Please standby, we are about to begin. Good morning, everyone. And welcome to the Delta Air Lines June Quarter Financial Results Conference Call. My name is [ph] Michelle (00:12), and I will be your coordinator. At this time, all participants are in a listen-only mode, until we conduct a question-and-answer session, following the presentation. As a reminder, today’s call is being recorded. I would now like to turn the conference over to Jill Greer, Vice President of Investor Relations. Please go ahead, ma’am.

Thanks, Michelle. Good morning, everyone and thanks for joining us for our June quarter call. Joining us in Atlanta today are CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is here in the room for the Q&A session. Ed will open the call and give an overview of Delta’s financial performance, Glen will then address the revenue environment and Paul will conclude with a review of our cost performance and cash flow. To get in as many questions as possible during the Q&A, please limit yourself to one question and a brief follow-up. Today’s discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta’s SEC filings. We will discuss non-GAAP financial measures. All results exclude special items, unless otherwise noted. We are also providing cost comparisons on a normalized basis as it better matches the retroactive expense we incurred in the fourth quarter 2016 from our pilot contract to the appropriate quarters of 2016. You can find the reconciliation of our non-GAAP measures on the Investor Relations page at ir.delta.com. And with that, I’ll turn the call over to Ed.

Thank you, Jill, and good morning. I appreciate everyone joining us on the call this morning. Earlier today, we reported the June quarter pre-tax profit of $1.85 billion and earnings per share of $1.64, largely in line with consensus. This was the best June quarter in Delta’s history. We generated an 18.4% operating margin, a 14% after-tax return on invested capital and returned $750 million to our shareholders. We also grew our topline by 3% this quarter. The first year-on-year increase we have reported in two years. And the quarter could have been even better. We absorbed $125 million pre-tax loss from the operational disruption following severe storm that hit Atlanta in early April. While we can’t control the weather, we can improve our recovery, we had accelerated technology investments and implemented process improvements for the summer that incorporate what we learned from the April event. In true Delta form, our people bounced back to deliver the strong operations we’re known for. For the first half of this year, we’ve had 129 days of no mainline cancels and 35 days without a system-wide cancelation. This is an improvement of 8% and 13%, excuse me, 13%, respectively, to last year and substantially better than our competition. The great work of our people, supported by the continued investment in our business was evident in the results from the recent J.D. Power survey. In that survey, Delta’s customer satisfaction score improved 33 points to the highest level in our history and we narrowed the gap to first place to 7 points. It’s truly an honor to recognize our employees with $338 million accrued in profit sharing this quarter and $70 million in shared rewards. They are the very best in our business. Looking ahead to the remainder of the year, our unit revenues…

Thanks, Ed, and good morning, everyone. This quarter, we produced a record total revenue of just under $11 billion, an increase of nearly $350 million or 3% over last year, with solid improvements across passenger, cargo and other revenue. This result includes $115 million revenue headwind from the April storm disruption. I want to add my thanks to the Delta people for their focus every day on taking great care of our customers, that is what sets Delta apart from the industry. Our initiatives to give customers a more efficient global network and innovative experience, and more choice through segmentation are driving continued revenue growth, and premiums to the industry, which now stand at 110% through the first half. Before I go through our future opportunities with these initiatives, let me quickly highlight the details of the June quarter. Passenger revenues increased 3% or $260 million, driven by improvements in business yields and our commercial initiatives with $100 million of this increase from Branded Fares. Cargo sales were up 11% in the first year-on-year improvement in 10 quarters, Kudos to the cargo team for delivering this very strong result. Other revenue grew 4% ex-refinery driven by a strong 8% improvement in loyalty, partially offset by lower MRO revenues. Our partnership with American Express produced $70 million of incremental value this quarter and we are on pace to deliver $300 million of incremental value in 2017, including another record year for card acquisitions. This tremendous demand for our co-brand card is a testament to the strength of our brand and great partnership with American Express. Turning to unit revenues, the improvement in passenger revenue equated to a PRASM growth of 2.5%, including 1 point of pressure from the April storms. We saw particular strength in business yields, which improved 3 points…

Thanks, Glen, and good morning, everyone. Thank you for joining us today. To echo Ed and Glen’s comments, let me begin by saying thanks to the Delta people worldwide for the great service they provide to our customers. Their hard work has built a durable business model that is delivering consistent results. For the June quarter, operating expenses increased roughly $65 million, as lower fuel costs due to last year’s hedge settlements, offset investments in our people, our customer experience and our fleet. These investments drove an increase in non-fuel CASM of 5.5%, which included about a point of pressure from the April operational disruption. Moving into the back half of the year, we’ll see CASM headwinds ease despite continued pressures from wage increases and higher depreciation. First, we’ll lap the technology outage which drove about a 0.5 point of CASM in last year’s third quarter. Second, our planned capacity growth for the year was weighted to the back half after keeping capacity flat in the first half of the year, which will benefit CASM. Third, we’ll annualize higher levels of product, maintenance and technology investments from the back half of 2016, such as enhanced snacks and additional meal services that were added last fall. Finally, our upgauging initiatives will deliver benefits at a slightly faster pace as compared to first half of the year due to our aircraft delivery schedule and into service. This initiative is already delivering solid productivity savings and in the first half of the year, we produced 1.6 higher domestic ASMs on 1% fewer departures. As a result of these four factors, we expect unit cost growth in the September quarter to be up roughly 2% on a normalized basis, which puts us on the right trajectory to achieve our full year 2% to 3%…

Thanks Ed, Glen and Paul. Michelle, we’re ready for Q&A with the analysts if you could give them instructions.

Thank you. [Operator Instructions] And our first question will come from Dan McKenzie with Buckingham Research.

Hey. Good morning, everybody. Thanks. I guess, Paul, first question here is, just on the stock buyback in the second quarter and the first quarter. I think you guys have bought back $800 million in shares that the share count was flat, so this is kind of a house cleaning question. I’m just wondering what drove the incremental buyback in the second quarter and if you could just help us understand what the share count is today?

Sure. Good morning, Dan. Thanks for joining us. The share count as reported is a weighted average calculation and as we repurchased stock through the quarter, the weighted average was impacted by the fact that we had contributed $350 million of equity to the pension plan at the end of March. So if you’re looking for the benefit of the buyback, if you look to the quarter end shares outstanding, it was actually down about 12 million shares. It was just a nuance with the weighted calculation due to the timing of that contribution.

Understood. And then I guess the second follow-up question here for you, Glen. I know that Delta has a number of initiatives in the back half of the year to I think to drive or improve revenue on that particular entity. I’m just wondering if you can just remind us what those initiatives are and how you think they might contribute in the back half of the year relative to the first half?

Sure. Great question. The -- we continue on the path and really it’s not new initiatives. It’s doing the initiatives we’ve already announced in a better way and bringing them to a broader audience, and just within this quarter, for example, we expanded the ability in post purchase, that was in May, to actually buy a ticket and then say if you’re a business customer and you want to sit in a different cabin then you’re allowed to by your company, you can purchase that in a post purchase transaction. We’ve seen about an $80 million uptick for that on an annual run rate basis. Starting this month or this past month in June, we now for elites are allowing them to use their miles to sit in the cabins they want and we believe that will contribute another $50 million to $100 million on a run rate basis as we continue to expand those types of programs. And I think there when you think about that these are new and innovative programs that require a lot of programming, because you have to distribute them through a lot of different means and our ability to continue to focus on bringing the products and services that we have in the market to a broader and broader audience is going to drive our ability to monetize our Premium products more in the next year.

Thanks so much. Appreciate it.

And next we’ll move on to Hunter Keay with Wolfe Research.

Hey. Thanks. Good morning.

Good morning.

So you guys sound really, yeah, hi. You sound great. Ed, obviously, you feel like you’re sounding better and better about how things are going. I know that you’ve said that the initial guide for this year on margin was down about 150 basis points, but is it safe to assume that now the 16% to 18% margin target is in play for this year and maybe even step further, might we be looking at, putting aside this whole normalization stuff for a second, might we be looking at year-on-year margin expansion on reported margins from 2016 this year?

Is your question, Hunter, will we actually expand reported margins ‘17 over ‘16 essentially?

Yeah. Or if you don’t want to answer that or are you going be in the 16% to 18% range this year, because I know you referred to it as the transition year and you originally you said you’re going to be down, but obviously things are getting better by the day. So I was just trying to sort of categorize how you’re thinking about full year?

Got it. Yes. We are, I think, I said such in my prepared remarks that we’re anticipating being in the low end of that 16% to 18% this year.

Oh! Okay. Sorry. I must have missed that. Okay. And then let’s talk for a second the international investment you’re making and how you see these evolving over the next three years to five years. Is this sort of, a big picture question here, is this sort of a view on how you maybe see foreign ownership rules potentially being relaxed by other countries, maybe if you look at the success and stability of U.S. airlines here relative to the rest of the world? There might be some angle where foreign airlines which are far more volatile businesses might be interested in having maybe a majority ownerships from some of the more strong U.S. airline, Delta included. Is this just merely a JV play or is there something bigger picture down the road that you’re thinking about cross border consolidation that you’re setting up for today?

We’re not angling to get in and control any of our foreign investors or vestees or partnerships. What we’ve got here, Hunter is historically through the JVs and the partnerships they’ve been contractual commercial arrangements and what we have seen is our ability to drive value is much greater once you get inside the boardroom than it is through a pure contract in terms of aligning ownership and driving value in a consistent manner and being able to invest truly for the long-term together. We’ve seen that in Aeromexico, which drove the higher-level investment. We’ve seen that in GOL. We’ve seen that in Virgin Atlantic, certainly. And so I think over time, you might see us continue to go down that path, but no, I don’t think in our future, certainly, not in the next five years to 10 years I don’t see the foreign ownership rules changing dramatically.

Okay. Thank you.

Yeah. Sure.

And next we’ll move on to Helane Becker with Cowen and Company.

Thanks, Operator. Hi, team. Thanks for taking the question. Ed, I know that there’s this proposal in Congress to privatize, I guess for lack of a better word or separate out air traffic control and I know Delta in the past has been opposed to it. And I was just kind of wondering if you guys are going to try to be involved in what goes on so that your views are clearly expressed in the process and that what works best for you gets actually implemented?

Thanks, Helane. Yeah. There’s been a lot of work that’s being done in Washington around the ATC reform topic and, yes, we at the table. We are working constructively with Chairman Shuster. We’re not philosophically opposed to privatization for privatization sake. What we want to do is make certain that we have the proper governance, transparency and cost efficiency to drive the reforms needed in the next air traffic control system that gets modernized and we’re in full support of the President’s agenda to invest and modernize the systems.

Okay. Great. Thank you very much and actually that was my only question.

Good.

And next we’ll move to Jamie Baker with JP Morgan.

Hey. Good morning, Delta. Question for, Glen, just a couple of demand-related issues. First on the Atlantic, after the summer peak, how profound a shift is there in point-of-sale? I’m just wondering how the currency impact of that is potentially going to impact the trajectory of Atlantic RASM kind of going forward in the second half?

Jamie, I think I’m pretty enthusiastic about how the first half of the year has shaped up relative to the capacity levels that are in the Transatlantic. And what we’ve seen is really a higher demand in the business cabin on a year-over-year basis and it’s not insignificant, it’s a relatively significant increase. So we read a lot about European business sector picking up and we’re really seeing that in the travel to and from Europe. So we have a couple of things that are developing that are positive for us. The euro is at a multiyear high here. We have business demand and a very, very solid position. As you know, July and August are not very big business months in Europe, so we’ve been able to offset that with higher U.S. point-of-sale. But relatively encouraged at the trends that we see as we go into the fall that those should be quite beneficial, higher euro, higher business demand as you get into more business-oriented months.

Okay. That helps. And second, in terms of Basic Economy, I’m wondering as your primary competitors rollout similar programs at a pretty rapid pace, has that had any impact on the returns that you’re generating and also has there been any change since last quarter in terms of the, I guess, the percentage of your corporate accounts that all those fares off from employee use.

Well, I’m going let Steve speak to the corporate sector and the other focus we have is not only to ensure that our customers are getting the right seats, but the corporations can sell up into Comfort+ and even first class and I think that’s where we’re seeing a bit, even more success as we move forward and I’ll turn the rest of that answer to Steve.

Yeah. That’s exactly right, Glen. You’re seeing the -- at the individual level the capability to be able to buy into the Comfort+ cabin, which that new functionality is increasing the corporate revenue base. And we’re also seeing more and more corporations from a policy perspective enable their traveler to also purchase those types of products. So you’re seeing it both at the individual level and at the policy level.

Okay. Terrific. Thanks for the color. Appreciate it.

Thanks, Jamie.

Thanks, Ed.

Next we’ll move on to Duane Pfennigwerth with Evercore ISI.

Hi. Thanks. Maybe I missed it, but did you say what your expectation was for domestic unit revenue growth in the third quarter?

Duane, we don’t typically get that level of forecasting detail.

Okay. Fair to say that you expect sequential improvement?

Yes.

Yes.

And sorry for a modeling question, but I think there’s a little investor confusion on the normalization of non-fuel CASM. Can you talk about much we should be adding to 3Q cost of last year to normalize and then correspondingly, how much should we be subtracting from 4Q cost of last year to normalized, and is it clear that we should be thinking about 2% growth in the fourth quarter off of that lower cost base?

Hey, Duane. It’s Paul. Good morning. What we’ve said is the normalization effect was about $130 million per quarter. So, give or take, so that if you assume that was all out there, you’d be left with about $125 million to $130 million of cost remaining in the fourth quarter. Keep in mind that this doesn’t really impact the second half conversation, overall, we’re just trying to take out some of the volatility between those two quarters, given the discrepancy in the retroactive piece.

So that implies CASM down sort of mid singles in fourth quarter.

Yeah. No.

No.

No, no, no, no. On a reported basis...

On an actual.

On an actual basis it would be down significantly because of the $475 million charge that we took in the 4Q last year.

Thank you.

And next we’ll hear from Michael Linenberg with Deutsche Bank.

Yeah. Hey. Just two questions related to the Pacific here for Glen. So, look unit revenue has been running down in that region, better, obviously in the June quarter than March quarter, so we’re seeing the sequentially improvement. But still on a sizable capacity decline, 10%, 11%, how much of what’s impacting that, is it demand or is it structural or is it, you’re transitioning from the 74s to smaller wide bodies, like at what point do we get to positive territory there, what are you seeing in that market?

That’s a great question. And I’d say that we’re very excited about our 2018 results in the Pacific. This is the last real year of a multiyear transition and thanks to our Pacific team and Ed’s direction, we’ve got what we need in place now with the Korean joint venture to really produce a competitive and an improving Pacific operation over the next couple years. So it was -- when you think about the merger with Northwest, 100% of our capacity was routed through Tokyo and Narita at the time of the merger. And now as you think forward is, we have a very diversified portfolio, we have multiple hubs and we’re really at the endpoints of the restructuring and looking forward to very much improved 2018 in the Pacific.

Great. And then, Glen, just you referenced the Beijing hub in your opening remarks, when -- presumably that’s the new airport?

Yeah.

When does that come online?

2019.

Okay. Great. Thank you.

And next we’ll move on to Andrew Didora with Bank of America.

Hey. Good morning, everyone. Just one question for Glen, obviously, 3Q will be four quarters in a row of accelerating PRASM. I know comps do get a lot tougher in 4Q, so maybe that streak could be broken. But is there anything you’re seeing in your bookings or corporate demand right now that would result in PRASM not being positive in 4Q?

Nothing that would indicate that now.

Okay. Thank you.

And next we’ll move on to Darryl Genovesi with UBS.

Hi, guys. Thanks for the time. Glen, you started selling Premium cabin fares I think for travel in the fall. Based on what you -- based on what you’ve seen so far, does this basically look like your expectation based on your experience with Air France, et cetera?

We’re very excited about that cabin and that cabin will be expanding, and yes, we are -- the fares are where we think they were in the business case and the demand is very strong for the initial. Remember, we really don’t have very many seats available in that category on Delta, of course, we do in Air France and KLM and really, one of the big advantages for all of the programming work that’s gone into being just able to sell that fare is we can better display our partners’ offerings today and be able to offer Comfort+ and Premium Select in most markets now.

Okay. And then you had provided a longer term forecast for Branded Fares at one of your Investor Days. It sounds like you picked up about $100 million or so this quarter or about $400 million on an annual run rate basis. First of all, are those the right numbers? And then secondly, with the rollout of Premium Economy and the adoption of Basic Economy by some of your peers, would you expect that that Branded Fares revenue growth accelerates or decelerates or holds steady from here? Is there just a basic outlook on where that goes?

I think we -- what we’ve said is we believe we’re in the early stages of optimizing that, because when you’re bringing new products and services to market, you have so many things you have to figure out through distribution, through pricing, through customer adoption. And these products are very young in the longer scheme of how airlines have sold tickets and we believe there are multiple years of continued upside opportunity for us that will accelerate at a different rate than base passenger revenues.

Great. Thanks very much. Appreciate the time.

And next we’ll move on to Savi Syth with Raymond James.

Hey. Good morning. Glen, maybe a question for you, as you continue to compete on product and you’ve been ahead of your competition on operational reliability and things like that and you’re seeing them starting to catch up, as you continue to improve the product, does at any point Delta’s kind of older fleet start to hinder the competitive advantage or is this going to mix new versus mid-life something that can continue and not something that holds back from a customer appreciation standpoint?

Savi, hi. This is Ed. It’s a good question. It’s interesting, we -- while we do see the competition improving, which we think is a good thing. We continue to improve as well. So we’re not -- the bar continues to get higher and one of the things that will drive continued improvement in Delta is the investment that we are making in new fleet over the next few years. We’ve replaced 25% of our total fleet over the last five years. We’ll probably replace another 20% to 25% of our fleet in just the next three years coming as we retire the MD88s by 2020 and we start to reduce reliance on some of our older fleet types, 747 is going out this year as well. So I think that is certainly something that we anticipate not just from a reliability perspective, but the financial performance of the new aircraft. We’re bringing in the 321s, the 739s are at or above expectations and they will be a big source of additional margin contribution for us into the future.

Got it. Thanks. That’s helpful, Ed. So, but I’m assuming that sticks to still that you’re going be able to do that volume less than 50% of your free cash -- your operating cash flow, which is around the current level of CapEx, is that right?

That’s right.

Okay. Great. And then if I might just ask a quick modeling question, is it the refinery -- has there been any change in outlook on the contribution there?

Good morning, Savi. It’s Paul. I think that we had said previously that the refinery was expected to be about $100 million for the year. That’s probably down slightly based on the environmental compliance. I think we’ve got about $30 million to-date. I would say it’s probably going to be down slightly from that $100 million but we’re still expecting it to be profitable for the rest of the year.

Okay. All right. Thanks, guys.

And next we’ll move to Rajeev Lalwani with Morgan Stanley.

Hi. Good morning. Thanks for the time. I just I wanted to come back to some of the comments you were making on growth and margins. You’ve obviously done a good job bringing margins to within targeted levels. With that occurring, what’s the approach going to be on capacity relative to the cap that you put in place for ‘17 and beyond, obviously, as we look at the schedules beyond 3Q, it seems like you’re going to maybe move above that 1% level but your thoughts would be great?

Sure, Rajeev. We’re still operating with the plan we have in place for 2017 which is the overall 1% growth for the year. I know there’s -- out in the schedules there’s a little more capacity in the backend of the year that are going to continue to be refined as we get closer and you’ll see some of that schedule firm up and some reductions take place. But we’re -- the plan is the 1% and that continues to be our goal for the year. And then when we get to the end of the year as we look at where our margins will be and we will anticipate being, as I said earlier, at the low end of the 16% to 18% long-term margin guidance, we’ll evaluate the 2018 capacity schedule.

Great. Thanks. And then, Glen, a question for you, on the international front there appears to be a bit more stability on the pricing front and your comments going forward to support that as well. Does that maybe change your growth priority to move from domestic to international or is domestic still where the focus will be?

We see more of the opportunities remaining in domestic for the short term and we’ll continue to evaluate the trends. The stability in the international marketplace is other than Latin which has actually been the most stable, is a relatively new phenomenon and so we’re going to monitor that. And as we -- as Ed said, as we look at what we achieve in 2017 that will help guide what we set our objectives to be for 2018.

Very helpful. Thank you, gentlemen.

And next we’ll move to Joseph DeNardi with Stifel.

Yeah. Thanks. Good morning. Glen, thanks for the color regarding the Amex contribution and the card acquisitions. I guess the question is you guys provide the expectation that Amex is going to contribute $4 billion by 2021. Problem with that chart is no one knows what that means, what to do with it, because it’s quantified as value or contribution. So can you convert that to sort of EBIT number or cash, I think, it’s pretty obvious that that value there is being lost as being currently communicated?

Hey, Joe. It’s Paul. I’ll take a shot at that, too. I mean, keep in mind that that -- when we talk about that value, we are talking about it in a cash context. The noise comes about from how frequent flyer miles are recognized through the P&L where there’s a piece that gets to come through now and a piece that has to be deferred over time. That value is split between predominantly revenue from the sale of miles to third parties but also some in the cost side through efficiencies that we’re able to get as a sizable partner. So I think we’ve taken the point and we continue to look at ways to talk about that and disclose that a little bit more clearly in a balanced way, but the value is cash value.

Hey, Joe. This is Ed.

Okay.

Joe, if I could try one other thing. Yeah, I think the points you’ve been raising over the last year are good ones and we need to continue to find better ways to communicate the sources of value that we drive, while we have to respect the confidentiality of our agreements with American Express, we can do a better job of laying out some of the value that we are creating and the sustainability of that value. So this coming Investor Day that we’ll have in December, we’re going to do a -- we are going to take a shot at that and hopefully that’ll give us a good opportunity to get the message out a little more clear.

That’s great. So, Paul, just to clarify, that $4 billion, that’s an expectation that Amex is contributing $4 billion in cash by 2021?

It’s across all the programs but yes anyway.

Okay. I mean…

Hey, Joe. This is Ed.

Sure.

Just to add, that assumes volume growth, that assumes -- I mean there’s a lot of stuff in there. It’s not a contractual agreement. There’s a lot of assumptions that go into making that up. So assuming we hit our plan and Amex hits their plan and that is what we’re on a good path towards, that would be the end result.

Okay. That’s helpful.

Yeah. And also just...

Yeah.

… add, Joe, keep in mind too that that’s both on the revenue and the cost line. It’s not all coming through sale.

Okay. Okay. I guess the second question is, the co-brand card market is getting quite a bit more competitive and it feels like over the past few years the strategy at airlines is to effectively devalue the currency. So it require -- you need more miles to buy a ticket, that’s obviously beneficial to the economies of the program for the airline, but it doesn’t make the currency demanded more by consumer. So how do you balance that conflict, Ed, between trying to structure the program to really maximize demand for that currency relative to what it means for the airline?

This is Glen and let me take a stab on that and maybe Ed would like to close if I leave any holes in the answer is, I think, the way that we look at this is the hard acquisitions continued to achieve record results without significant change to the program. And I think there’s been a lot of talk at other carriers who have announced fare increases, but we have been in a dynamic pricing environment now for multiple years. And I think that’s one of the successes of our card in the marketplace is that there are incredible value propositions for customers out there who acquire and use our cards, and we have no intention to degrade the total value proposition. We may adjust on the margin the valuation of peak seats versus off peak seats or particular days versus, but the value we’re creating seems to be greater and greater and I think that’s being recognized on the marketplace by -- really when you would think that the market was probably saturated with airline revenue cards that we have posted three acquisition record years in a row and we’re on track to produce another this year. So consumers are enjoying the products and services that we buy and they’re continuing to apply at record numbers. And our team’s done a great job and we have lots of innovation space coming in that space in the last half of the year.

And, Joe, this is Ed. The only other thing I’d add to Glen’s remarks are from an Amex perspective, I know we are the leading growth vehicle in their co-brand portfolios by a large margin and the partnership continues to be in a really great place. We issued more free tickets this year than any time in our history and I think the program’s in a really solid position.

That’s great. Thank you.

Michelle, we’re going to have time for one more question from the analysts.

Thank you. Next we’ll hear from David Vernon with Bernstein.

Good morning, guys. And thanks for taking the time to fit in the question. I wanted to see if you could comment a little bit about the C Series and how that will implemented in the network, whether it’s going to be put into upgauging existing sort of regional routes or whether you’re also going be putting aircraft into markets that maybe you don’t serve on a direct basis today?

The answer is a little bit of both. For high demand 76-seat long range RJ markets, we’re going to -- that will probably be the first selection. That will free the two class RJs to replace 50-seat airplanes that are continuing to exit the fleet and then we’ll certainly have a few new markets next year. We don’t have a lot of new airplanes -- net new airplanes coming, but having 100-seat long range jet does open up some new market opportunity that we don’t have today.

And as we think about maybe the first rollout of that, should we expecting it to be in more [Indiscernible] controlled airports where you can leverage that that upgauge benefit with at a [inaudible] fares, should we be thinking the newer market will be at the front end of the rollout?

Well, the first one’s going to go to New York. I won’t tell you where it’s going go, but it’ll start New York.

Makes perfect sense. Thanks a lot for the time.

Thanks, Dave. That’s going to conclude the analyst portion of the call and I’m happy to turn the call over to Ned Walker, our Chief Communications Officer.

Hey. Thanks very much, Jill, and good morning. Michelle, would you please review the process that members of the media can use to ask a question? Also, I’d like to ask the media if they could limit themselves to one question and a brief follow up. That should allow us to get in as many questions as possible. Michelle?

Thank. Thank you. [Operator Instructions] And our first question we’ll hear from Ted Reed with TheStreet.

… taking the question. You guys noticed there’s been a lot of controversy over the Qatar Airways CEO’s comments about U.S. flight attendants and U.S. airlines. Do you have any reaction to those comments?

Ted, is this Ed. I was appalled to hear Akbar’s comments about our people. I’m told he has apologized, but I think that’s locally inadequate. I think it goes -- there’s a consistent theme there that he continues to want to skirt the rules and play by his own rules and I’m glad the employee is not just of Delta, but of all the U.S. carriers spoke with one large voice to say that it’s unacceptable, inappropriate. We have the best flight attendants in the world at Delta and I’m very proud of them.

Okay. Thank you. Second question for Glen briefly, you said that European business yields are up or the leisure yield is being affected by the explosion in low fare carriers to Transatlantic?

That’s what we’ve said in the comments, is that the strength in business demand has offset most of the leisure yield weakness.

All right. Thank you.

And next we’ll move on to Michael Sasso with Bloomberg News.

Good morning. Can you just -- I heard someone say that there’s, I think, a new policy of allowing Elites to use miles to pick their cabin. Can you just expand on that and is this the first quarter that that’s taking effect?

Yeah. That’s a very exciting new program and as we think about new ways for people to use their miles, we really don’t want them to save them forever. We want them to control their own travel experience and find value in them today as opposed to just storing them away. And so for our highest Elites, we now offer that program. It’s limited to reservations only now, but we’re planning to bring that to the other distribution channels. And when we say continuing to expand all of our products and services to as many distributions networks as possible, I think, that’s indicative of how we see the value that we’re going to create through these products and services expand over the next few years by bringing them to broader and broader audiences, and allowing people to control their own travel experience. And so on a more broad perspective, we’re actually excited about using miles for all ancillary revenues, not just for seat products, but for things like unaccompanied minor fees or pets in cabin and really make that currency come more and more alive to our customer base.

And one just follow up on unrelated topic, there was a report out of India a week or two ago about Delta being interested in Jet Airways kind of investment, were those reports accurate?

Mike, this is Ed. We don’t comment on speculation.

And are you ready to move on to our next question?

We are.

Thank you. And next we’ll hear from Alana Wise with Reuters.

Hi. Good morning, everybody. Thanks so much for taking the question. So I wanted to ask quickly about the Boeing-Bombardier spat that’s going on and I’m curious to know what impact of the decision by the ITC to impose tariffs on the C Series have on your order from Bombardier? And as a follow up, has Boeing’s antidumping petition delayed or had any other impact on potential conversions, sorry, Delta for C Series options to confirm orders? Thank you.

Well, we can’t comment on the dispute that’s going on between Bombardier and Boeing. We’ll let that play out. But what I can tell you is that we have no -- we do not intend to slow down any of the deliveries that we have planned for the C Series. We’ll be taking our first this coming spring and we look forward to taking that aircraft and beyond that I’ll let -- let’s see how the dispute between those two parties comes together.

Thanks so much.

Okay. Right now we don’t have anybody else in the queue for the moment. We’ll pause a second to see if anybody wants to do a follow up. We’ll pause just for a second. And if not, I want to say thank you, Ed, Glen, Paul, Steve and Jill. That concludes the June Quarter 2017 Earnings Call. We’ll be back in October for the 3Q Earnings Call. Appreciate everybody’s time today and hope everyone has a pleasant day. Thanks so much.

And that will conclude today’s call. We thank you for your participation.