executive offices)						(Zip Code)

Registrant's telephone number, including area code: (404) 715-2600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

DAL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares outstanding by each class of common stock, as of September 30, 2024

Common Stock, $0.0001 par value - 645,281,221 shares outstanding

This document is also available through our website at http://ir.delta.com/.


Table of Contents

			Page
Forward Looking Statements			1
Report of Independent Registered Public Accounting Firm			2

Part I. Financial Information
Item 1. Financial Statements			3
Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations and Comprehensive Income			4
Condensed Consolidated Statements of Cash Flows			5
Consolidated Statements of Stockholders' Equity			6
Notes to the Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31

Part II. Other Information
Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 6. Exhibits			33

Signature			34

Forward Looking Statements

Unless otherwise indicated or the context otherwise requires, the terms "Delta," "we," "us" and "our" refer to Delta Air Lines, Inc. and its subsidiaries.

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to Delta are described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Form 10-K") and "Part II, Item 1A. Risk Factors" of this Form 10-Q, other than risks that could apply to any issuer or offering. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Delta Air Lines, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of September 30, 2024, the related condensed consolidated statements of operations and comprehensive income and consolidated statements of stockholders' equity for the three-month and nine-month periods ended September 30, 2024 and 2023, condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2024 and 2023, and the related notes (collectively referred to as the "condensed consolidated interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders' equity for the year then ended, and the related notes (not presented herein); and in our report dated February 12, 2024, we expressed an unqualified audit opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission (SEC) and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


			/s/ Ernst & Young LLP
Atlanta, Georgia
October 10, 2024


Delta Air Lines, Inc. \| September 2024 Form 10-Q						2

Financial Statements

DELTA AIR LINES, INC.

Consolidated Balance Sheets

(Unaudited)


(in millions, except share data)	September 30, 2024		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	3,969	$	2,741
Short-term investments	8		1,127
Accounts receivable, net of allowance for uncollectible accounts of $17 and $17	3,550		3,130
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $130 and $123	1,467		1,314
Prepaid expenses and other	2,068		1,957
Total current assets	11,062		10,269

Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $22,964 and $21,707	36,862		35,486
Operating lease right-of-use assets	6,686		7,004
Goodwill	9,753		9,753
Identifiable intangibles, net of accumulated amortization of $917 and $911	5,977		5,983
Equity investments	3,272		3,457

Other noncurrent assets	1,756		1,692
Total noncurrent assets	64,306		63,375
Total assets	$	75,368	$	73,644

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt and finance leases	$	3,324	$	2,983
Current maturities of operating leases	772		759
Air traffic liability	8,302		7,044
Accounts payable	4,545		4,446
Accrued salaries and related benefits	4,105		4,561
Loyalty program deferred revenue	4,122		3,908
Fuel card obligation	1,100		1,100
Other accrued liabilities	1,848		1,617
Total current liabilities	28,118		26,418

Noncurrent Liabilities:
Debt and finance leases	14,373		17,071

Pension, postretirement and related benefits	3,404		3,601
Loyalty program deferred revenue	4,630		4,512
Noncurrent operating leases	5,919		6,468
Deferred income taxes, net	1,675		908
Other noncurrent liabilities	3,603		3,561
Total noncurrent liabilities	33,604		36,121

Commitments and Contingencies

Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 654,596,578 and 654,671,194 shares issued	—		—
Additional paid-in capital	11,686		11,641
Retained earnings	7,940		5,650
Accumulated other comprehensive loss	(5,691)		(5,845)
Treasury stock, at cost, 9,315,357 and 11,224,246 shares	(289)		(341)
Total stockholders' equity	13,646		11,105
Total liabilities and stockholders' equity	$	75,368	$	73,644
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						3

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	2024		2023		2024		2023
Operating Revenue:
Passenger	$	13,107	$	13,119	$	38,079	$	36,735
Cargo	196		154		574		535
Other	2,374		2,215		7,431		6,555
Total operating revenue	15,677		15,488		46,084		43,825

Operating Expense:
Salaries and related costs	4,231		3,760		12,035		10,838
Aircraft fuel and related taxes	2,747		2,936		8,157		8,128
Ancillary businesses and refinery	1,250		1,128		4,083		3,427
Contracted services	1,069		1,004		3,134		3,009
Landing fees and other rents	832		679		2,347		1,880
Aircraft maintenance materials and outside repairs	627		661		1,990		1,860
Depreciation and amortization	643		594		1,878		1,731
Passenger commissions and other selling expenses	643		618		1,865		1,770
Regional carrier expense	600		546		1,731		1,664
Passenger service	463		449		1,339		1,307
Profit sharing	320		417		964		1,084
Aircraft rent	137		131		411		395
Pilot agreement and related expenses	—		—		—		864


Other	718		581		1,872		1,669
Total operating expense	14,280		13,504		41,806		39,626

Operating Income	1,397		1,984		4,278		4,199

Non-Operating Income/(Expense):
Interest expense, net	(173)		(196)		(567)		(627)

Gain/(loss) on investments, net	350		(206)		(73)		45
Loss on extinguishment of debt	—		(13)		(36)		(63)

Miscellaneous, net	(13)		(48)		(146)		(221)
Total non-operating income/(expense), net	164		(463)		(822)		(866)

Income Before Income Taxes	1,561		1,521		3,456		3,333

Income Tax Provision	(289)		(413)		(842)		(761)

Net Income	$	1,272	$	1,108	$	2,614	$	2,572

Basic Earnings Per Share	$	1.98	$	1.73	$	4.08	$	4.03
Diluted Earnings Per Share	$	1.97	$	1.72	$	4.04	$	4.00


Comprehensive Income	$	1,321	$	1,157	$	2,768	$	2,713

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						4

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(in millions)	2024		2023
Net Cash Provided by Operating Activities	$	6,131	$	5,919

Cash Flows from Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments	(2,944)		(2,560)
Ground property and equipment, including technology	(886)		(1,161)

Purchase of short-term investments	—		(2,312)
Redemption of short-term investments	1,130		3,488
Acquisition of strategic investments	—		(152)

Other, net	130		84
Net cash used in investing activities	(2,570)		(2,613)

Cash Flows from Financing Activities:



Payments on debt and finance lease obligations	(2,411)		(3,710)

Cash dividends	(225)		(64)

Other, net	(34)		(36)
Net cash used in financing activities	(2,670)		(3,810)

Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash Equivalents	891		(504)
Cash, cash equivalents and restricted cash equivalents at beginning of period	3,395		3,473
Cash, cash equivalents and restricted cash equivalents at end of period	$	4,286	$	2,969

Non-Cash Transactions:
Right-of-use assets acquired or modified under operating leases	$	217	$	443
Flight and ground equipment acquired or modified under finance leases	(17)		37
Operating leases converted to finance leases	—		53



The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
	September 30,
(in millions)	2024		2023
Current assets:
Cash and cash equivalents	$	3,969	$	2,835
Restricted cash included in prepaid expenses and other	97		134
Noncurrent assets:
Restricted cash included in other noncurrent assets	220		—
Total cash, cash equivalents and restricted cash equivalents	$	4,286	$	2,969

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						5

Financial Statements

DELTA AIR LINES, INC.

Consolidated Statements of Stockholders' Equity

(Unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2023	655	$	—	$	11,641	$	5,650	$	(5,845)	11	$	(341)	$	11,105
Net income	—	—		—		37		—		—	—		37
Dividends declared ($0.10 per share)	—	—		—		(65)		—		—	—		(65)
Other comprehensive income	—	—		—		—		52		—	—		52
Common stock issued for employee equity awards(1)	2	—		47		—		—		1	(25)		22

Balance at March 31, 2024	657	$	—	$	11,688	$	5,622	$	(5,793)	12	$	(366)	$	11,151
Net income	—	—		—		1,305		—		—	—		1,305
Dividends declared ($0.10 and $0.15 per share)	—	—		—		(162)		—		—	—		(162)
Other comprehensive income	—	—		—		—		53		—	—		53
Common stock issued for employee equity awards(1)	(2)	—		(41)		—		—		(3)	80		39

Balance at June 30, 2024	655	$	—	$	11,647	$	6,765	$	(5,740)	9	$	(286)	$	12,386
Net income	—	—		—		1,272		—		—	—		1,272
Dividends declared ($0.15 per share)	—	—		—		(97)		—		—	—		(97)
Other comprehensive income	—	—		—		—		49		—	—		49
Common stock issued for employee equity awards(1)	—	—		39		—		—		—	(3)		36


Balance at September 30, 2024	655	$	—	$	11,686	$	7,940	$	(5,691)	9	$	(289)	$	13,646

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $39.83, $50.04 and $43.27 in the March 2024 quarter, June 2024 quarter and September 2024 quarter, respectively.


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2022	652	$	—	$	11,526	$	1,170	$	(5,801)	11	$	(313)	$	6,582
Net loss	—	—		—		(363)		—		—	—		(363)

Other comprehensive income	—	—		—		—		47		—	—		47
Common stock issued for employee equity awards(1)	2	—		18		—		—		—	(24)		(6)

Balance at March 31, 2023	654	$	—	$	11,544	$	807	$	(5,754)	11	$	(337)	$	6,260
Net income	—	—		—		1,827		—		—	—		1,827
Dividends declared ($0.10 per share)	—	—		—		(65)		—		—	—		(65)
Other comprehensive income	—	—		—		—		45		—	—		45
Common stock issued for employee equity awards(1)	1	—		34		—		—		—	(1)		33


Balance at June 30, 2023	655	$	—	$	11,578	$	2,569	$	(5,709)	11	$	(338)	$	8,100
Net income	—	—		—		1,108		—		—	—		1,108
Dividends declared ($0.10 per share)	—	—		—		(64)		—		—	—		(64)
Other comprehensive income	—	—		—		—		49		—	—		49
Common stock issued for employee equity awards(1)	—	—		35		—		—		—	(2)		33


Balance at September 30, 2023	655	$	—	$	11,613	$	3,613	$	(5,660)	11	$	(340)	$	9,226

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $39.73, $36.76 and $45.34 in the March 2023 quarter, June 2023 quarter and September 2023 quarter, respectively.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						6

Notes to the Condensed Consolidated Financial Statements

DELTA AIR LINES, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2023.

Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented.

Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of operating results for the entire year.

We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.

NOTE 2. REVENUE RECOGNITION

Passenger Revenue



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2024		2023		2024		2023
Ticket	$	11,645	$	11,733	$	33,827	$	32,801
Loyalty travel awards	978		902		2,798		2,547
Travel-related services	484		484		1,454		1,387
Passenger revenue	$	13,107	$	13,119	$	38,079	$	36,735

Ticket

We recognized approximately $6.2 billion and $6.7 billion in passenger revenue during the nine months ended September 30, 2024 and 2023, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

Loyalty Travel Awards

Loyalty travel awards revenue is related to the redemption of mileage credits ("miles") for air travel. Our SkyMiles loyalty program allows customers to earn miles by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. Customers can also earn miles through participating companies, such as credit card, retail, ridesharing, car rental and hotel companies, who purchase miles from us. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the nine months ended September 30, 2024 and 2023, total cash sales from marketing agreements related to our loyalty program were $5.5 billion and $5.2 billion, respectively, which are allocated to travel and other performance obligations.

Current Activity of the Loyalty Program. Miles are combined in one homogeneous pool and are not separately identifiable. Therefore, revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period. The timing of mile redemptions can vary widely; however, the majority of miles have historically been redeemed within two years of being earned.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						7

Notes to the Condensed Consolidated Financial Statements

The table below presents the activity of the current and noncurrent loyalty program deferred revenue and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.


Loyalty program activity
(in millions)	2024		2023
Balance at January 1	$	8,420	$	7,882
Miles earned	3,303		3,164
Miles redeemed for air travel	(2,798)		(2,547)
Miles redeemed for non-air travel and other	(173)		(126)
Balance at September 30	$	8,752	$	8,373

Travel-Related Services

Travel-related services are primarily composed of services performed in conjunction with a passenger’s flight and include baggage fees, administrative fees and on-board sales.

Other Revenue



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2024		2023		2024		2023
Refinery	$	1,083	$	935	$	3,520	$	2,817
Loyalty program	820		791		2,451		2,291
Ancillary businesses	161		212		554		657
Miscellaneous	310		277		906		790
Other revenue	$	2,374	$	2,215	$	7,431	$	6,555

Refinery. This represents refinery sales to third parties. See Note 9, "Segments," for more information on revenue recognition within our refinery segment.

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, which are included within the total cash sales from marketing agreements discussed above. This also includes the redemption of miles for non-air travel and other awards.

Ancillary Businesses. This includes revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						8

Notes to the Condensed Consolidated Financial Statements

Revenue by Geographic Region

Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. A significant portion of the refinery segment's revenues typically consists of fuel sales to support the airline, which is eliminated in the Condensed Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our passenger and operating revenue by geographic region is summarized in the following tables:


Passenger revenue by geographic region

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2024		2023		2024		2023
Domestic	$	8,652	$	8,662	$	26,033	$	25,200
Atlantic	3,029		3,110		7,159		7,157
Latin America	779		788		3,008		2,846
Pacific	647		559		1,879		1,532
Total	$	13,107	$	13,119	$	38,079	$	36,735


Operating revenue by geographic region

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2024		2023		2024		2023
Domestic	$	10,609	$	10,461	$	32,216	$	30,607
Atlantic	3,418		3,497		8,209		8,223
Latin America	889		891		3,432		3,208
Pacific	761		639		2,227		1,787
Total	$	15,677	$	15,488	$	46,084	$	43,825

NOTE 3. FAIR VALUE MEASUREMENTS

Assets/(Liabilities) Measured at Fair Value on a Recurring Basis


(in millions)	September 30, 2024		Level 1		Level 2		Level 3
Cash equivalents	$	2,718	$	2,718	$	—	$	—
Restricted cash equivalents	316		316		—		—




Short-term investments - Other fixed income securities	8		—		8		—
Long-term investments and related	2,723		2,460		149		114
Fuel hedge contracts	1		—		1		—


(in millions)	December 31, 2023		Level 1		Level 2		Level 3
Cash equivalents	$	1,545	$	1,545	$	—	$	—
Restricted cash equivalents	653		653		—		—
Short-term investments
U.S. Government securities	859		204		655		—
Corporate obligations	218		—		218		—
Other fixed income securities	50		—		50		—
Long-term investments and related	2,867		2,614		134		119
Fuel hedge contracts	5		—		5		—


Delta Air Lines, Inc. \| September 2024 Form 10-Q						9

Notes to the Condensed Consolidated Financial Statements

Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit. Restricted cash equivalents primarily relate to proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport as well as certain self-insurance obligations and airport commitments. Restricted cash equivalents are recorded in other noncurrent assets and prepaid expenses and other on our Consolidated Balance Sheet ("balance sheet"). The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments. The fair values of our short-term investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information. These investments are primarily expected to mature in one year or less. Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs.

Long-Term Investments and Related. Our long-term investments measured at fair value primarily consist of equity investments, which are valued based on market prices or other observable transactions and inputs, and are recorded in equity investments on our balance sheet. Our equity investments in private companies are classified as Level 3 in the fair value hierarchy as their equity is not traded on a public exchange and our valuations incorporate certain unobservable inputs, including non-public equity issuances. Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values. See Note 4, "Investments," for further information on our equity investments.

Fuel Hedge Contracts. Our derivative contracts to hedge the financial risk from changing fuel prices are related to inventory at our wholly-owned subsidiary, Monroe Energy, LLC ("Monroe"). We recognized gains of $89 million and $9 million on our fuel hedge contracts in aircraft fuel and related taxes on our Condensed Consolidated Statements of Operations and Comprehensive Income ("income statement") for the three and nine months ended September 30, 2024, respectively, compared to losses of $140 million and $96 million for the three and nine months ended September 30, 2023, respectively. The gains recognized during the first nine months of 2024 were composed of $4 million of mark-to-market losses and $13 million of settlement gains on contracts. Gains and losses on settled contracts are reflected within Monroe's operating results. See Note 9, "Segments," for further information on our refinery segment.

NOTE 4. INVESTMENTS


Equity investments ownership interest and carrying value
	Accounting Treatment	Ownership Interest				Carrying Value
(in millions)		September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Air France-KLM	Fair Value	3	%	3	%	$	74	$	110
China Eastern	Fair Value	2	%	2	%	143		134

Grupo Aeroméxico	Equity Method	20	%	20	%	426		421
Hanjin KAL	Fair Value(1)	15	%	15	%	624		561
LATAM	Fair Value	10	%	10	%	782		658
Unifi Aviation	Equity Method	49	%	49	%	139		162
Wheels Up	Fair Value(2)	38	%	38	%	637		903
Other investments	Various					447		508
Equity investments						$	3,272	$	3,457

(1)At September 30, 2024, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.

(2)Our voting rights with respect to Wheels Up are capped at 29.9%.

Wheels Up. During the September 2024 quarter, we and the other lead investors agreed to extend the contractual transfer restrictions on our investments in Wheels Up until September 20, 2025. Following the expiration of this restriction, our equity investment in Wheels Up will continue to be subject to certain, more limited transfer restrictions.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						10

Notes to the Condensed Consolidated Financial Statements

NOTE 5. DEBT


Summary of outstanding debt by category

(in millions)	Maturity Dates			Interest Rate(s) Per Annum at September 30, 2024			September 30, 2024		December 31, 2023
Unsecured Payroll Support Program Loans	2030	to	2031	1.00%			$	3,496	$	3,496
Unsecured notes	2024	to	2029	2.90%	to	7.38%	2,575		2,590
Financing arrangements secured by SkyMiles assets:
SkyMiles Notes(1)	2024	to	2028	4.50%	and	4.75%	4,107		4,518
SkyMiles Term Loan(1)(2)	2024	to	2027	9.03%			850		1,772
NYTDC Special Facilities Revenue Bonds(1)	2025	to	2045	4.00%	to	6.00%	3,591		3,656
Financing arrangements secured by aircraft:
Certificates(1)	2024	to	2028	2.00%	to	8.00%	1,033		1,591
Notes(1)(2)	2024	to	2033	7.20%	to	7.52%	89		165
Financing arrangements secured by slots, gates and/or routes:
Senior Secured Notes	2025			7.00%			812		838
Other financings(1)(2)	2024	to	2030	2.51%	to	5.00%	66		67
Corporate Revolving Credit Facility(2)	2026	to	2028	Undrawn			—		—
Other revolving credit facilities(2)	2025	to	2026	Undrawn			—		—
Total secured and unsecured debt							$	16,619	$	18,693
Unamortized (discount)/premium and debt issue cost, net and other							(38)		(83)
Total debt							$	16,581	$	18,610
Less: current maturities							(2,700)		(2,625)
Total long-term debt							$	13,881	$	15,985

(1)Due in installments during the years shown above.

(2)Certain financings are comprised of variable rate debt. All variable rates are equal to SOFR (generally subject to a floor) or another index rate, plus a specified margin.

Availability Under Revolving Credit Facilities

As of September 30, 2024, we had approximately $2.9 billion undrawn and available under our revolving credit facilities.

Early Settlement of Outstanding Notes

During the nine months ended September 30, 2024, through early principal repayments and open market repurchases, we extinguished an aggregate principal amount of $744 million related to a portion of the SkyMiles Term Loan and various secured and unsecured notes. These payments resulted in a $36 million loss on extinguishment of debt recorded in non-operating expense in our income statement.

Corporate Revolving Credit Facility

In July 2024, Fitch upgraded Delta's credit rating to BBB-, an investment grade metric, which satisfied the collateral release conditions under the Corporate Revolving Credit Facility. As a result, the liens on collateral, including our Pacific route authorities and certain related other assets, were released in the September 2024 quarter. Additionally, the minimum collateral coverage ratio and minimum liquidity covenants were replaced by minimum fixed charge coverage ratio and minimum asset coverage ratio covenants.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						11

Notes to the Condensed Consolidated Financial Statements

Fair Value of Debt

Market risk associated with our fixed- and variable-rate debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt shown below is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Debt is primarily classified as Level 1 or 2 within the fair value hierarchy.


Fair value of outstanding debt
(in millions)	September 30, 2024		December 31, 2023
Net carrying amount	$	16,581	$	18,610
Fair value	$	16,600	$	18,400

Covenants

Our debt agreements contain various affirmative, negative and financial covenants. We were in compliance with the covenants in our debt agreements at September 30, 2024.

NOTE 6. EMPLOYEE BENEFIT PLANS

We sponsor defined benefit and defined contribution pension plans, healthcare plans and disability and survivorship plans for eligible employees and retirees and their eligible family members. The net periodic cost table below includes our domestic defined benefit pension plans and postretirement healthcare plans.


Employee benefit plans net periodic cost
	Pension Benefits				Other Postretirement and Postemployment Benefits
(in millions)	2024		2023		2024		2023
Three Months Ended September 30,
Service cost	$	—	$	—	$	23	$	18
Interest cost	201		213		45		50
Expected return on plan assets	(263)		(264)		(1)		—
Amortization of prior service credit	—		—		(1)		(1)
Recognized net actuarial loss	62		60		5		3


Net periodic cost	$	—	$	9	$	71	$	70

Nine Months Ended September 30,
Service cost	$	—	$	—	$	69	$	54
Interest cost	603		638		136		150
Expected return on plan assets	(789)		(791)		(2)		(1)
Amortization of prior service credit	—		—		(3)		(4)
Recognized net actuarial loss	186		179		14		10


Net periodic cost	$	—	$	26	$	214	$	209

Service cost is recorded in salaries and related costs in our income statement, while all other components are recorded within miscellaneous, net under non-operating expense.

We also sponsor defined benefit pension plans for eligible employees in certain foreign countries and a market based cash balance plan for eligible pilots, which have immaterial obligations. These plans are not included in the net periodic cost table above.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						12

Notes to the Condensed Consolidated Financial Statements

NOTE 7. COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Commitments

Our future aircraft purchase commitments totaled approximately $19.0 billion at September 30, 2024.


Aircraft purchase commitments(1)
(in millions)	Total
Three months ending December 31, 2024	$	940
2025	3,250
2026	4,930
2027	4,770
2028	3,510
Thereafter	1,630
Total	$	19,030

(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and remains uncertain due to supply chain, manufacturing and regulatory constraints.

Our future aircraft purchase commitments included the following aircraft at September 30, 2024:


Aircraft purchase commitments by fleet type
Aircraft Type			Purchase Commitments
A220-300			74
A321-200neo			91
A330-900neo			9
A350-900			11
A350-1000			20
B-737-10			100
Total			305

Aircraft Orders

In January 2024, we entered into a purchase agreement with Airbus for 20 A350-1000 aircraft, with an option to purchase an additional 20 widebody aircraft. Deliveries of these aircraft are scheduled to begin in 2026.

In the September 2024 quarter we amended our purchase agreement with Boeing and received an updated delivery schedule for our Boeing 737-10 orders. We now expect to take delivery of our first 20 aircraft in 2026 and 80 aircraft thereafter.

Legal Contingencies

We are involved in various legal proceedings related to employment practices, environmental issues, commercial disputes, antitrust and other regulatory matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, we believe that the resolution of current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						13

Notes to the Condensed Consolidated Financial Statements

NOTE 8. ACCUMULATED OTHER COMPREHENSIVE LOSS


Components of accumulated other comprehensive loss
(in millions)	Pension and Other Benefit Liabilities		Other		Tax Effect		Total
Balance at January 1, 2024	$	(6,681)	$	40	$	796	$	(5,845)
Changes in value	—		3		—		3
Reclassifications into earnings(1)	197		—		(46)		151
Balance at September 30, 2024	$	(6,484)	$	43	$	750	$	(5,691)


Balance at January 1, 2023	$	(6,624)	$	41	$	782	$	(5,801)
Changes in value	—		(1)		—		(1)
Reclassifications into earnings(1)	185		—		(43)		142
Balance at September 30, 2023	$	(6,439)	$	40	$	739	$	(5,660)

(1)Amounts reclassified from accumulated other comprehensive loss for pension and other benefit liabilities are recorded in miscellaneous, net in non-operating expense in our income statement.

NOTE 9. SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and from jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations.

Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.


Financial information by segment
(in millions)	Airline		Refinery			Intersegment Sales/Other			Consolidated
Three Months Ended September 30, 2024
Operating revenue	$	14,594	$	1,912		$	(829)	(1)	$	15,677



Depreciation and amortization	643		29			(29)		(2)	643
Operating income/(loss)	1,430		(33)		(2)	—			1,397
Interest expense/(income), net	173		(8)			8			173

Total assets, end of period	72,954		2,490			(76)			75,368

Capital expenditures	1,312		16			—			1,328

Three Months Ended September 30, 2023
Operating revenue	$	14,553	$	1,886		$	(951)	(1)	$	15,488



Depreciation and amortization	594		23			(23)		(2)	594
Operating income	1,865		119		(2)	—			1,984
Interest expense, net	196		6			(6)			196

Total assets, end of period	69,851		3,397			(1)			73,247

Capital expenditures	1,201		68			—			1,269


Delta Air Lines, Inc. \| September 2024 Form 10-Q						14

Notes to the Condensed Consolidated Financial Statements



(in millions)	Airline		Refinery			Intersegment Sales/Other			Consolidated
Nine Months Ended September 30, 2024
Operating revenue	$	42,564	$	6,011		$	(2,491)	(1)	$	46,084
Depreciation and amortization	1,878		86			(86)		(2)	1,878
Operating income	4,202		76		(2)	—			4,278
Interest expense, net	567		3			(3)			567
Capital expenditures	3,783		47			—			3,830

Nine Months Ended September 30, 2023
Operating revenue	$	41,008	$	6,274		$	(3,457)	(1)	$	43,825
Depreciation and amortization	1,731		69			(69)		(2)	1,731
Operating income	3,814		385		(2)	—			4,199
Interest expense, net	627		14			(14)			627
Capital expenditures	3,594		127			—			3,721

(1)See table below for detail of the intersegment operating revenue amounts.

(2)Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.


Operating revenue intersegment sales/other
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2024		2023		2024		2023
Sales to airline segment(1)	$	(369)	$	(385)	$	(1,147)	$	(1,346)
Exchanged products(2)	(349)		(519)		(1,147)		(1,848)
Sales of refined products	(111)		(47)		(197)		(263)
Total operating revenue intersegment sales/other	$	(829)	$	(951)	$	(2,491)	$	(3,457)

(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.

(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

NOTE 10. EARNINGS PER SHARE

We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based instruments, including stock options, restricted stock awards and warrants. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted earnings per share:


Basic and diluted earnings per share
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	2024		2023		2024		2023
Net income	$	1,272	$	1,108	$	2,614	$	2,572

Basic weighted average shares outstanding	641		639		640		639
Dilutive effect of share-based instruments	6		5		7		4
Diluted weighted average shares outstanding	647		644		647		643

Basic earnings per share	$	1.98	$	1.73	$	4.08	$	4.03
Diluted earnings per share	$	1.97	$	1.72	$	4.04	$	4.00


Delta Air Lines, Inc. \| September 2024 Form 10-Q						15

Item 2. MD&A

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes included in our 2023 Form 10-K.

September 2024 Quarter Financial Highlights

Our operating income for the September 2024 quarter was $1.4 billion, a decrease of $587 million compared to the September 2023 quarter.

Revenue. Compared to the September 2023 quarter, our total revenue increased $189 million, or 1%, due to increased revenue related to refinery sales to third parties and a 4% increase in capacity. Passenger revenue was comparable to the September 2023 quarter on an increase in revenue for premium products and loyalty travel awards, offset by a decrease in main cabin ticket revenue. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the September 2024 quarter by $41 million compared to the September 2023 quarter.

In July 2024, our operations were significantly disrupted by the CrowdStrike-caused outage. We estimate that this disruption led to a direct revenue impact of approximately $380 million related to approximately 7,000 flight cancellations over five days, which reduced our expected year-over-year capacity growth in the quarter by approximately 1.5 percentage points.

Operating Expense. Total operating expense in the September 2024 quarter increased $776 million, or 6%, compared to the September 2023 quarter, primarily due to costs associated with the 4% increase in capacity, higher employee costs from increased wages, increased landing fees and other rents and costs associated with the CrowdStrike-caused outage. The outage and operational recovery resulted in approximately $170 million of additional operating expenses primarily due to customer expense reimbursements and crew-related costs. Fuel expense was approximately $50 million lower than it would have been as a result of the 7,000 flight cancellations over the five-day period. Total operating expense, adjusted (a non-GAAP financial measure, which primarily excludes expenses related to refinery sales to third parties) in the September 2024 quarter increased $631 million, or 5%, compared to the September 2023 quarter.

Our total operating cost per available seat mile ("CASM") increased 2% compared to the September 2023 quarter, primarily for the same reasons as the increase in total operating expense. Non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 5.7%.

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity") as of September 30, 2024 was $6.9 billion.

During the September 2024 quarter, operating activities generated $1.3 billion, primarily from ticket sales. Total cash sales to American Express were $1.8 billion in the September 2024 quarter, an increase of approximately 6% compared to the September 2023 quarter.

Cash flows used in investing activities during the quarter totaled $1.1 billion primarily from capital expenditures. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $95 million in the September 2024 quarter. Additionally, we had cash outflows of $263 million related to repayments of our debt and finance leases.

The non-GAAP financial measures referenced above for total revenue, adjusted, operating expense, adjusted, CASM-Ex and free cash flow are defined and reconciled in "Supplemental Information" below.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						16

Item 2. MD&A - Results of Operations

Results of Operations - Three Months Ended September 30, 2024 and 2023

Total Operating Revenue


	Three Months Ended September 30,						Increase (Decrease)	% Increase (Decrease)
(in millions)(1)	2024			2023
Ticket - Main cabin	$	6,309		$	6,620			$	(311)		(5)	%
Ticket - Premium products	5,336			5,113				223			4	%
Loyalty travel awards	978			902				76			8	%
Travel-related services	484			484				—			—	%
Passenger revenue	$	13,107		$	13,119			$	(12)		—	%
Cargo	196			154				42			27	%
Other	2,374			2,215				159			7	%
Total operating revenue	$	15,677		$	15,488			$	189		1	%

TRASM (cents)	20.58		¢	21.15		¢		(0.57)		¢	(3)	%
Third-party refinery sales	(1.42)			(1.28)				(0.14)			11	%

TRASM, adjusted(2)	19.16		¢	19.87		¢		(0.71)		¢	(4)	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)Total Revenue per available seat mile ("TRASM"), adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Compared to the September 2023 quarter, total revenue increased $189 million, or 1%, due to increased revenue related to refinery sales to third parties, loyalty travel awards and a 4% increase in capacity resulting from strength in travel demand, particularly for our premium products, partially offset by a decrease in main cabin ticket revenue.

See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Passenger Revenue by Geographic Region


			Increase (Decrease) vs. Three Months Ended September 30, 2023
(in millions)	Three Months Ended September 30, 2024		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	$	8,652	—	%	2	%	3	%	(2)	%	(3)	%	(1)	pt
Atlantic	3,029		(3)	%	—	%	(1)	%	(3)	%	(2)	%	1	pt
Latin America	779		(1)	%	6	%	6	%	(6)	%	(6)	%	—	pts
Pacific	647		16	%	33	%	38	%	(13)	%	(16)	%	(3)	pts
Total	$	13,107	—	%	3	%	4	%	(3)	%	(4)	%	(1)	pt

Domestic

Domestic passenger revenue was consistent between the September 2024 quarter and the September 2023 quarter on a 3% increase in capacity and a slight decrease in load factor. We experienced strong revenue results across the domestic network, with premium revenue growing more than main cabin revenue compared to the prior year period.

International

International passenger revenue for the September 2024 quarter was consistent with the September 2023 quarter. The Atlantic region benefited from improved demand for travel to Paris following the summer Olympics. Our Latin America revenue reflects the continued maturation of our joint venture with LATAM in South America, while network restoration continues in the Pacific, with double-digit revenue growth driven by travel to South Korea and Japan.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						17

Item 2. MD&A - Results of Operations

Other Revenue


	Three Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)
(in millions)	2024		2023
Refinery	$	1,083	$	935		$	148	16	%
Loyalty program	820		791			29		4	%
Ancillary businesses	161		212			(51)		(24)	%
Miscellaneous	310		277			33		12	%
Other revenue	$	2,374	$	2,215		$	159	7	%

Refinery. Refinery sales to third parties increased $148 million compared to the September 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, as well as redemption of miles for non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. Revenues from our relationship with American Express increased compared to the September 2023 quarter due to increased co-brand card spend and card account acquisitions.

Ancillary Businesses. This includes revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations. The decrease in revenues compared to the September 2023 quarter was driven by lower aircraft maintenance services revenue during the September 2024 quarter.

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, codeshare agreements and certain other commercial relationships. The increase in revenues compared to the September 2023 quarter was primarily driven by codeshare agreements and other commercial relationships.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						18

Item 2. MD&A - Results of Operations

Operating Expense


	Three Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)
(in millions)	2024		2023
Salaries and related costs	$	4,231	$	3,760		$	471	13	%
Aircraft fuel and related taxes	2,747		2,936			(189)		(6)	%
Ancillary businesses and refinery	1,250		1,128			122		11	%
Contracted services	1,069		1,004			65		6	%
Landing fees and other rents	832		679			153		23	%
Aircraft maintenance materials and outside repairs	627		661			(34)		(5)	%
Depreciation and amortization	643		594			49		8	%
Passenger commissions and other selling expenses	643		618			25		4	%
Regional carrier expense	600		546			54		10	%
Passenger service	463		449			14		3	%
Profit sharing	320		417			(97)		(23)	%
Aircraft rent	137		131			6		5	%




Other	718		581			137		24	%
Total operating expense	$	14,280	$	13,504		$	776	6	%

Salaries and Related Costs. The increase in salaries and related costs primarily resulted from the implementation of base pay increases for eligible employees of 5% effective June 1, 2024 and for Delta pilots on January 1, 2024. In June 2024 we also increased our minimum starting wage for domestic mainline employees to $19 per hour. Salaries and related costs also increased due to additional crew-related costs resulting from the CrowdStrike-caused outage.

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes decreased $189 million compared to the September 2023 quarter primarily due to a 13% decrease in the market price of jet fuel offset by a 3% increase in consumption on a 4% increase in capacity. Fuel expense was also approximately $50 million lower than it would have been as a result of the 7,000 flight cancellations over the five-day period following the CrowdStrike-caused outage. We continue to expect that fuel consumption for the remainder of 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet. The refinery generated an operating loss resulting in incremental cost of three cents per gallon compared to a benefit of 11 cents per gallon in the September 2023 quarter. We expect jet fuel prices to remain volatile throughout the remainder of 2024 and into 2025.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon
								Average Price Per Gallon
	Three Months Ended September 30,				Increase (Decrease)	Three Months Ended September 30,				Increase (Decrease)
(in millions, except per gallon data)	2024		2023					2024				2023
Fuel purchase cost(1)	$	2,738	$	3,076		$	(338)	$	2.50	$	2.89		$	(0.39)

Fuel hedge impact	(24)		(21)			(3)		(0.02)		(0.02)			—
Refinery segment impact	33		(119)			152		0.03		(0.11)			0.14
Total fuel expense	$	2,747	$	2,936		$	(189)	$	2.51	$	2.76		$	(0.25)

(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. Refinery sales to third parties increased $148 million compared to the September 2023 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Landing Fees and Other Rents. The increase in landing fees and other rents primarily resulted from higher rates charged by airports following extensive redevelopment projects at numerous facilities and more flights compared to the September 2023 quarter that contributed to our increased capacity.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						19

Item 2. MD&A - Results of Operations

Profit Sharing. Profit sharing decreased by $97 million compared to the September 2023 quarter due to lower projected profit for the year. Our profit sharing program pays 10% to all eligible employees for the first $2.5 billion of annual profit, as defined by the terms of the program, and 20% of annual profit above $2.5 billion.

Other. The increase in other is primarily due to the impact of service recovery costs including customer expense reimbursements from the CrowdStrike-caused outage and higher volume-related expenses associated with increased capacity, such as flight crew and other employee travel and incidental costs.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						20

Item 2. MD&A - Results of Operations

Results of Operations - Nine Months Ended September 30, 2024 and 2023

Total Operating Revenue


	Nine Months Ended September 30,						Increase (Decrease)	% Increase (Decrease)
(in millions)(1)	2024			2023
Ticket - Main cabin	$	18,450		$	18,538			$	(88)		—	%
Ticket - Premium products	15,377			14,263				1,114			8	%
Loyalty travel awards	2,798			2,547				251			10	%
Travel-related services	1,454			1,387				67			5	%
Passenger revenue	$	38,079		$	36,735			$	1,344		4	%
Cargo	574			535				39			7	%
Other	7,431			6,555				876			13	%
Total operating revenue	$	46,084		$	43,825			$	2,259		5	%

TRASM (cents)	21.30		¢	21.53		¢		(0.23)		¢	(1)	%
Third-party refinery sales	(1.63)			(1.38)				(0.25)			18	%

TRASM, adjusted(2)	19.67		¢	20.14		¢		(0.47)		¢	(2)	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)TRASM, adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Unless otherwise discussed below, the changes in total revenue line items, as well as the underlying reasons for these changes, compared to the nine months ended September 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended September 30, 2024 and 2023.

Compared to the nine months ended September 30, 2023, total revenue increased $2.3 billion, or 5%, due primarily to a 6% increase in capacity resulting from strength in travel demand, particularly for our premium products and increased revenue related to refinery sales to third parties, partially offset by a decrease in main cabin ticket revenue.

Passenger Revenue by Geographic Region


			Increase (Decrease) vs. Nine Months Ended September 30, 2023
(in millions)	Nine Months Ended September 30, 2024		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	$	26,033	3	%	5	%	4	%	(1)	%	(1)	%	—	pts
Atlantic	7,159		—	%	1	%	1	%	(1)	%	(1)	%	—	pts
Latin America	3,008		6	%	17	%	18	%	(10)	%	(10)	%	—	pts
Pacific	1,879		23	%	32	%	34	%	(7)	%	(9)	%	(2)	pts
Total	$	38,079	4	%	6	%	6	%	(3)	%	(2)	%	—	pts

Domestic passenger revenue for the nine months ended September 30, 2024 increased on higher capacity compared to the nine months ended September 30, 2023. International passenger revenue for the nine months ended September 30, 2024 increased 4% on 10% higher capacity compared to the nine months ended September 30, 2023 due to strong demand for international travel, particularly to leisure destinations. The Pacific and Latin America regions accounted for the majority of international capacity growth on continued network restoration in the Pacific and the continued maturation of our joint venture with LATAM in South America.

Other Revenue


	Nine Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)
(in millions)	2024		2023
Refinery	$	3,520	$	2,817		$	703	25	%
Loyalty program	2,451		2,291			160		7	%
Ancillary businesses	554		657			(103)		(16)	%
Miscellaneous	906		790			116		15	%
Other revenue	$	7,431	$	6,555		$	876	13	%


Delta Air Lines, Inc. \| September 2024 Form 10-Q						21

Item 2. MD&A - Results of Operations

Operating Expense


	Nine Months Ended September 30,				Increase (Decrease)	% Increase (Decrease)(1)
(in millions)	2024		2023
Salaries and related costs	$	12,035	$	10,838		$	1,197	11	%
Aircraft fuel and related taxes	8,157		8,128			29		—	%
Ancillary businesses and refinery	4,083		3,427			656		19	%
Contracted services	3,134		3,009			125		4	%
Landing fees and other rents	2,347		1,880			467		25	%
Aircraft maintenance materials and outside repairs	1,990		1,860			130		7	%
Depreciation and amortization	1,878		1,731			147		8	%
Passenger commissions and other selling expenses	1,865		1,770			95		5	%
Regional carrier expense	1,731		1,664			67		4	%
Passenger service	1,339		1,307			32		2	%
Profit sharing	964		1,084			(120)		(11)	%
Aircraft rent	411		395			16		4	%
Pilot agreement and related expenses	—		864			(864)		NM


Other	1,872		1,669			203		12	%
Total operating expense	$	41,806	$	39,626		$	2,180	6	%

(1)Certain variances are labeled as not meaningful ("NM") throughout management's discussion and analysis.

Unless otherwise discussed below, the changes in operating expense line items, as well as the underlying reasons for these changes, compared to the nine months ended September 30, 2023 are consistent with the discussion above under Results of Operations - Three Months Ended September 30, 2024 and 2023.

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $29 million compared to the nine months ended September 30, 2023 due to a 5% increase in consumption on a 6% increase in capacity partially offset by an 8% decrease in the market price per gallon of jet fuel. The refinery also provided a benefit of two cents per gallon compared to a benefit of 13 cents per gallon in the nine months ended September 30, 2023.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon
								Average Price Per Gallon
	Nine Months Ended September 30,				Increase (Decrease)	Nine Months Ended September 30,				Increase (Decrease)
(in millions, except per gallon data)	2024		2023					2024				2023
Fuel purchase cost(1)	$	8,229	$	8,572		$	(343)	$	2.66	$	2.91		$	(0.25)

Fuel hedge impact	4		(59)			63		—		(0.02)			0.02
Refinery segment impact	(76)		(385)			309		(0.02)		(0.13)			0.11
Total fuel expense	$	8,157	$	8,128		$	29	$	2.64	$	2.76		$	(0.12)

(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

Pilot Agreement and Related Expenses. In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%. The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						22

Item 2. MD&A - Non-Operating Results

Non-Operating Results


	Three Months Ended September 30,				Favorable (Unfavorable)		Nine Months Ended September 30,				Favorable (Unfavorable)
(in millions)	2024		2023				2024		2023
Interest expense, net	$	(173)	$	(196)	$	23	$	(567)	$	(627)	$	60

Gain/(loss) on investments, net	350		(206)		556		(73)		45		(118)
Loss on extinguishment of debt	—		(13)		13		(36)		(63)		27

Miscellaneous, net	(13)		(48)		35		(146)		(221)		75
Total non-operating expense, net	$	164	$	(463)	$	627	$	(822)	$	(866)	$	44

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2023, we made payments of approximately $4.1 billion related to our debt and finance lease obligations. We have continued to pay down our debt during the nine months ended September 30, 2024 with $2.4 billion of payments on debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

Gain/(loss) on investments, net. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in certain companies, particularly those without publicly-traded shares. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity investments measured at fair value on a recurring basis.

Loss on extinguishment of debt. Loss on extinguishment of debt reflects the losses incurred in the early repayment of certain loans and notes.

Miscellaneous, net. Miscellaneous, net primarily includes employee benefit plans net periodic cost, charitable contributions, our share of our equity method investments' results and foreign exchange gains/(losses).

Income Taxes

We project our annual effective tax rate for 2024 will be between 24% and 26%. In certain periods, we may have adjustments to our net deferred tax liabilities as a result of changes in prior year estimates, mark-to-market adjustments on our equity investments and tax laws enacted during the period, which will impact the effective tax rate for that period.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						23

Item 2. MD&A - Refinery Segment

Refinery Segment

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery typically provides approximately 200,000 barrels per day, or approximately 75% of our consumption, for use in our airline operations. The refinery regularly optimizes its sales and exchange activities based on market conditions. The refinery generated lower operating income in the nine months ended September 30, 2024 compared to operating income in the nine months ended September 30, 2023, primarily as a result of lower pricing.

For more information regarding the refinery's results, see Note 9 of the Notes to the Condensed Consolidated Financial Statements.


Refinery segment financial information
	Three Months Ended September 30,				Increase (Decrease)		Nine Months Ended September 30,				Increase (Decrease)
(in millions, except per gallon data)	2024		2023				2024		2023
Exchanged products	$	349	$	519	$	(170)	$	1,147	$	1,848	$	(701)
Sales of refined products	111		47		64		197		263		(66)
Sales to airline segment	369		385		(16)		1,147		1,346		(199)
Third party refinery sales	1,083		935		148		3,520		2,817		703
Operating revenue	$	1,912	$	1,886	$	26	$	6,011	$	6,274	$	(263)

Operating (loss)/income	$	(33)	$	119	$	(152)	$	76	$	385	$	(309)
Refinery segment impact on airline average price per fuel gallon	$	0.03	$	(0.11)	$	0.14	$	(0.02)	$	(0.13)	$	0.11

Operating Statistics


	Three Months Ended September 30,						% Increase (Decrease)			Nine Months Ended September 30,		% Increase (Decrease)
Consolidated(1)	2024			2023						2024	2023
Revenue passenger miles (in millions) ("RPM")	66,310			64,095				3	%			185,757			174,586			6	%
Available seat miles (in millions) ("ASM")	76,162			73,226				4	%			216,360			203,571			6	%
Passenger mile yield	19.77		¢	20.47		¢		(3)	%			20.50		¢	21.04		¢	(3)	%
Passenger revenue per available seat mile ("PRASM")	17.21		¢	17.92		¢		(4)	%			17.60		¢	18.05		¢	(2)	%
Total revenue per available seat mile ("TRASM")	20.58		¢	21.15		¢		(3)	%			21.30		¢	21.53		¢	(1)	%
TRASM, adjusted(2)	19.16		¢	19.87		¢		(3.6)	%			19.67		¢	20.14		¢	(2)	%
Cost per available seat mile ("CASM")	18.75		¢	18.44		¢		2	%			19.32		¢	19.47		¢	(1)	%
CASM-Ex(2)	13.30		¢	12.59		¢		5.7	%			13.48		¢	13.13		¢	3	%

Passenger load factor	87		%	88		%		(1)	pt			86		%	86		%	—	pts
Fuel gallons consumed (in millions)	1,096			1,062				3	%			3,093			2,947			5	%
Average price per fuel gallon(3)	$	2.51		$	2.76			(9)	%			$	2.64		$	2.76		(4)	%
Average price per fuel gallon, adjusted(2)(3)	$	2.53		$	2.78			(9)	%			$	2.64		$	2.78		(5)	%

(1)Includes the operations of our regional carriers under capacity purchase agreements.

(2)Non-GAAP financial measures defined and reconciled to TRASM, CASM and average fuel price per gallon, respectively, in "Supplemental Information" below.

(3)Includes the impact of fuel hedge activity and refinery segment results.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						24

Item 2. MD&A - Fleet Information

Fleet Information

Our operating aircraft fleet, purchase commitments and options at September 30, 2024 are summarized in the following table.


Mainline aircraft information by fleet type
	Current Fleet(1)					Commitments
Fleet Type	Owned	Finance Lease	Operating Lease	Total	Average Age (Years)	Purchase	Options
A220-100	45	—	—	45	4.8
A220-300	26	—	—	26	2.1	74
A319-100	57	—	—	57	22.6
A320-200	57	—	—	57	28.8
A321-200	70	15	42	127	5.8
A321-200neo	64	—	—	64	1.3	91	70
A330-200	11	—	—	11	19.5
A330-300	28	—	3	31	15.7
A330-900neo	23	2	5	30	2.5	9	10
A350-900	22	—	11	33	5.0	11	10
A350-1000	—	—	—	—	—	20
B-717-200	10	70	—	80	23.0
B-737-800	73	4	—	77	23.0
B-737-900ER	114	—	49	163	8.7
B-737-10	—	—	—	—	—	100	30
B-757-200	93	—	—	93	26.8
B-757-300	16	—	—	16	21.6
B-767-300ER	41	—	—	41	28.2
B-767-400ER	21	—	—	21	23.7
Total	771	91	110	972	14.9	305	120

(1)Excludes certain aircraft we own or lease that are operated by regional carriers on our behalf shown in the table below.

The table below summarizes the aircraft operated by regional carriers on our behalf at September 30, 2024.


Regional aircraft information by fleet type and carrier
	Fleet Type(1)(2)
Carrier	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total
Endeavor Air, Inc.(3)	9	121	—	—	130
SkyWest Airlines, Inc.	8	36	—	86	130
Republic Airways, Inc.	—	—	11	46	57
Total	17	157	11	132	317

(1)We own 194 and have operating leases for two of these regional aircraft. The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.

(2)Excluded from the total operating count above are nine CRJ-700 and two CRJ-900 aircraft which are owned and temporarily parked as of September 30, 2024.

(3)Endeavor Air, Inc. is a wholly owned subsidiary of Delta.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						25

Item 2. MD&A - Financial Condition and Liquidity

Financial Condition and Liquidity

As of September 30, 2024, we had $6.9 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities. We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Undrawn Lines of Credit. As of September 30, 2024, we had approximately $2.9 billion undrawn and available under our revolving credit facilities.

Sources and Uses of Liquidity

Operating Activities

We generated cash flows from operations of $6.1 billion and $5.9 billion in the nine months ended September 30, 2024 and 2023, respectively. We expect to continue generating positive cash flows from operations during the remainder of 2024.

Our operating cash flow is impacted by the following factors:

Seasonality of Advance Ticket Sales. We sell tickets for air travel in advance of the customer's travel date. When we receive a cash payment at the time of sale, we record the cash received on advance sales as deferred revenue in air traffic liability. The air traffic liability typically increases during the winter and spring months as advance ticket sales grow prior to the summer peak travel season and decreases during the summer and fall months.

Fuel. Fuel expense represented approximately 20% and 21% of our total operating expense for the nine months ended September 30, 2024 and 2023, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. For example, the market price for jet fuel was 13% lower in the September 2024 quarter compared to the September 2023 quarter after it was 5% higher in the June 2024 quarter compared to the June 2023 quarter. Fuel consumption was higher during the three and nine months ended September 30, 2024 compared to the prior year periods due to the increase in capacity. We continue to expect that fuel consumption for the remainder of 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet.

Profit Sharing. We paid $1.4 billion in profit sharing payments in February 2024 related to our 2023 pre-tax profit in recognition of our employees' contributions toward achieving the year's financial results. This is an increase compared to our profit sharing payment made in February 2023 of $563 million related to our 2022 pre-tax profit.

Our broad-based employee profit sharing program provides that for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to eligible employees. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the nine months ended September 30, 2024, we accrued $964 million in profit sharing expense based on the year-to-date performance and current expectations for 2024 profit.

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card, retail, ridesharing, car rental and hotel companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Total cash sales to American Express were $5.4 billion in the nine months ended September 30, 2024, an increase of 6% compared to the prior year period. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						26

Item 2. MD&A - Financial Condition and Liquidity

Investing Activities

Short-Term Investments. During the nine months ended September 30, 2024, we redeemed a net of $1.1 billion in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Capital Expenditures. Our capital expenditures were $3.8 billion and $3.7 billion for the nine months ended September 30, 2024 and 2023, respectively. We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 2024 capital spend of approximately $5.0 billion, excluding the New York-LaGuardia airport project discussed below, will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements.

New York-LaGuardia Redevelopment. As part of the terminal redevelopment project at LaGuardia Airport, we are partnering with the Port Authority of New York and New Jersey to replace Terminals C and D with a new state-of-the-art terminal facility. Construction is ongoing with completion expected by the end of 2024.

Using funding primarily provided by existing financing arrangements and other sources of funding, we expect to spend approximately $350 million on this project during 2024, of which $237 million was incurred in the nine months ended September 30, 2024.

Financing Activities

Debt and Finance Leases. In the nine months ended September 30, 2024, we had cash outflows of $2.4 billion related to repayments of our debt and finance lease obligations, including approximately $900 million of early repayments. This included early extinguishment of $744 million in principal related to a portion of the SkyMiles Term Loan and various secured and unsecured notes, and approximately $150 million on finance leases that were scheduled to be paid later in 2024. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

In February 2024, Moody's credit rating agency affirmed our credit rating and upgraded its outlook for Delta to positive. In July 2024, Fitch upgraded Delta's credit rating to BBB-, an investment-grade metric. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for further information on the effect of these ratings changes on our debt agreements.

Capital Return to Shareholders. On August 20, 2024, we paid the dividend previously declared in the June 2024 quarter for total cash dividends of $96 million. Total cash dividends for the nine months ended September 30, 2024 were $225 million.

On September 19, 2024, the Board of Directors approved and we will pay a quarterly dividend of $0.15 per share on October 31, 2024 to shareholders of record as of October 10, 2024.

Covenants. We were in compliance with the covenants in our debt agreements at September 30, 2024.

Critical Accounting Estimates

There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						27

Item 2. MD&A - Supplemental Information

Supplemental Information

We sometimes use information (non-GAAP financial measures) that is derived from the Condensed Consolidated Financial Statements, but that is not presented in accordance with GAAP. Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

Included below are reconciliations of non-GAAP measures used within this Form 10-Q to the most directly comparable GAAP financial measures. Reconciliations below may not calculate exactly due to rounding. These reconciliations include certain adjustments to GAAP measures to provide comparability between the reported periods, if applicable, and for the reasons indicated below:

•Third-party refinery sales. Refinery sales to third parties, and related expenses, are not related to our airline segment. Excluding these sales therefore provides a more meaningful comparison of our airline operations to the rest of the airline industry.

•MTM adjustments and settlements on hedges. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period, and therefore we remove this impact to allow investors to better understand and analyze our core performance. Settlements represent cash received or paid on hedge contracts settled during the applicable period.

•Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.

•Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.

•One-time pilot agreement expenses. In the March 2023 quarter, Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023. The agreement included a provision for a one-time payment made upon ratification in the March 2023 quarter of $735 million. Additionally, we recorded adjustments to other benefit-related items of approximately $130 million. Adjusting for these expenses allows investors to better understand and analyze our core cost performance.


Total revenue, adjusted reconciliation
	Three Months Ended September 30,
(in millions)	2024		2023
Total revenue	$	15,677	$	15,488
Adjusted for:
Third-party refinery sales	(1,083)		(935)
Total revenue, adjusted	$	14,594	$	14,553


Operating expense, adjusted reconciliation
	Three Months Ended September 30,
(in millions)	2024		2023
Operating expense	$	14,280	$	13,504
Adjusted for:

Third-party refinery sales	(1,083)		(935)
MTM adjustments and settlements on hedges	24		21



Operating expense, adjusted	$	13,221	$	12,590


Delta Air Lines, Inc. \| September 2024 Form 10-Q						28

Item 2. MD&A - Supplemental Information


Fuel expense, adjusted reconciliation
						Average Price Per Gallon
	Three Months Ended September 30,				Three Months Ended September 30,
(in millions, except per gallon data)	2024		2023			2024		2023
Total fuel expense	$	2,747	$	2,936		$	2.51	$	2.76
Adjusted for:
MTM adjustments and settlements on hedges	24		21			0.02		0.02

Total fuel expense, adjusted	$	2,771	$	2,957		$	2.53	$	2.78

						Average Price Per Gallon
	Nine Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per gallon data)	2024		2023			2024		2023
Total fuel expense	$	8,157	$	8,128		$	2.64	$	2.76
Adjusted for:
MTM adjustments and settlements on hedges	(4)		59			—		0.02

Total fuel expense, adjusted	$	8,153	$	8,188		$	2.64	$	2.78


TRASM, adjusted reconciliation
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023			2024		2023
TRASM (cents)	20.58	¢	21.15	¢		21.30	¢	21.53	¢
Adjusted for:
Third-party refinery sales	(1.42)		(1.28)			(1.63)		(1.38)

TRASM, adjusted	19.16	¢	19.87	¢		19.67	¢	20.14	¢


CASM-Ex reconciliation
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023			2024		2023
CASM (cents)	18.75	¢	18.44	¢		19.32	¢	19.47	¢
Adjusted for:

Aircraft fuel and related taxes	(3.61)		(4.01)			(3.77)		(4.00)
Third-party refinery sales	(1.42)		(1.28)			(1.63)		(1.38)
Profit sharing	(0.42)		(0.57)			(0.45)		(0.53)
One-time pilot agreement expenses	—		—			—		(0.42)


CASM-Ex	13.30	¢	12.59	¢		13.48	¢	13.13	¢


Delta Air Lines, Inc. \| September 2024 Form 10-Q						29

Item 2. MD&A - Supplemental Information

Free Cash Flow

The following table shows a reconciliation of net cash provided by operating and used in investing activities (GAAP measures) to free cash flow (a non-GAAP financial measure). We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include:

•Net redemptions of short-term investments. Net redemptions of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations.

•Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects.


Free cash flow reconciliation
(in millions)	Three Months Ended September 30, 2024

Net cash provided by operating activities	$	1,274
Net cash used in investing activities	(1,123)
Adjusted for:
Net redemptions of short-term investments	(117)

Net cash flows related to certain airport construction projects and other	61


Free cash flow	$	95


Delta Air Lines, Inc. \| September 2024 Form 10-Q						30

Item 3. Market Risk

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to permit us to identify and disclose important information timely and effectively. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of September 30, 2024 to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the three months ended September 30, 2024, we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

"Item 3. Legal Proceedings" of our Form 10-K includes a discussion of our legal proceedings. There have been no material changes from the legal proceedings described in our Form 10-K.

ITEM 1A. RISK FACTORS

“Item 1A. Risk Factors” of our Form 10-K includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K. Except as presented below, there have been no material changes from the risk factors described in our Form 10-K.

Disruptions of our information technology infrastructure could interfere with our operations, possibly having a material adverse effect on our business.

Disruptions in our information technology capability could result from a technology error or failure impacting our internal systems, whether hosted internally at our data centers or externally at third-party locations, or large-scale external interruption in technology infrastructure support on which we depend, such as power, telecommunications or the internet. The operation of our technology systems and the use of related data may also be vulnerable to a variety of other sources of interruption, including natural disasters, terrorist attacks, computer viruses, hackers and other security issues. A significant individual, sustained or repeated failure of our information technology infrastructure, including third-party networks, software-as-a-service applications, cloud services, or technology that we utilize and on which we depend, could impact our operations and our customer service, result in loss of revenue, increased costs and damage our reputation. While we have initiatives and disaster recovery plans in place to prevent or mitigate disruptions, we recently experienced a global outage caused by a faulty update by cybersecurity vendor CrowdStrike in July 2024 that resulted in global information technology outages of Windows-based systems. The faulty software update significantly affected our information technology systems, disrupting our operations. The operational disruption resulted in flight delays and approximately 7,000 cancellations of Delta flights over five days, impacting 1.4 million customers. The CrowdStrike-caused outage and resulting operational disruption adversely impacted our results of operations as discussed in more detail in “Item 7. Management's Discussion and Analysis.” While we continue to invest in improvements to our preventative initiatives and disaster recovery plans, the measures we have in place may not be adequate to prevent future business disruptions and any material adverse financial and reputational consequences to our business.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						31

Item 1A. Risk Factors

Failure of the technology we use to perform effectively could have a material adverse effect on our business.

We are dependent on technology initiatives and capabilities to provide customer service and operational effectiveness in order to compete in the current business environment. For example, substantially all of our tickets are issued to our customers as electronic tickets, and a growing number of our customers check in using our website, airport kiosks and our FlyDelta mobile application. We have made and continue to make significant investments in customer facing technology such as delta.com, the FlyDelta mobile application, in-flight wireless internet, check-in kiosks, customer service applications, application of biometric technology, airport information displays and related initiatives, including security for these initiatives. We are also investing in significant upgrades to technology infrastructure and other supporting systems and transitioning to cloud-based technologies. The performance, reliability and security of the technology we use are critical to our ability to serve customers. If this technology does not perform effectively, including as a result of the implementation or integration of new or upgraded technologies or systems, our business and operations can be negatively affected, which could be material. As discussed above, the faulty CrowdStrike software update that resulted in global information technology outages of Windows-based systems in July 2024 significantly affected our information technology systems, disrupting our operations. The operational disruption resulted in flight delays and approximately 7,000 cancellations of Delta flights over five days, impacting 1.4 million customers. Additional failures of the technology we use or depend on could expose us to liability, disrupt our business and damage our reputation in the future.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information with respect to purchases of common stock we made during the September 2024 quarter. The table reflects shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan"). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations may be deemed to be "issuer purchases" of shares that are required to be disclosed pursuant to this Item.


Shares purchased / withheld from employee awards during the September 2024 quarter
Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Approximate Dollar Value (in millions) of Shares That May Yet be Purchased Under the Plan
July 2024	24,135	$	44.52	24,135	$	—
August 2024	3,748	$	40.74	3,748	$	—
September 2024	43,050	$	42.79	43,050	$	—
Total	70,933			70,933


Delta Air Lines, Inc. \| September 2024 Form 10-Q						32

ITEM 6. EXHIBITS

(a) Exhibits


3.1 (a)						Delta's Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on April 30, 2007).*

3.1 (b)						Amendment to Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).*

3.2						Delta's Bylaws (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on December 9, 2022).*

4.1						Description of Registrant's Securities (Filed as Exhibit 4.1 to Delta's Annual Report on Form 10-K for the year ended December 31, 2020).*

10.1						Separation Agreement and General Release, dated August 22, 2024, by and between Delta Air Lines, Inc. and Michael Spanos

10.2(a)						Supplemental Agreement No. 3, dated September 18, 2024, to Purchase Agreement Number PA-04696, dated July 18, 2022, between The Boeing Company and Delta Air Lines, Inc. relating to Boeing Model 737-10 Aircraft.**

10.2(b)						Letter Agreements, dated September 18, 2024, relating to Supplemental Agreement No. 3.**

15						Letter from Ernst & Young LLP regarding unaudited interim financial information.

31.1						Certification by Delta's Chief Executive Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.

31.2						Certification by Delta's Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.

32						Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta's Chief Executive Officer and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.

101.INS						Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included in Exhibit 101)

*						Incorporated by reference.
**						Portions of this exhibit have been omitted as confidential information.


Delta Air Lines, Inc. \| September 2024 Form 10-Q						33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Delta Air Lines, Inc.
			(Registrant)

			/s/ William C. Carroll
			William C. Carroll
			Senior Vice President - Controller
			(Principal Accounting Officer)
October 10, 2024


Delta Air Lines, Inc. \| September 2024 Form 10-Q						34

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Date	Price Target	Rating	Analyst
11/15/2024	$83.00	Buy	Goldman
11/12/2024	$59.00 → $75.00	Buy	TD Cowen
7/17/2024	$61.00 → $59.00	Buy	TD Cowen
7/2/2024	$55.00 → $61.00	Buy	TD Cowen
3/20/2024	$59.00	Buy	UBS
3/7/2023	$40.00 → $47.00	In-line → Outperform	Evercore ISI
2/8/2023	$55.00	Neutral → Buy	Redburn
1/5/2023	$39.00	Hold → Buy	Argus

SEC Form 10-Q filed by Delta Air Lines Inc.

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