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TRANSPORTATION: Delta kicks off airline earnings (revisit)

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Circling back to Delta numbersfrom yesterday; equities closed -1.4% which is as low vol as it gets. We still see read-through as neutral; mgmt is talking about transatlantic conditions in Sept. and ahead very positively but we don't have enough history with it to calibrate - brief look at it indicates it uses one-offs to to justify misses; i.e. CrowdStrike outage (Q3) and election (Q4) impact numbers look heavy - former is now with the lawyers re. compensation for damages. Equity analysts look net mixed as well but likely focused on domestic conditions.

  • Election impact is not out of ordinary; sees clear impact in only 2 weeks and mainly in domestic.
  • Reiterates capacity adjustments made in transatlantic (moving it from underperforming areas) alongside robust demand has it performing strongly.
  • Reminder it saw unit revenues in domestic and transatlantic reverse to positive yoy for Sept. It was asked if the group is seeing similar in Oct-Dec - refused to comment but did say Oct and Dec significantly better than election impacted Nov.
  • Continues to reiterate premium outperforming and sees the underperformance in Main cabin yields helping a pullback in capacity growth there.
  • Seeing a structural shift in peak long-haul from July towards Sept/Oct (could be playing down Q3 miss) adding when "the weather in Europe in August is really hot. And that people who have choices when they can take their vacations are moving into, let's call it, more temperate months."
  • and sees similar shift in corporate travel; "I think it's continuing to shift travel to Europe in particular, from a July and August peak to a September and October peak."
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Circling back to Delta numbersfrom yesterday; equities closed -1.4% which is as low vol as it gets. We still see read-through as neutral; mgmt is talking about transatlantic conditions in Sept. and ahead very positively but we don't have enough history with it to calibrate - brief look at it indicates it uses one-offs to to justify misses; i.e. CrowdStrike outage (Q3) and election (Q4) impact numbers look heavy - former is now with the lawyers re. compensation for damages. Equity analysts look net mixed as well but likely focused on domestic conditions.

  • Election impact is not out of ordinary; sees clear impact in only 2 weeks and mainly in domestic.
  • Reiterates capacity adjustments made in transatlantic (moving it from underperforming areas) alongside robust demand has it performing strongly.
  • Reminder it saw unit revenues in domestic and transatlantic reverse to positive yoy for Sept. It was asked if the group is seeing similar in Oct-Dec - refused to comment but did say Oct and Dec significantly better than election impacted Nov.
  • Continues to reiterate premium outperforming and sees the underperformance in Main cabin yields helping a pullback in capacity growth there.
  • Seeing a structural shift in peak long-haul from July towards Sept/Oct (could be playing down Q3 miss) adding when "the weather in Europe in August is really hot. And that people who have choices when they can take their vacations are moving into, let's call it, more temperate months."
  • and sees similar shift in corporate travel; "I think it's continuing to shift travel to Europe in particular, from a July and August peak to a September and October peak."