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About Comair Holdings, LLC

Delta Air Lines is one of the world's largest airlines by traffic. Through its regional carriers, the company serves about 300 destinations in about 50 countries, and it operates a mainline fleet of 800-plus aircraft, as well as maintenance, repair, and overhaul (MRO) and cargo operations. The airline serves more than 180 million customers each year and offers more than 15,000 daily flights. Delta is a founding member of the SkyTeam marketing and code-sharing alliance (airlines extend their networks by selling tickets on flights), which includes carriers Air France, KLM, and Alitalia. Customers from the US account for approximately 70% of sales.

Operations

Delta divides its operations into two chief segments: airline and refinery. The airline segment, which accounts for 90% of Delta's sales, provides scheduled air transportation for passengers and cargo throughout the US and around the world and other ancillary airline services, including maintenance and repair services for third parties.

The refinery segment provides jet fuel to the airline segment from its own production and through jet fuel obtained via agreements with third parties. The costs included in the refinery segment are primarily for the benefit of the airline segment.

By product type, economy/coach tickets accounts for about half of total revenue, while business cabin and premium tickets generate about 30%. Loyalty travel awards, travel-related services, cargo, and other services accounts the remainder. 

Geographic Reach

Atlanta, Georgia-based Delta operates from hubs in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, São Paulo, Seattle, Seoul-Incheon and Tokyo-Narita. The US market is its largest, representing about 70% of net sales.

Delta directly owns an oil refinery in Pennsylvania, operated by subsidiary Monroe Energy. Monroe, which supplies a large chunk of Delta's jet fuel, is loss-making and Delta execs are having a hard time finding a willing buyer. 

Sales and Marketing

Delta's tickets are sold through various distribution channels including telephone reservations, Delta.com, and traditional brick and mortar and online travel agencies. Delta annual advertising budget is around $270 million.

Financial Performance

Aside from a slowdown in 2016, Delta Air Line's revenue has been growing steadily. In 2018 sales growth accelerated to 8%, Delta's best performance by far for a number of year. Total revenue of $44.4 billion was boosted by higher passenger revenue in all three regions (Atlantic, Latin America, and Pacific) and growth in the aircraft maintenance business and loyalty program. High points were strong yield (revenue per mile) growth in Europe as it leveraged its alliance partners hubs in Amsterdam, London, and Paris, while its Latin America recovered after a particularly bad hurricane season in 2017.

Delta's net income grew 23% to $3.9 billion but remains below levels reported in 2016 and 2015. The increase in 2018 arose from a much lower tax expense in 2018, partially offset by a decrease in operating profits as expenses (particularly fuel) grew faster than sales. Fuel costs can vary year-by-year and represent around a fifth to a quarter of Delta's annual costs. Intense competition in the airline industry means Delta cannot always pass on higher fuel prices to customers, impact the bottom line. 

Delta's cash position strengthened during 2018, ending the year $895 million higher at $2.7 billion. It generated $7.0 billion from its operations, while investing activities used $4.4 billion and financing activities used $1.7 billion. Delta's primary cash uses during the year were investments in flight equipment and ground property, long-term debt repayments, stock repurchases, and dividend payouts. 

Strategy

The airline industry is fueled by strategic alliances that allow individual carriers to extend their service without physically flying into new territory. Delta's alliance with SkyTeam extends the airline's reach to more than 900 destinations in 170-plus countries around the globe. The company gets a boost in global coverage with airlines around the world coming aboard the SkyTeam alliance. Delta has five joint ventures with foreign carriers. 

To boost its position in the important region of China, Delta acquired a 3% stake in China Eastern, one of the leading airlines in China. The move allows Delta and China Eastern to compete more effectively on routes between the US and China and provided more travel options for customers in both countries.

Looking to Europe, Delta has joint ventures with Air France-KLM and Alitalia, and plans to build its presence in its strategically advantaged hubs in London, Paris, and Amsterdam, while de-emphasizing higher Europe point-of-sale markets. It also holds a 49% equity investment in Virgin Atlantic, which improved its presence in London, one of Delta's largest revenue markets from the US.

Targeting the Asia/Pacific region for growth, in 2018 Delta and Korean Air formed a joint venture, creating a combined network serving more than 290 destinations in the Americas and more than 80 in Asia. The increase in scale between the carriers includes expanded codesharing in the trans-Pacific market, joint sales and marketing initiatives in Asia and the US, and co-location at key hubs.

Delta also has JVs with Virgin Australia, serving Australia and New Zealand, and Mexican airline Aeroméxico, which includes a joint MRO operation in Queretaro (in addition to trans-border flights between the US and Mexico). 

Strong demand and investment in its operations led to Delta upgrading Boston airport to hub status, only the second airport after Atlanta to achieve that designation on the East Coast of the US. Capacity through Boston will increase roughly 15% in 2019, serving Amsterdam, Dublin, Edinburgh, Lisbon, and London. The move will ruffle feathers in JetBlue's boardroom, which has a roughly 30% share of Boston traffic.

Comair Holdings, LLC

82 COMAIR BLVD
Erlanger, KY 41018-1212
Phone: 1 (859) 767-2550

Stats

Employer Type: Privately Owned
Executive Assistant: Evelyn Smith
Employees (This Location): 4
Employees (All Locations): 7,200

Major Office Locations

Erlanger, KY