DELTA AIR LINES, INC.

Delta Air Lines, Inc. operates as a global airline based in the United States, connecting customers across an expansive global network. In 2025, the company served over 200 million customers. The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules, operational reliability, services, products, customer service and loyalty programs. Consolidation, international alliances, immunized joint ventures and subsidized government-sponsored international carriers have shaped the competitive landscape, resulting in airlines and alliances with significant financial resources, extensive global networks and competitive cost structures. Delta competes domestically with traditional network carriers including American Airlines and United Airlines, national point-to-point carriers including Alaska Airlines, JetBlue Airways and Southwest Airlines, and other discount or ultra-low-cost carriers including Allegiant Air, Frontier Airlines and Spirit Airlines. Internationally, Delta competes with both foreign and domestic carriers, including from point-to-point carriers on certain international routes, and through alliances such as SkyTeam, the Star Alliance and the oneworld alliance.

Delta's primary competitors named in the filing include American Airlines, United Airlines, Alaska Airlines, JetBlue Airways, Southwest Airlines, Allegiant Air, Frontier Airlines and Spirit Airlines. The company's stated competitive advantages include its people and culture, operational reliability, global network, customer loyalty and financial foundation. Delta was named North America's most on-time airline of 2025 by Cirium for the fifth consecutive year. The company's award-winning SkyMiles program is designed to attract lifetime members and grow customer loyalty. Delta is rated investment grade by each of the three major credit rating agencies.

Delta generates revenue primarily through scheduled air transportation for passengers and cargo. The company's revenue mix includes passenger ticket sales (main cabin and premium products), loyalty travel awards, travel-related services, cargo, and other revenue streams such as refinery sales to third parties, loyalty program brand usage, ancillary businesses (MRO and vacation packages), and miscellaneous items (lounge access, travel products, codeshare agreements). The SkyMiles loyalty program is a key component, with customers earning miles through travel and participating companies. The most significant contract to sell miles relates to the co-brand credit card relationship with American Express. The company also generates revenue through its Maintenance, Repair and Overhaul (MRO) operation, Delta TechOps, and its vacation package subsidiary, Delta Vacations.

Delta's passenger revenue is broken down into ticket revenue from main cabin and premium products, loyalty travel awards, and travel-related services. In 2025, ticket revenue from main cabin was $23.391 billion ¹, ticket revenue from premium products was $22.097 billion ², loyalty travel awards were $4.237 billion ³, and travel-related services were $2.043 billion ⁴, for total passenger revenue of $51.768 billion ⁵. Cargo revenue was $900 million ⁶. Other revenue includes refinery sales of $5.077 billion ⁷, loyalty program revenue of $3.362 billion ⁸, ancillary businesses of $937 million ⁹, and miscellaneous revenue of $1.320 billion ¹⁰, for total other revenue of $10.696 billion ¹¹. The MRO business generated revenues of $822 million ¹² in 2025. The company's fleet consists of 1,314 aircraft ¹³ as of December 31, 2025, including 989 mainline aircraft and 325 regional aircraft operated on its behalf. The company's domestic network is centered around core hubs in Atlanta, Detroit, Minneapolis-St. Paul and Salt Lake City, with coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. Internationally, Delta has significant hubs or market presence in Amsterdam, Bogota, Lima, London-Heathrow, Mexico City, Paris-Charles de Gaulle, Santiago (Chile), São Paulo, Seoul-Incheon and Tokyo.

Delta's refinery segment, operated by its wholly owned subsidiary Monroe Energy, LLC, primarily produces gasoline, diesel and jet fuel. In 2025, the refinery segment had operating revenue of $6.961 billion ¹⁴ and operating income of $157 million ¹⁵. The refinery provides approximately 200,000 barrels per day ¹⁶, or approximately 75% ¹⁷ of Delta's consumption, for use in its airline operations. The refinery incurred $312 million ¹⁸ in RINs compliance costs during 2025. The company's loyalty program, SkyMiles, had an aggregate deferred revenue balance of $9.3 billion ¹⁹ at December 31, 2025. Remuneration from American Express totaled $8.2 billion ²⁰ in 2025, which the company expects to grow to $10 billion ²¹ over the next few years. In 2025, 12% ²² of revenue miles flown on Delta were from award travel, as program members redeemed miles for approximately 35 million ²³ award tickets.

In 2025, Delta announced partnerships with both JetZero and Maeve to accelerate the design and development of revolutionary aircraft. The company achieved over 55 million gallons ²⁴ of jet fuel savings from operational improvements as compared to 2019, worth more than $125 million ²⁵ in annual cost savings. In October 2025, Delta acquired a 12.7% ²⁶ equity stake in WestJet for $276 million ²⁷. In June 2025, the company issued $2.0 billion ²⁸ in aggregate principal amount of unsecured notes, consisting of $1.0 billion ²⁹ of 4.95% Notes due 2028 and $1.0 billion ³⁰ of 5.25% Notes due 2030. In September 2025, the company amended the SkyMiles Term Loan credit facility, refinancing existing term loans with replacement term loans bearing interest at a variable rate equal to an adjusted term SOFR, plus a reduced margin of 1.50% ³¹ per annum, extending the scheduled maturity from October 2027 to October 2028, and reducing principal amortization payments from 20% ³² to 1% ³³ per year. In the June 2025 quarter, the Board of Directors authorized a $1.0 billion ³⁴ opportunistic share repurchase program open through June 30, 2028. The company paid profit sharing of $1.4 billion ³⁵ in February 2025 and will pay another $1.3 billion ³⁶ in February 2026. Total dividend payments during 2025 were $440 million ³⁷.

For the fiscal year 2025, Delta reported total operating revenue of $63.364 billion ³⁸, compared to $61.643 billion ³⁹ in 2024, an increase of $1.7 billion ⁴⁰ or 3% ⁴¹. Operating income was $5.822 billion ⁴² in 2025, compared to $5.995 billion ⁴³ in 2024. Net income was $5.005 billion ⁴⁴ in 2025, compared to $3.457 billion ⁴⁵ in 2024. Diluted earnings per share were $7.66 ⁴⁶ in 2025, compared to $5.33 ⁴⁷ in 2024. Total operating expense was $57.542 billion ⁴⁸ in 2025, compared to $55.648 billion ⁴⁹ in 2024, an increase of $1.894 billion ⁵⁰ or 3% ⁵¹. Operating activities generated $8.3 billion ⁵² in cash flow during 2025. The company's liquidity (cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under revolving credit facilities) at December 31, 2025 was $7.4 billion ⁵³.

Delta is pursuing growth through its premium products, including Delta One, First Class, Delta Premium Select and Delta Comfort+, and further segmentation of product offerings. The company's premium yield growth has significantly outpaced main cabin as demand for premium products continues to grow. In 2025, Delta continued to expand its premium products and services. The company is also growing its partnership with American Express, which provides a co-brand revenue stream tied to broader consumer spending. Remuneration from American Express totaled $8.2 billion in 2025, which the company expects to grow to $10 billion over the next few years. Delta is also growing its Maintenance, Repair and Overhaul (MRO) operation, Delta TechOps, which is well-positioned for growth through contractual agreements with jet engine manufacturers, including both legacy and next-generation engine platforms, as well as through airframe and other maintenance services. The MRO business generated revenues of $822 million in 2025, an increase from $658 million ⁵⁴ in 2024.

Delta is pursuing a long-term strategy to achieve net-zero greenhouse gas emissions from its airline operations by 2050 ⁵⁵, with initiatives focused around three key themes: What We Fly, How We Fly, and the Fuel We Use. The company is investing in new, more fuel-efficient aircraft with increased premium seating and cargo capacity to replace retiring aircraft. In 2025, Delta achieved over 55 million gallons of jet fuel savings from operational improvements as compared to 2019, worth more than $125 million in annual cost savings. The company is also working across industries and with state and federal lawmakers to advocate for policy solutions to further incentivize Sustainable Aviation Fuel (SAF) production. In 2025, Delta announced partnerships with both JetZero and Maeve to accelerate the design and development of revolutionary aircraft, including a blended wing-body aircraft expected to be up to 50% ⁵⁶ more fuel efficient than today's mid-market aircraft and a regional, hybrid-electric solution aimed at reducing fuel consumption by up to 40% ⁵⁷.

Delta's non-fuel unit costs (CASM-Ex) increased 2.4% ⁵⁸ to 13.86 cents ⁵⁹ in 2025 compared to 2024, which was in line with the company's long-term target of low-single digit growth, on higher employee costs and investments in the customer experience. The company's total operating cost per available seat mile (CASM) of 19.31 cents ⁶⁰ was comparable to 2024, primarily due to lower fuel expense and a 3% increase in capacity offset by higher employee costs. Salaries and related costs increased $1.359 billion ⁶¹ or 8% ⁶² compared to 2024, primarily resulting from the implementation of base pay increases for eligible employees of 5% ⁶³ effective June 1, 2024 and 4% ⁶⁴ effective June 1, 2025, and 4% ⁶⁵ for Delta pilots on January 1, 2025.

Delta's expected 2026 capital spend is approximately $5.5 billion ⁶⁶, which may vary depending on financing decisions, and will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements. The company has contractual purchase commitments for additional aircraft as of December 31, 2025 totaling approximately $15.4 billion ⁶⁷. On January 12, 2026, Delta entered into a definitive agreement with The Boeing Company to acquire 30 ⁶⁸ Boeing 787-10 aircraft, with an option to purchase up to an additional 30 ⁶⁹ of the same aircraft. On January 27, 2026, Delta entered into a definitive agreement with Airbus S.A.S. to purchase 16 ⁷⁰ Airbus A330-900 aircraft and 15 ⁷¹ Airbus A350-900 aircraft, with an option to purchase up to an additional 20 ⁷² widebody aircraft. The company continues to invest in technological improvements, including innovations to customer-facing applications and improvements to infrastructure and technology architecture. In 2025, Delta launched the beta version of Delta Concierge, an AI-powered virtual assistant within the Delta app. In December 2025, the company celebrated its 1,000th ⁷³ free Wi-Fi-enabled aircraft entering service.

Delta's capital allocation priorities include continuing to strengthen the balance sheet and reducing debt. The company's Board of Directors reinstated a quarterly dividend program in the September 2023 quarter and has increased the quarterly dividend payment each year, most recently to $0.1875 ⁷⁴ per share beginning in the September 2025 quarter. Total dividend payments during 2025 were $440 million . In the June 2025 quarter, the Board of Directors authorized a $1.0 billion opportunistic share repurchase program open through June 30, 2028. No shares were repurchased under this program through December 31, 2025. The company continues to seek opportunities to pre-pay its debt, in addition to periodic amortization and scheduled maturities, and refinance higher cost debt. During 2025, the company had cash outflows of approximately $4.8 billion ⁷⁵ related to repayments of its debt and finance leases. The company's expected 2026 capital spend is approximately $5.5 billion .

Delta faces structural headwinds from the highly volatile price of aircraft fuel. Fuel costs represented 17% ⁷⁶ of total operating expense in 2025. The company's results of operations are significantly impacted by changes in the price of aircraft fuel, and a one cent increase in the cost of jet fuel per gallon would result in approximately $40 million ⁷⁷ of additional annual fuel expense based on annual consumption of approximately four billion gallons of jet fuel. The company also faces headwinds from the extensive regulatory and legal compliance requirements applicable to the airline industry, including environmental regulations related to greenhouse gas emissions, noise, and hazardous substances. The company's operations are subject to evolving and increasingly stringent federal, state, local and international laws governing environmental protection, including the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the EU Emissions Trading System (ETS). The company also faces risks related to the termination of antitrust immunity for its joint cooperation agreement with Aeroméxico, which was ordered by the DOT on September 15, 2025, though a stay was granted pending judicial review.

Delta faces execution risks related to its dependence on third parties, including regional carriers, international alliance partners, technology service providers and ground operation providers. The company relies on the operations and performance of third parties in a number of areas important to its business, and a significant disruption in, or other problems with respect to, the operations or performance of these third parties could have a material adverse effect on its business. The company also faces risks related to labor relations, as approximately 20% ⁷⁸ of its workforce is unionized. Strikes or labor disputes with unionized employees may have a material adverse effect on the company's ability to conduct business. Additionally, the company's ability to achieve its environmental sustainability goals is subject to substantial risks and uncertainties, as it is dependent on the actions of governments and third parties and will require significant capital investment, research and development from manufacturers and other stakeholders, along with government policies and incentives to reduce the cost and incent production of SAF and other technologies that are not presently in existence or available at scale.

Delta's business is materially exposed to volatile aircraft fuel prices, which represented 17% of total operating expense in 2025; a one cent increase in the cost of jet fuel per gallon would result in approximately $40 million of additional annual fuel expense. The company faces significant operational and financial risk from a serious accident involving its aircraft or those of its airline partners, which could expose it to significant liability and harm its reputation. Cybersecurity threats pose a material risk, as the company processes a high volume of personal and sensitive business information; a significant breach could disrupt operations, damage reputation, and expose the company to liability. The company is dependent on its commercial relationships with international airline partners, including joint ventures and equity investments; the DOT issued a final order terminating antitrust immunity for the joint cooperation agreement with Aeroméxico, and if such arrangements are not maintained, investments or other assets could become impaired. Labor relations present a material risk, as approximately 20% of the workforce is unionized, and strikes or labor disputes could have a material adverse effect on operations. The company's ability to achieve its environmental sustainability goals, including net-zero GHG emissions by 2050 , is subject to substantial risks and uncertainties, as it depends on actions of governments and third parties and technologies not presently available at scale.

Management's message emphasizes that Delta's people and culture are its strongest competitive advantage, and the company celebrated its centennial year in 2025. Key themes include continued differentiation from the industry through investment in competitive advantages: people and culture, operational reliability, global network, customer loyalty and financial foundation. Management highlights the company's industry-leading profit sharing program, rewarding employees with $1.3 billion in profit sharing payments in February 2026. Strategic priorities emphasized for the period ahead include continuing to strengthen the balance sheet and reducing debt, diversifying the business by growing high-margin revenue streams (premium products, American Express partnership, MRO, and other complementary businesses), and investing in technology as a strategic differentiator. Management also emphasizes the company's long-term strategy to achieve net-zero greenhouse gas emissions from its airline operations by 2050 . The company expects remuneration from American Express to grow to $10 billion over the next few years. The company projects its annual effective tax rate to be between 23% and 25% ⁷⁹ for 2026, excluding mark-to-market results.