Good morning everyone and welcome to the Delta Air Lines December Quarter End Full Year 2019 Financial Results Conference Call. My name is Shannon 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 Shannon. Good morning everyone and thanks for joining us on our December quarter end full year call. Joining us from Atlanta today are our CEO, Ed Bastian; our President, Glen Hauenstein; and our CFO, Paul Jacobson. Our entire leadership team is here in the room with us for the Q&A. 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. [Operator Instructions] Today's discussion does contain 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 our SEC filings. We'll also discuss non-GAAP financial measures. All results exclude special items unless otherwise noted and you can find a reconciliation of our non-GAAP measures on the Investor Relations page at ir.delta.com. And with that, Ed?

Thanks, Jill. Good morning, everyone. We appreciate you joining us today. Earlier Delta reported our full year results including a December quarter pretax profit of $1.4 billion which is up $240 million compared to last year. Our EPS in the quarter increased 31% to $1.70 with pretax margins expanding 140 basis points to 12.4%. The December quarter performance was a great finish to what was truly an outstanding year on all fronts. Strategically, with the American Express renewal and the announcement of LATAM and Wheels Up partnerships, operationally with best-in-class completion factor and on-time performance, and financially with industry leading revenue profits and cash flow. 2019 was the best year in our history. The top line grew 7.5% to $47 billion, positioning Delta as the largest carrier by revenue in the world. We delivered $6.2 billion in pretax income, an improvement of more than $1 billion over 2018, setting a new record for Delta and the U.S. airline industry. Full year earnings per share improved 30% over the prior year and we generated $4.2 billion of free cash flow with $3 billion returned to owners. These results simply would not be possible without the incredible work of our Delta team. I am pleased we'll recognize our employees' performance in 2019 with $1.6 billion in profit sharing. This marks the highest profit sharing in Delta's history and is the sixth consecutive year of $1 billion or more in profit sharing. We could not be happier for our people. For our customers, we continue to run the world's most reliable airline. We ended the year with 165 cancel-free days across the entire Delta branded system with 281 zero canceled days on our mainline operations, representing an entire month's worth of improvement over the record performance that we set in 2018. Recently, Delta…

Thanks, Ed, and good morning. First, I'd like to thank the entire Delta team for delivering a record year in 2019. It's their hard work that enabled $47 billion in revenue, an increase of more than $3 billion over prior year. The 7.5% growth was broad-based with strength in both business and leisure, improvements in domestic and international, and double-digit growth in loyalty and MRO. Total unit revenues improved 2.8% sustaining our revenue premium to the industry of more than 110% and outpacing non-fuel unit cost growth of 2%. We continue to diversify the top line with 53% of our revenue generated by premium products, loyalty and other non-ticket revenue sources. Premium product revenue grew 9% in the year to $15 billion. We've continued to improve and invest in the premium experience and we are seeing increasing product affinity. On average 70% of customers that fly in premium products purchase an equal or better product on a future trip. We are providing SkyMiles Members more options to use miles anywhere they can use cash with Delta. Since launching, upsell with miles a little over a year ago 1.2 million customers have redeemed miles, contributing $135 million of incremental revenue and we continue to expand capabilities, most recently with the ability to pay for bag fees using miles. Brand preference for Delta is stronger than ever. We are seeing momentum in customer satisfaction scores and in 2019 Business Travel News named Delta, the world's best airline for business travel for the ninth year in a row. More customers are choosing to interact directly with us with 52% of trips purchased directly from Delta during the year. Digital is our fastest-growing distribution channel. Mobile revenues grew by 35%, driven by an active user base of over 24 million customers. Total loyalty revenues…

Thank you, Glenn. Good morning, everyone, and thank you also for joining us. In 2019 we delivered pre-tax income of $6.2 billion more than $1 billion improvement versus prior year and over $300 million higher than Delta's prior record. Pre-tax margin expanded by 160 basis points to 13.2%. Earnings grew 30% to $7.31 per share. Cash flow was also a key performance highlight. We generated over $4 billion in free cash flow while continuing to invest in our people, our fleet, our partners, and technology. These investments are generating strong returns with an after-tax return on invested capital of 16.2% in 2019. This represents nearly 500 basis points of improvement since 2010 all while doubling our invested capital base. In the December quarter, pretax margin expanded 140 basis points to 12.4%. This was above guidance on stronger unit revenue, lower fuel, and a net $80 million gain that resulted from selling our stake in GOL and beginning to unwind our relationship. Excluding this gain, pretax margin grew 70 basis points and earnings beat consensus by approximately $0.21. While total expense grew 6.9% in the quarter half of that growth was due to pension expense, the markup of benefit-related balance sheet obligations, and profit sharing from the growth in profits. These cost increases were partially offset by lower fuel expense which declined $370 million, primarily on lower market fuel prices. Non-fuel unit costs were up 4.4% in the quarter in line with our guidance. For the full year, non-fuel unit cost came in at 2% consistent with our long-term target, despite the pressures we saw in the back half of the year. For the March quarter, we expect non-fuel unit cost to increase 2% to 3%. While fuel has been volatile over the last month, based on yesterday's price, we expect…

Thanks, Paul. Shannon, we're ready for the question-and-answer period with the analysts, if you could give some instructions on how to get into queue.

[Operator Instructions] And our first question will come from David Vernon of Bernstein.

Hey, good morning, guys. Thanks for the time. So, Ed as you think about the decision to sort of accelerate the investments in technology and the experience maybe even going after some adjacent revenues in rideshare through partnership and that kind of thing is this – are these activities going to be funded kind of within the existing capital envelope? Or do you expect Delta to kind of maybe spend a little bit more over the next couple of years as you look on kind of executing the vision you laid out at CES?

Hey, David. David, thanks. Yes. The capital that we spoke of at CES and the technology that we displayed is within the envelope that we've been working with in technology. One of the things that we've done over the last several years is upped our investment in technology, and we're now on a capital level running at about $500 million a year in technology. However, for the first couple of years of that, a lot of it was focused on infrastructure and resiliency and the data sets in data architecture that's now finally starting to be able to produce the type of technology and innovation that you're seeing. And so it's going to be more heavily weight going forward towards business and commercial application as compared to infrastructure. But it sits within the envelope we've been using.

And maybe just as a quick follow-up as you think about the return on this incremental investment is this going to be sort of a gradual enhancement to the revenue premium that you earn? Or do you see some sort of step changes in opportunity along the way whether it's material cost out or revenue opportunities kind of within the next three to five years?

I think it's both, David. Certainly the revenue opportunities are significant we do go through in this past year. We looked at what we thought our digital investments and new product offerings this year generated and we estimate about $200 million of incremental revenue, whether it be using SkyMiles as a currency to upsell, the new-generation shopping and booking tools that we have. Opportunities also sit on the cost front with better decision support in IROPs and optimizing the fleet and making certain that we're able to ensure that our crew are best utilized and any downtimes are minimized. And I could go on there's a long list of opportunities that we have. So I think it's going to be both a cost opportunity as well as a strong enhancement to the brand as we build closer and closer digital connections with our customers, 204 million customers a year. The only way you can build that connection with them at the personal level that they choose is digital and we're off to a great start.

All right. Thanks, guys.

Our next question will come from Helane Becker of Cowen.

Thanks very much operator. Hi, everybody and thank you very much for your time. Glenn, I know you said that you're seeing strong demand on the corporate side and I'm sure that's true. But I'm starting to hear from some companies that they're thinking about cutting expenses and asking their employees to rethink some travel and I'm wondering if you're seeing any signs of that among your top corporates? Or if you could just mention maybe where you're seeing the strength, if it's a particular industry group?

No, I think we're seeing strength across the board. And we've heard this from time to time that people are worried about corporate spend and travel but it seems to be in a very good position as we head into 2020. And as a matter of fact, last year we did see a little bit of weakness in manufacturing but we're starting to lap that and we're starting to see some positive momentum coming out of that sector. So generally, we're seeing some very good signs from our corporate.

Yes I think the only thing I'd add to that Helane, this is Ed, is we're certainly seeing some weakness as Glenn touched on in Asia with China issues and some of the tariff discussions that's bled over into Korea and a few of the other Asian economies. But fundamentally Glenn's right, the health of our businesses in the U.S. and the U. S. corporate is doing quite well.

Okay, okay. Thank you. And then just as a follow-up to that. Would you rather see faster growth in leisure traffic or faster growth in corporate traffic?

We've experienced both. I think we like them both equally. And I think what in leisure is really – what we're seeing in leisure really is an interesting separation of people who are looking for quality and willing to pay higher fares or upsell into better products and services at the highest quality airline in the U.S. So we see an increase in yields, in leisure which is very good for the industry.

Right. So what you're seeing is leisure travelers buying up and fewer people in that basic economy bucket, is that a way to interpret your comment?

That's a way to look at it.

Okay. All right. Great. Well, okay, thanks very much for your help. I appreciate it.

And our next question will come from Hunter Keay with Wolfe Research.

Hey, good morning. Thanks. Helane, just segued nicely into my question actually. You mentioned leisure seeking quality. Glen, is there a point where you view basic economy as being brand dilutive to the point where maybe it doesn't really fit the Delta concept anymore as you guys try to focus on that higher quality?

I think from the beginning we've been really clear that we want to have the best-in-class products and services no matter what your travel needs are. And I think we would always see for entry-level customers who are only sensitive to price that we would have best-in-class there. As a matter of fact you might think that our overinvestment is highest in basic economy, but that's the entry point. And once they see the quality of service the Delta people provide I think they stay with us throughout their entire life cycle. And that's an important product for us to continue and maintain.

Okay. And then if you think big picture take a step back for a second, think over the next five to 10 years, would you ever get so comfortable with your loyalty and value proposition to intentionally drive down your load factors, just a few points with an eye on driving RASM pretty much entirely through driving the yield premium, which -- so the idea would be really you change the overall feel of the flying experience with less crowds and less pricing volatility to really truly differentiate yourself as a premium brand and feel airline?

I think we're always looking at what that is. And I think we've taken steps really structurally. Let's say we invented comfort plus in the domestic arena. I think what we would see maybe is the continued adoption and demand for that product builds over time that we might create more of that on existing fleets, which would take the density out. I can't see us ever wanting to fly with empty seats. I can't see us wanting to sell a plane that is meeting the demands of our customer base that might include more premium even than we have today.

Okay. Great. Thank you.

Our next question will come from Andrew Didora of Bank of America.

Hi, good morning, everyone. I actually had a follow-up question on the tech investments. I guess the $500 million you're spending on tech CapEx, how do you think about the ROI needed on that spend relative to say on a new plane order or plane refresh?

Well, Andrew we need to do both, right? This is not -- we're not trading off technology for planes. So we need to have continued enhancement of our fleet. That's clearly where the bulk of our CapEx goes is into our fleet and the modification of our aircraft. We're going to be taking 80 new airplanes into the fleet this year. And those -- but those fleet investments are also then facilitating technology as we bring new technology on board the fleet. So I don't look at them as differentiated or trade-offs. We've got an overall CapEx budget that we look at as a company. We try to stay within the 50% threshold plus or minus of operating cash. And that's how we get there. Now we do certainly look at ROI and returns on every one of our digital investments and capital initiatives. And I'm pleased to say they've been producing largely the results we'd expect.

Great. Thank you. And Glen I know in the press release and you've been breaking out the domestic results by both core hubs and coastal hubs. As you think about growing your network over the next one to two years, what segment of those do you see the biggest capacity opportunities in? And then as a follow-up can you just -- I assume the core hubs are Atlanta, Detroit, Minneapolis, and Salt Lake, but do you see any of the coastal markets moving into the core bucket anytime soon? Thank you.

Well, I think they're core; they're just not geographically centered. So, your ability to connect traffic when you're in Seattle is a lot less than when you're in Salt Lake City or Atlanta or the other ones you named. So, we have really used our first-mover advantage post-merger to take advantage of having the opportunity to consolidate positions in some of the key coastal markets like Seattle, Boston, Los Angeles, New York. But we did that a little bit at the expense of growing connectivity in our interior hubs. And so over the next several years, we'll be working on continuing to improve the products and services we offer at the coastal hubs, but really refocusing a little bit on growing the interior hubs to improve the connectivity of the airline.

Great. Thank you.

Our next question comes from Michael Linenberg of Deutsche Bank.

Hey, good morning everyone. I guess just two quick ones here. Paul I just want to make sure I heard you right the LATAM running that through the P&L. I know it closed late in the fourth quarter, but I guess nothing really shows up in the fourth quarter. Is it beginning in the March quarter, did I hear you right on that?

That's correct Mike. Beginning in the March quarter.

Okay. And then with respect to getting to the 20%, as I recall, I don't know if there was a sort of the conversation about whether or not it was going to be one or two board seats. Do you have a better sense? Do you know whether or not you have two board seats at LATAM as a result of that? Has that been figured out?

Yes. We have two board seats Mike.

Okay, great. Great quarter. Thank you.

Thank you. Thanks Mike.

And we'll now hear from Jamie Baker of JPMorgan.

Hey good morning everybody. First question for Glen and it's a follow-up to a topic that we discussed last quarter regarding the potential to generate an international RASM premium at some point. I'm curious if the fourth quarter results or the first quarter outlook shows any progress in this regard. And secondly does the full year guide have any specific assumptions? Or should we treat any potential evidence of an international RASM premium as upside to the guide?

I think we're continually working to improve our international unit revenues and I think this fourth quarter was -- we're moving in the right direction and we see those trends continuing into the first quarter. We can't see yet what our competitors are doing, but I think we have an opportunity to continue to increase our relative performance and our absolute performance as we go through 2020 and hopefully beyond what we have in our plan.

Okay. Second for Ed. It's related to ESG. I know you spoke about the topic at Investor Day; you gave some examples of Delta's environmental consciousness. I'm not sure if you saw Larry Fink's letter this morning. I mean what I keep struggling with on this topic is fleet. We've commended your fleet strategy for some time now specifically running a higher average age than your competitors. I just have to wonder if we're on the cusp of that possibly coming back to haunt you and whether ESG compliance necessitates bringing the fleet age down which in turn has CapEx implications. I'm not quite sure how to phrase the question, but how would you respond to somebody telling you that your fleet strategy is incompatible with growing ESG mandates? How about that?

It's an interesting way to put it Jamie. Listen, we take our ESG and very specifically our environmental and sustainability requirements and goals to heart. And hopefully you heard me not only at the Investor Day but also at CES I closed on that topic specifically. It's something that fleet plays a big part of candidly being somewhat of having an older our fleet actually has given us opportunities to move faster in that space maybe than others, every plane we put in. And we're putting in 80 new planes are 25% more fuel-efficient than the planes that we're retiring. We at Delta we're the only airline back in 2012 that voluntarily capped our carbon footprint at 2012 levels. No other airline has done anything like that. We're looking at ways by which we can go even more aggressively. Fleet is only – fleet is an important part of the solution, but there is many more things to this in terms of how we engage. And I think you're going to be hearing us talk more and more about that over the course of the year. I didn't get a chance to see Larry's letter though I did hear a little bit about it this morning. And I think – his message is right.

That's helpful. I really appreciate it. And I know it's been a busy morning. I wasn't calling you up for not having seen the letter yet. You got bigger things to deal with. Thanks again great quarter. Bye-bye.

Thanks, Jamie.

And our next question will come from Duane Pfennigwerth of Evercore ISI.

Hey. Thanks for taking the questions. Can you clarify your revenue growth guidance versus your RASM guidance into the first quarter? It feels like based on what schedules are showing the implied RASM guidance is flattish, whereas your explicit RASM guidance is up one. Is that just a lower refinery year-over-year? Or what accounts for that difference?

Hey, Duane, it's Jill. The refinery sales are slightly lower year-over-year, but we exclude those from TRASM anyways. And so I think you're just – they're scheduled. There's a completion factor adjustment you have to make to schedule, but the revenue growth that we're looking at is a solid 5% to 7% in the first quarter, the total revenue growth.

Okay. Great. And then just on the pension, I understand you expect a tailwind this year. But can you just talk explicitly about what pension expense was in 2019 and what you expect it to be in 2020? Thanks for taking the questions.

Yeah. So, thanks Duane. We had mentioned going in that we had about $250 million of pressure year-over-year in 2019 as a result of the pension returns in 2018. While we haven't given specific guidance we – if you look at year-over-year, we were up about I think 16% in 2017. So, you can look back and see the sensitivity around that.

Okay. Thank you.

Our next question will come from Joe Caiado of Credit Suisse.

Hey. Thanks very much. Good morning, everyone. My first question just on the LATAM partnership, apologies if I missed it and Glen, you may have talked about it, but I think the code share with some of the affiliates slated to begin here in Q1. Can you just give us an update on where you are with those government approvals and when in Q1 you think you can launch that? And just as a quick follow-up to that, is there a rough estimate that you could share with us on expected 2020 revenue contribution from LATAM?

I'll start with the first one, which is easier is that. No we're not going to share that today. And the second issue it's by country. And I believe this week we received the ability to code in Colombia. We expect Peru and Ecuador to follow shortly. And then the longer – a little bit longer tent in the pole. So those should all be up and running like in 1Q. A little bit longer pole in the tent is Brazil and Chile, which we expect later this year.

Got it. Thank you for that. And then just a quick one for Paul on CASM-Ex, your Q1 guidance right in line with the full year. Should we expect that to be fairly level loaded through the year? Or are there any big sort of moving pieces that you expect in the year that could drive some quarterly swings in that 2% to 3% trajectory?

Yes, Joe what I would say is we're obviously not going to give quarterly guidance on CASM for the rest of the year. But as a general rule, if you look at our CASM trajectory in past years it's been pretty skewed with a lot of volatility. We've taken a conscious effort in 2020 to try to balance that across to make that cost performance more disciplined throughout the year and that's very intentional.

Okay. I appreciate that. Thanks, everyone.

Our next question will come from Brandon Oglenski of Barclays.

Hey, good morning, everyone and congratulations on a pretty impressive quarter. So Paul, you guys have had really strong cash flow here. And not to be too much of a cheerleader but it is a differentiated experience on your carrier. So I guess, is there any positive momentum here in CapEx, where you'd say, hey actually we want to spend a little bit more? Does it reprioritize fleet over the airport trends over technology or maybe strategic? Or do you want to stay with this very balanced capital allocation strategy?

Well, first of all thank you for the comments Brandon. I think the balanced approach has worked very, very well for us in an effort to balance multiple constituencies, whether it's cash flow performance into the enterprise but driving return on invested capital. We obviously have a lot of demands on capital when you look across the space and the things that we want to do. Prioritization and pace of implementation is an important piece of that. It's not always just capital. It's having the resources to deploy that capital and make sure that it's delivering the benefits and the results. So while I'd say we do have – we do have some room around the edges, you've seen us do that over time, take advantage of opportunities that are out there. We want to hold roughly to that balanced allocation over time.

Brandon, I could weigh in also it's Ed. I'd say, if there was any area that we'd look if we had opportunities to accelerate somewhat, it's in the airport infrastructure and construction. We're in the midst of a very significant buildout. And clearly the sooner we can get that done the better. So not suggesting that we're going to change any CapEx assumptions but to the extent we had any capital that was available to be allocated that would be one place I look for using it.

Okay, everyone. Thank you.

And we'll hear next from Savi Syth of Raymond James.

Hey, Glen. Good morning, everybody. Glen I just wanted to ask a little bit more on the regional trends. At LATAM, you had a tougher comp versus 3Q but the performance is still pretty good. I'm just wondering as you, kind of, look forward, generally what are you seeing from a trend perspective? And is there any kind of region where we start to come on tough comp?

So, we're seeing continued strength in the domestic U.S. arena. That's great news for us. And we're seeing I think some really good green shoots in the transatlantic. We've had currency issues over the last couple of years since 2018. And now that we're going to be lapping them as we move through this year, I think we're poised really well for a nice run in the transatlantic. We've seen in the trans-Pacific after a multiyear restructuring that this is the last piece and there's some uncertainty maybe around the airport moves that we are going to have. Those are two major airport moves for us closing Tokyo and Narita after being there for almost 50 years. That's a big move. And so uncertainty over how many people will prefer Haneda. But I think ultimately we are very, very confident that Haneda is a better airport to serve Tokyo than Narita. And so there may be some ripples there that it would be unique to us as we have the largest footprint in Haneda. And then, of course, moving to Daxing and Beijing might be a little bit of a headwind for a short period of time. But again we think that's the right move for us because the connectivity at that airport is going to be far superior in the long run towards our capital. So the Pacific I think we're encouraged at the signs. Today's signing or the signing of the agreement phase one agreement with China is going to be a good thing for us. And if there is an upside to the Chinese, there's been really no capacity to bring capacity reductions in the U.S. to China for the first time in years. So traffic continues to build into China and capacity is being reduced. So that's always a good thing for the airline industry. And then in LATAM, we've seen really good strength in both Mexico and Brazil and we expect that to continue and then accelerate as we can begin to code with LATAM throughout the year. So I think we've got a really good base for international, which is encouraging. And the sequential trends and the improvements are all moving in the right direction for us.

That's very helpful. Thank you. And Paul if I could quickly ask just on trainer, generally what you're expecting especially now that IMO 2020 has come and gone. And just some quick thoughts on what your expectations are for Trainer and steel in general?

Sure Savi. So 2019 saw Trainer produced a profit at $75 million free cash flow positive and really a strong contribution to our overall relative fuel story. In 2020, obviously, we've seen at least where we sit today significant improvement in crack spreads at the refinery over last year. We expect about breakeven performance compared to about a $35 million loss last year. So we're looking forward to another sizable contribution overall both in terms of the performance of the refinery as well as the contribution across the commercial space and our fuel procurement.

Thank you.

And our next question will come from Myles Walton of UBS.

Thanks. Good morning. A lot has changed in the month since the Analyst Day on the Max continued push out there, shut down the line likely a slower delivery rates. So I'm curious as you look at your place in the ecosystem, are you taking a lot of active decisions to capture some of that? Or is this more of a view to benefit through pretty much passive behavior let it come to you? I'm just curious, how much active management you're thinking about versus simply having the premium revenue come your way? Thanks.

Myles this is Ed. We've all been watching the MAX story for the last year and none of us have a very good crystal ball. We're operating our plan. We're not deviating on the plan based on news flow. We have a strong plan for 2020. And to the extent we pick up some marginal revenue which we clearly have this year that's great. Again, I would caution everyone I would not suggest that's premium revenues that we're picking up because I think the other airlines have done a very nice job of covering their most important revenue pools. But on the margin, we've clearly been a beneficiary and as long as the MAX stays out of the sky, I guess, we'll continue to be one.

And a follow-up on the MRO benefit you might get from further aftermarket work running hot what's the growth rate? I know you said deceleration what's the growth rate you've got baked in for 2020?

Growth rate in 2020?

Yes.

I don't think we disclosed that. What we've talked about really as longer term. There is some growth but the big growth story in the MRO is a couple of years out. And for gear turbofan platform and the roles platforms start to enter more service and start to mature that's where we do expect the MRO revenues to double over the next two to three years from today's level.

Okay, thank you.

Shannon, we're going to have time for one more question from the analyst community.

Certainly. We'll take our final question from Stephen Trent with Citi.

Good morning everybody and thanks very much for taking my time. Just first you mentioned your Amex credit card growth through 2023. To what degree should the revenue growth be driven by the new brands you're introducing?

We don't disclose the makeup of the construction of the increases. But what we have said is that we expect it to grow from $4.1 billion this year to $7 billion by 2023. And we have a very good component plan. I think we outlined the three pieces that include card spend growth, that included new acquisitions, and any changes in the core contract. And those three make up those components.

Okay, very helpful. And just one quick follow-up as a follow-up to Mike Linenberg's question away back. When you think about LATAM airlines, are there any things that you see in the business that perhaps at this very early stage are a little stronger than you expected or maybe a little bit more challenging than you expected? I appreciate you might not be able to give us much color, but I just thought I'd ask.

No, these are the very early days and we are very, very excited about that partnership and we think it's going to have great long-term benefits. We can only see a little bit as the relationship is just starting and we're just starting to put some of the key components in place with interline agreements. But what we have seen has exceeded our expectations in the early days and we're very optimistic that this is going to be a game changer for us in Latin America.

If I could echo Glen's comments we're very impressed with the leadership team at LATAM. Cuetos, Roberto, the entire team is a first-class group. I think we're going to find as we start to build out the JV with the appropriate regulatory approvals you're going to see this spool up faster than probably any of our other JVs. There's really good alignment. There's focus and there's a lot of growth opportunity for both carriers throughout the Americas. So we're very, very pleased.

Okay. Thanks very helpful. I’ll leave it there. And thank you again.

Thank you.

That's going to wrap-up the analyst portion of the call. And I will now turn it over to Tim Mapes, our Chief Marketing and Communications Officer.

So we have a few more minutes with the team, I'd reiterate Jill's comments earlier to please just hold your questions to one maybe a short brief follow-up then we'll try to get through as many of these as we can. Thank you.

[Operator Instructions] And our first question will come from Leslie Josephs of CNBC.

Hi. Good morning. Thanks for taking the question. On the investments on tech, do you guys see Delta becoming sort of a travel platform like for corporate travelers sort of like an AmEx or a Concur something like that? And then my second question, if you just have any update on what's going on with the pilots and mediation. Thank you.

Leslie on your first question we absolutely do see ourselves as becoming an extended travel platform. We're not going to be looking to get in the TMC space or compete with outfits like Concur. But what we are doing is from a consumer standpoint, looking to continue to extend the brand using the Fly Delta app as more of a digital concierge bringing partners such as Lyft closer into the application, so making it easier for our customers to have an end-to-end experience through travel on the Delta app and all the way through hotel partners and other – other ways by which we can take stress out of the consumers experience. That was the message at CES, and I think it was received well and that's where we're going. We're not going to comment on pilot negotiations. So I'll pass on your second question.

Okay. And just on the apps that's more for individual consumers not corporate platforms – corporation rather?

This is very much focused on individual consumers. There is clearly some corporate benefits, but right now we're really focused on serving all customers.

Okay. Thank you.

Our next question will come from Mary Schlangenstein of Bloomberg News.

Hi. I just wanted to try again on the pilots. Would you at least confirm whether or not you're seeking intervention by the National Mediation Board in the negotiations?

We are not going to comment on the state of any negotiations with the pilots on any questions. Sorry, Mary.

Okay. Thank you.

We think just to clarify. We think it's not appropriate to be talking publicly about it. It's a – obviously it's a great opportunity for us and our Delta pilots to work together to make sure that they're best compensated and rewarded for what they do.

And our next question will come from Ted Reed of Forbes.

Thank you. My question is for Glen. I imagine that the 10% coastal growth in hubs, includes Boston and I'd like to know, if you anticipated that American would star to grow so fast in Boston they're growing very rapidly there and they added three new routes this morning.

Yeah. I think we've had an incredible success in Boston and Boston, customers are choosing us at – as a matter of fact the third quarter data from the government just came out and we were in a virtual dead heat with Jet Blue as the largest revenue carrier in Boston. So I think we've made great progress and I think customers will stick with us. And so we'll see who ultimately are the winners and losers in Boston. But I know we'll be a winner.

Do you anticipate that American might start to grow there?

I don't know what anybody else is going to do. And so this is a very competitive industry and people grow and shrink. And I think that in the long term the better products what we've consistently said what is as long as we think we can provide the best products and services we're ultimately going to win.

All right. Thank you.

And our next question will come from David Slotnick of Business Insider.

Hey, everybody. Thanks for taking my question. I was just wondering if you're starting to think about the 757 replacement. Are you waiting on Boeing's offering for the NMA? Or are you starting to consider the 321 XLR?

David, we have spoken many times on that topic. We are looking at the NMA. Certainly we're looking at Airbus offerings. We're not close to any decisions on that yet.

Okay. Do you have a timeline or anything that you're anticipating having to replace those planes?

We have not commented on timelines even.

Okay. Thanks very much.

And we'll hear next from Robert Silk of Travel Weekly.

Yes. So Ed you spoke a lot. At CES you put out a lot of technology, really exciting stuff. But I wanted to ask about maybe some of the things that aren't quite as exciting. For example, can you update me on your -- what -- how you're coming in distribution technology improvement? Also any improvements to just your core system Atlanta and also your PSS?

I'm sorry. Your question broke up. Could you simplify maybe. You had a lot in there. We had a hard time hearing?

Yes, can you hear me now?

Yes.

Your distributions technology PSS and also just improvements to the core – your core systems, how much are you investing in that? And how is that coming along?

Well, clearly we've been investing a significant amount of money on trying to continue to improve the digital experience and the distribution system and giving customers more choices and more ways to interact with us more optionality. We have continued to release the new updates of delta.com. And I believe we are now at 7 million downloads just this past year on the app. So we continue to evolve in that space and we continue to work with all of our partners and continue to work on making sure that the distribution systems are capable of describing the products that we're trying to sell to our customers, which really can't be done any longer in green screens. So that's been a continual evolution and we've been working with all the partners the GDS's and all the distributors of our products and services to try and highlight what the differentiated products are that we're bringing to market.

Okay. Thanks. And anything else related to the core systems or the – or PSS improvement?

We can. Could you repeat that? Had a hard time hearing you.

I'm sorry. Anything else related to any additional improvements with the PSS or the core systems?

Well, I think – this is Rahul Samant. I'm the CIO here. And we do, I mean that is our core engine the PSS Deltamatic, which we own. We have an advantage because we own it. We control the entire experience. And to Glen's point, it allows us then to do better with the customer experience and channel improvement because we own the end-to-end technology.

Okay. Thank you all.

Yes. We have time for one final question.

And our final question will come from Dan Reed of Forbes.com.

Glen, you guys obviously are gaining share in the above average yield the premium segment. Where can we look to see data that actually shows competitive data or competitive metrics where you guys are gaining the premium share? It's hard to put a finger on that number.

Well, there's a lot of data points out there. There's no shortage of data in this industry. Most recently the U.S. government data came out for the third quarter. That's always about 180 days in arrears here or 90 days in arrears. So we did really well. And I think you could look at that. You could look at GDS's, you could look at corporate shares. So there's plenty of data. And if you'd like we could have somebody follow up as you run places you can go find that.

Please. But what is it? Is it just -- you're selling quality is the government -- the premium share gain?

I think the Delta brand is really about providing the best quality airline service in the world and we continue to emphasize that and focus on that. And we have 80,000 of the world's best people delivering it every day.

Okay. Thank you.

With that, I will wrap up this call. Thank you, operator. Just to remind everybody we'll see and look forward to being with everyone on the next call on April 9th. Thank you again for your time today.

And that does conclude today's teleconference. Thank you all for your participation.