Good morning, everyone, and welcome to the Delta Air Lines December quarter and full year 2022 financial results conference call. My name is Matthew, and I will be your coordinator. At this time, all participants are on a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded. If you have any questions or comments during the presentation, you may press star one on your phone to enter the question queue at any time. I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead. Thank you, Matthew. Good morning, everyone, and thanks for joining us for our December quarter and full year 2022 earnings call. Joining us from Atlanta today are CEO Ed Bastian, our President Glen Hauenstein, our CFO Dan Janki. Ed will open the call with an overview of Delta's performance and strategy, Glen will provide an update on the revenue environment, Dan will discuss costs and our balance sheet. After the prepared remarks, we'll take analyst questions. We ask that you please limit yourself to one question and a follow-up so we can get to as many as possible. After the analyst Q&A, we will move to our media questions. 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'll also discuss non-GAAP financial measures, and all results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the Investor Relations page at ir.delta.com. With that, I'll turn the call over to Ed. Thank you, Julie. Good morning, everyone. We appreciate you joining us today. Earlier, Delta reported our full-year results, including our December quarter earnings per share of $1.48 on record revenue that was 8% above 2019 levels. We generated a 12% operating margin, our third consecutive quarter of double-digit operating margins, pointing to the strength of our recovery. I want to sincerely thank the 90,000-strong Delta team for their outstanding work in delivering these results and serving our customers during a very busy holiday travel season. In my opinion, 2022 was the most difficult operational year in our history and was capped off by severe winter storms over the holidays. I am grateful to our employees for their great work to recover the operation while keeping our customers and each other safe. They are the reason our brand and customer loyalty is at the top of the industry. Our December quarter earnings per share and margins exceeded guidance, marking a strong close to a year where we made significant progress restoration of our financial foundation. For the full year, we reported earnings of $3.20 per share on $46 billion of revenue. We delivered pre-tax income of $2.7 billion, an improvement of more than $6 billion over 2021. Delta's profitability led the industry, and in our nearly 100-year history, 2022 was our seventh highest result, even with a $1 billion loss in the first quarter. We are pleased to report positive free cash flow for the year, which funded $6 billion of capital invested back into the business. We repaid close to $5 billion in gross debt. Sharing our success is a long-standing pillar of Delta's culture. I'm proud to announce that we'll be paying our employees $550 million in well-earned profit-sharing come Valentine's Day. 2022 came in ahead of our plan on revenue, earnings, and cash flow, demonstrating strong execution in the first year of the three-year plan we laid out at the 2021 Capital Markets Day. I'm incredibly proud of the team for rebuilding the world's best-performing airline. Importantly, we're not just building back, we're continuing to improve and extend our competitive advantages. Delta's brand continued to strengthen in 2022 with record performance from our loyalty and co-brand card programs and customer satisfaction scores consistently perform above pre-pandemic levels. Through the year, we've hired and trained 25,000 new employees, now representing over a quarter of the total company. Our team showed their operating talent and resilience as we retained our number 1 position in completion factor in on-time arrivals amongst our peer set despite having so many new team members. The Delta brand is centred on our safe, reliable, and exceptional service. Our operational excellence was recognized by Cirium last week, which named us yet again the most on-time airline in North America. We fortified our international partnerships in 2022, p ositioning us for profitable international growth in the years ahead. As detailed last month, expanding our international margins to domestic levels is an important opportunity for Delta in the years to come. We've invested in the customer experience at every stage of the travel journey, from the continued refresh of our fleet with next generation, far more fuel-efficient aircraft to generational airport rebuilds and technology investments that are providing our employees better tools and our customers a more seamless experience. We continue to attract and partner with leading brands to grow our SkyMiles ecosystem and further enable customers to use their SkyMiles during travel and beyond. Heading into 2023, our momentum continues. At the Consumer Electronics Show in Las Vegas just last week, we unveiled the next phase in our vision to connect the sky. Starting February 1st, Delta will be the first major U.S. airline to provide fast, free, unlimited Wi-Fi to all through a free SkyMiles account. This will be available on nearly 80% of our U.S. system to start and growing every week. By the end of next year, we expect to deliver this service seamlessly throughout the rest of our international and regional fleets. We debuted Delta Sync, which will create personalized experiences and engagement opportunities on the free Wi-Fi portal. We're partnering with great brands like T-Mobile and Paramount+, as well as building on our long-standing relationship with American Express to bring to life our vision of a more connected and personalized travel experience. As a trusted consumer brand, Delta continues to differentiate the premium flying experience, building loyalty, and supporting our ambition to transcend the industry. Moving to our outlook. At our investor event last month, we provided full year 2023 guidance for revenue growth of 15%-20% year-over-year, earnings of $5-$6 per share, and free cash flow of over $2 billion. We're affirming that guidance today and introducing our March quarter outlook, which Glen and Dan will provide in detail. For the March quarter, we expect to deliver a 4%-6% operating margin and improve our pre-tax income by more than $1 billion compared to the same period last year. Importantly, we are embedding the assumed impact of all labor cost increases throughout our guidance metrics. We are pleased to have reached an agreement in principle with our pilots, but out of respect for the process, we will not be discussing the details of the agreement on today's call. As I outlined last month, I've never seen a more constructive backdrop for the industry. Demand remains strong as passengers return to the skies and industry returns to the long-term trend to GDP, all while supply constraints continue. I believe our industry will see tens of billions of dollars of incremental demand in the next few years coming out of the pandemic. As the industry leader with a proven strategy and strong execution track record, Delta is well-positioned to build on our momentum in the new year. We're confident in our ability to deliver significant improvement in earnings and free cash flow in 2023, consistent with the plan we laid out last month. We are on track to deliver our 2024 targets of more than $7 of earnings per share and $4 billion of free cash flow. As always, we remain mindful of the macroeconomic trends and have demonstrated that we have the tools to effectively manage a changing economic climate. In closing, Delta delivered in 2022, outperforming our plan and leading the industry operationally and financially. We are uniquely positioned to grow earnings and cash flow in 2023, 2024, and beyond. The power of our premium brand continues to grow, and with the very best people in the industry, I couldn't be more excited about what's ahead for Delta and our customers. Thank you again. With that, I'll turn it over to Bud. Thank you, Ed. Good morning, everyone. I couldn't be prouder of what the Delta people accomplished throughout 2022, and I want to congratulate our teams on their much-deserved profit-sharing payout they'll be receiving next month. For the full year, we generated revenue of $46 billion, a $19 billion improvement year-over-year. We delivered record December quarter and full year unit revenues, sustaining our revenue premium to the industry of more than 110%. For the 12th consecutive year, Delta was named the number one corporate airline in Business Travel News survey as we continue to invest in our network and product offerings. Through the year, we made significant progress on our long-term commercial strategy to deepen our network advantages, expand premium revenues, grow our loyalty ecosystem, and further diversify our revenues. Starting with our network strategy, we focused on solidifying our positions in coastal gateways while protecting our core hub shares. We secured the leading positions in both Boston and Los Angeles while increasing local market share in our core hubs. Premium led all year with paid load factors higher than 2019 and yield growth outpacing main cabin. While basic economy made up less than 5% of revenue, half of the 2019 levels. We expanded our Delta Premium Select rollout during the year. Customer response has been positive and the cabin performed better than our initial expectations. Our rollout continues in 2023, and we will have this product on 84% of our international wide body fleet by the summer. Our loyalty program continued to exceed our expectations with record SkyMiles acquisitions in 2022, 42% higher than 2019. As Ed noted, we're partnering with leading companies to expand our loyalty ecosystem, increasing the value of our program for customers and deepening customer engagement with Delta. With an expanding ecosystem and free fast Wi-Fi, we expect continued growth in our loyalty base. Our partnership with American Express delivered record results with full year remuneration of $5.5 billion, ahead of our initial target and positioning us to deliver over $6.5 billion in 2023 and over $7 billion in 2024. Cargo revenue was a record in 2022. We expect to grow cargo revenues in 2023 as increased capacity offsets the cargo yield environment. With strong execution across our business lines, a record 55% of revenue was generated by premium products and diverse revenue streams. We're confident in our path to exceed 60% by 2024. While not without challenges, 2022 was a strong year for Delta, and we exited the year with momentum. During the December quarter, we generated revenue of $12.3 billion, 8% higher than 2019 on 9% less capacity. We saw revenue recapture at the end of December that offset the impact of weather disruptions in our system around Christmas. Fourth quarter unit revenues were 19% higher than 2019, with strength driven by consumer demand throughout the quarter. Corporate travel demand was steady through the quarter, with corporate domestic sales 80% recovered to 2019 levels. We expect March quarter revenue to be up 14%-17% higher versus 2019. On capacity approaching full restoration, we expect March quarter unit revenues will be up 15%-17% compared to 2019, including a two-point impact from higher stage. Based on how we're deploying our network, our stage length is expected to be up five points compared to 2019, resulting in a higher restoration of ASMs than seats. This is a temporary dynamic that is unique to Delta among major carriers. Stage will begin to normalize relative to 2019 and relative to the industry as we rebuild our core hubs later this year. For 2023, we expect to grow revenues 15%-20% year-over-year as we fully restore our network and further diversify our revenue streams. Consumer demand remains healthy, with advanced bookings significantly ahead on both yield and load factor through each month of the March quarter compared to 2019. In our recent corporate survey, where results were positive, with 96% of respondents expecting to travel as much or more in 1Q than 4Q, led by financial services. In the new year, bookings reflect the survey optimism and are accelerating. International revenue continues to be led by the Transatlantic. We are seeing robust demand across our expanded footprint in Europe and expect the spring and summer to set new record revenues. Latin America is performing very well, led by Mexico, the Caribbean, and Central America, with the recovery in Deep South America now accelerating. We are pleased with the early results from the launch of the LATAM JV, and I'm excited about the opportunities for us in 2023 and beyond. In the Pacific, we're expected record first-quarter profits in both Australia and Korea, as our multi-year international transformation delivers unanticipated results. Japan is also building momentum. We expect a very strong summer there. Lastly, with China indicating its reopening, we expect to rebuild capacity in line with demand starting later this year. In closing, we delivered on our key commercial priorities in 2022, supporting a significant improvement in our revenue while strengthening our competitive advantages. We have started the new year with great momentum and are well-positioned to extend our leadership position in the years ahead. With that, I'll turn it over to Dan to talk about the financials. Great. Thank you, Glen. In 2022, we made significant progress restoring our financial foundation. We delivered earnings of $3.20 per share with pre-tax income of $2.7 billion, ahead of our plan. Operating margins of 7.8% was driven by 3/4 of double-digit margins. We improved profitability and a strong advanced bookings. We generated $6.2 billion of operating cash flow, enabling continued investment in our people, our fleet, our partners, and technology. After gross CapEx of $6 billion, we generated $244 million of free cash flow. We ended the year with liquidity of $9.4 billion and adjusted net debt of $22.3 billion. Our adjusted net debt to EBITDAR was five times, and our after-tax return on invested capital was 8.4%. We finished the year strong, reporting a $1.4 billion operating profit on a margin of 11.6% for the December quarter. Our non-fuel costs were 13.4% higher than 2019, in line with guidance excluding a one-point impact from the severe winter weather in late December. Moving to guidance. As Ed mentioned, we are including all expected labor rate increases in our guidance metrics, including non-fuel CASM. As it relates to our pilots, if they vote to ratify the proposed agreement by March 1st, pay rates would be retroactive to January 1st. This results in a three-point impact on our non-fuel unit costs for the year and in each of the quarters. Including this in the full-year guidance we gave last month brings our 2023 non-fuel unit decline to 2%-4% on a year-over-year basis. Delivering a competitive cost structure is a key financial priority. Delta has led the industry in investment in our people and our customers, and this is embedded in our outlook, as is a full reset of regional costs and inflation. As we move through the year, scale and efficiency will drive a decline in 2023 non-fuel CASM versus 2022. While approaching 2019 capacity provides scale benefits, we are still bearing the cost to fully restore our network to the peak summer levels, with a continued emphasis on operational reliability during this ramp-up. We expect to complete our rebuild by the second half, with the majority of our flex fleet reactivated and training levels for our pilots reverting to historical levels. This will allow a significant shift of resources from training to production, giving us the confidence in our ability to deliver a fully restored network during the peak summer period while enabling our operating teams to drive efficiency in the back half of the year. One unique item within the year is the pacing of our core maintenance as we prepare to step up the network for summer flying with the first half year-over-year and then lower in the second half of the year. While these dynamics impacting early part of the year, we expect 1Q non-fuel unit cost to increase 3%-4% on a year-over-year basis. We expect the year-over-year unit cost to progressively improve through 2023 as we complete our rebuild and elevated maintenance activity while driving efficiency across our operating groups. This cadence is consistent with our full year outlook for non-fuel unit cost to decline 2%-4% year-over-year. With our outlook for revenue, we expect the March quarter operating margins to be 4%-6% and earnings of $0.15-$0.40 per share. For the full year, we are re-reading our outlook for earnings of $5-$6 per share and operating margins of 10%-12%, delivering a two to four point expansion of margins, including over 1 point impact from higher profit sharing. We expect the full year free cash flow to be more than $2 billion with gross CapEx of $5.5 billion. In 2023, non-operating expense is expected to be $470 million higher year-over-year. This results from non-cash pension expense increasing over $550 million year-over-year due to broad market declines, more than offsetting the reduction in interest expense from repaying debt. We plan to pay cash for our $2.4 billion in debt maturities while opportunistically reducing debt with excess liquidity. This will bring our leverage to 3 to 3.5 times target for 2023 and remaining on track for 2024 adjusted debt to EBITDAR to be two to three times. Returning to investment grade metrics by 2024, while continuing to reinvest in the business remains our focus for capital allocation. In closing, I want to add my thanks to the Delta team and people for their hard work this year. We outperformed the first year of our three-year plan. We enter 2023 on track to generate a significant improvement, both earnings and cash flow. We remain confident in delivering on our 2024 target of $7 of earnings per share and generating over $4 billion of free cash flow. With that, I'll turn it over back to Julie for our Q&A. Thanks, Dan. Matthew, can you please remind the analysts how to queue up for a question? Certainly. At this time, we'll be conducting a question- and- answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speaker phone to provide optimum sound quality. We do ask that all Q&A participants please limit to one question and one follow-up question, then reenter the queue. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Catherine O'Brien from Goldman Sachs. Your line is live. Good morning, everyone. Good to be back. Maybe I'll start with a question on the capacity bottlenecks that you mentioned in your prepared remarks, Ed. You know, I know Delta itself has made a lot of progress in hiring and getting through a large wave of training. There are other constraints outside of the airline industry's control with aircraft delivery slower than planned and, you know, aviation infrastructure still fairly strapped at airports and the FAA. Now, I know the answer will be different for Delta than some of your peers who are further behind in their pilot hiring. How do you think about the timeline to remove some of these bottlenecks across the industry that aren't directly in the airline's control? I guess really why I'm asking is, you know, do you expect there to be continued tension between supply and demand over the medium term? Just how do you think about those rolling off? Thanks so much. Thanks, Katie, and welcome back. Yeah, I think you summed it up well. I mentioned at the Capital Markets Day last month that while we at Delta, and I think the industry broadly provides you our capacity expectations, I think expectations have quotation marks around them, and they do feel still a little bit more aspirational than because there are a number of things that are outside of our control. We're doing our very best to get our people in place. The hiring is strong. We have the team assembled. We need to get them through, principally our pilots, through the training, the limited training devices and schoolhouse that we have available to us. We expect by the summer that we will be in position to have not just get through most of that bottleneck, but then the large resource drain that it takes with respect to all of the training that our existing team has to do to train our new employees, whether that's pilots or flight attendants, mechanics at the airports, reservations, it doesn't matter where in the system you sit. That's hard to see. I can appreciate that if you're sitting in your chair, but it's very meaningful here on the airline. By summer, we hope at Delta that we'll be able to be back 100%. I also used the term fragile last month when speaking about the aviation system as we continue to return to the skies. I think we've seen just in the last few weeks, a couple of illustrations of that fragility. We're gonna continue to do our best to make sure we don't fly in excess of our capabilities so that we can deliver a great product for our customers and provide all the tools and support for our employees. That's great. So helpful, Ed. If I could maybe just for my follow-up, Glen, I know 75% of this year's growth out of your core hubs. Can you help us think about RASM performance at your core hubs versus the rest of your network? Even better, since we know it's lower cost capacity, can you help us think about, you know, the margin differential of adding capacity in core hubs versus competitive coastal hubs? Thank you so much. Sure. I think we outlined that at the Investor Day and core hub is about 10 points higher than coastal hubs and 10 points in margin. Yes. About 20 points in terms of RASM. I think as we continue to build our core hubs out, we will see. That's one of the things we're counting on is access, acceleration of profitability in those core hubs and driving efficiency through getting them back to scale. As we mentioned in our Investor Day, we are already at scale in our coastal cities. That was our priority just because we thought it was a once in a lifetime opportunity during the pandemic. So that was our priority, to ensure that we came out in a good position there. I think we're very happy with the positions we've established there, and now it's back to the core where we think it's actually easier lifting. Thank you very much. Thank you. Your next question is coming from Ravi Shanker from Morgan Stanley. Your line is live. Thank you. Morning, everyone. Ed, you said in your prepared remarks that you've never seen a more constructive industry backdrop. Black swan events aside, what do you see are probably the biggest risks or things to watch out for the industry in 2023? Is it your previous response on infrastructure and things that's outside of your control or what are you looking at? Well, thanks, Ravi. That's right. I think the most important thing at Delta we can do is to continue to restore confidence back to the traveling public. We know the public wants to travel in outsized amounts that we see continuing, and we have to do our very best not to disappoint them as they return to the skies. I think 2022 was very difficult in that regard. Demand clearly exceeded our ability to supply it for lots of ways, including in the service levels with the exceptional degree of service that we want to provide our customers. I think we all in the industry owe it to our customers to make sure we don't fly in excess of our capabilities. I think that's the single biggest thing that we all need to pay attention to. I wouldn't call it a black swan risk other than just trying to stay within our within our capability. Understood. Maybe as a follow-up, maybe for Glenn. Can you just unpack your thoughts on corporate in the near term a little bit more? I think that's obviously one of the big focus areas for investors right now. You said 96% of corporate in your survey say that they're gonna be kind of flat to up in the near term, but obviously macro is really choppy. We saw some of the hotel data kind of coming into January take a bit of a step down. What are you seeing in terms of your booking curve? Kind of any signs at all on cracks in corporate demand given where macro is? We've had our highest post-pandemic days in terms of corporate booking over the last week or 10 days. We see a very strong post-holiday demand set. We're in a kind of a strange period right now because year-over 19, this is MLK weekend. MLK weekend was next weekend. I think once we get past MLK, we'll give you a better view. We're counting on it to stay in that roughly 80%. The survey would indicate that it's better than that. I think if it does materialize as better than that's upside for our forward-looking forecast. Very helpful. Thank you. Thank you. Your next question is coming from Scott Group from Wolfe Research. Your line is live. Hey, thanks. Good morning. Glen, if I look at the RASM guide for Q1, down about 6% just in absolute terms from Q4. That's worse than normal Q4 to Q1 seasonality. Any color on that? Then when do we really start to see this hub tailwind show up in RASM? Right. Well, quarter-over-quarter we have a two-point increase in domestic stage. That again is unique to Delta, and we think that's about one point of pressure from the 19 down to the 16. There's another international mix, length of haul changing internationally as well. That's another point. We're thinking about this as really being sequentially about one point difference to get from a 91% restoration all the way up to 99% restoration. For core same source store sales, we're actually seeing first quarter being stronger than fourth quarter and with that sequential improvement from February being better than January and March being better than February. I think we're sitting in a pretty exciting place right now as we look at how 2023 is starting. The rebuild of the core. The rebuild of the core, you know, we wish we could do it sooner. Again, I think our priority has been to make sure that we can sustain industry-leading operations. And so that's gonna work throughout the year. I think when we talked about it in Investor Day, we didn't really give you color that this is not a first quarter event. While there's some rebuild domestically in the core, the major rebuilds we expect, for example, Atlanta, which was about 85% last year in terms of seats, to be close to 95% by summer and then 100% by fall, with Minneapolis close to Atlanta and then Detroit a little bit behind. We're working on that. That's our priority, and we'll, we will get there, we believe, by fall, but it really doesn't impact significantly the first quarter's quarter. Okay. Just for Dan, just help bridge us from CASM up 3%-4% in Q1 to down 2%-4% for the year. You mentioned maintenance. How much does that hurt Q1? How much does that then help the back half? Any color here? Thank you. Yeah, certainly. There's two pieces in there, maintenance being one. It's about a two-point headwind in the first quarter and first half, and it's driven by engine induction levels and scope of work related to that. As you get into the back half of the year, that's a two-point to three-point benefit year-over-year, so a five-point progression from beginning to end. The second piece of that is related to the completion of our rebuild, and those rebuild costs stepping down. Most of our rebuild, over 85% of that cost is in the first half of the year. You don't have that in the back half of the year. As Glen just talked about, one of the enablers to that efficiency is as we restore the core hubs. These low-cost hubs, low CP, most cost competitive as we put that capacity in, that drives efficiency of our assets and our workforce. That is five points. The five points related to that and the five points related to maintenance is 10-point progression as you go through the year from the beginning to the end. That drives that continuous cadence improvement as you go through the quarters. Helpful. Thank you, guys. Thank you. Your next question is coming from Sheila Kahyaoglu from Jefferies. Your line is live. Thank you, and good morning, everyone. First I wanted to maybe ask about just profitability levels. You finished the year with 8% margins and are guiding to Q1 with 4%-6%. Given the full year guide, how do we think about margin progression throughout the year? You know, part of it is tied to the cost progression. As you see that progression being up, and I said to you get about a 10-point improvement in cost from beginning to end, that will drive your expansion of margins throughout the year, as you progress. Along with what then Glen talked about, which was the commercial rebuild related to the core. You'll see its progression. Certainly year-over-year, the improvement versus the comp that we're coming off of drives some material improvement here in the first quarter, over $1 billion pre-tax. A big part of the step up in earnings year-over-year, you'll also see improvement as we go through the year. That's helpful. Just maybe one follow-up related to that, just margin progression. You know, I think, Eddie, you mentioned high margin Pacific routes opening up. I think it was Australia and Korea. You know, what are, you know, one to two items we should watch for as we see that international recovery help margin momentum? Our international recovery is well underway, and if you think about Europe, we'll actually be bigger in the transatlantic this year than we were in 2019 by about 8 points in terms of seats. Early advance bookings for that are incredibly strong, so we're very pleased with how that's developing. What's really left to reopen is China. That's, we're not gonna get ahead of ourselves in terms of capacity to China. We're gonna be very mindful to see how demand warrants and how this opens up. That's the big question mark, I think, in terms of international demand for 2023 that we don't know yet. I think the others, we're very confident that we have a good path forward that'll get us back to 2019 or bigger at better margins. You know, I think as we talked about at Investor Day, the multi-year progression on international, the structural elements here, right? The, the next generation fleet that we're at, the reconfiguration of more premium seats with DPS, better cargo capability, stronger partner network, all those are systematic drivers, not only in this year, but really on a multi-year basis. If you go back in our history, not to go into too much detail, but we had a multi-year restructure of our Asia capacity, and that has been a drag on earnings for many years, leading up to the pandemic. Now as we come out of that, we feel like our restructuring is really done in earnest, so we should see really good improvements in Pacific profitability moving forward. Great. Thank you very much. Thank you. Your next question is coming from Jamie Baker from JPMorgan. Your line is live. Hey, good morning, everybody. Glen, it's been a while since we visited the topic of domestic and international RASM premiums. We know, you know, what those metrics were pre-COVID. There's obviously been, you know, quite a bit of international upheaval since then, a bit of domestic change. Of course, the premium market at least is stronger than what I was anticipating in 2019. How should we think about the magnitude of Delta's RASM premiums going forward and any related timing? I think right now we're sitting probably at a low point relative to the industry, given our stage length and the way we rebuilt the airline. I would expect to gain a couple, two to three points domestically back as we get towards the back half of the year on how we rebuild the airline. That's how I view it. I'm pleased with at a macro level, or at an individual flight level, I'm pleased with where we are. When you add it all up, the sum total looks like you're taking a step backwards, but I think it's really the way we've done it rather than a structural look away from Delta or anything that we're losing customers. I think we're in a good spot for that. Okay. Thank you. Second for Dan. You know, as we think about the order book, particularly on the wide body side, considering the OEM backlogs, you know, that, Katie, welcome back by the way, mentioned in her question. How should we be thinking about the cadence of CapEx in coming years? You know, we tend to model you on a normalized basis. But, y ou know, one of your competitors is on a CapEx holiday, another right now is on a CapEx bender. you know, I'm just trying to assess whether 2024 represents a potential peak in cash flow in light of future aircraft needs. I think it's steady as it goes. You know, we've been very consistent and very deliberate, very disciplined, related to CapEx. We certainly had this period where this past year in 2022. There was some catch up in there. We're continuing to do that here in 2023 for what was deferred for a couple of years. I think as you exit 2024, you know, you're normalized now. At the same time, we're getting bigger as an airline, and growing, from that perspective. You know, I think it's a good foundation for us as it relates to where we're stepping off in 2024. Yeah. Jamie, this is Ed. I'd agree with Dan's comments. Don't forget, we are exclusively taking Airbus equipment over the, you know, the last couple of years, the next couple of years, pretty much, and we'll be back with the MAX starting in 2025. We did not have any supply interruption of any note over the last couple of years through the pandemic this year or the years going forward. There's a consistency and I'm confident you're gonna see a, you're not gonna see, you know, any jumps or any, you know, significant declines. You know, we're ensuring that we're staying right within our sweet spot here on the fleet. Just the answer we were looking for. Thank you, everybody. Take care. Thank you. Your next question is coming from Duane Pfennigwerth from Evercore ISI. Your line is live. Hey, thanks. Good morning, and thanks for the time. Maybe just start with Glen on Transatlantic. Typically, this is a pretty quiet time of the year, but it appears the industry is sort of doing less seasonal shaping or kind of de-seasonalizing Transatlantic, which probably makes sense in light of rebuild for the summer. Can you just talk about what you're seeing in Transatlantic, less about this summer and more about, you know, getting from here to there? Right. Well, there's not a lot of room between here and there. We're seeing really robust bookings for March and beyond. It's really, you know, if I look at how we view the Transatlantic, there's April through October is peak spring IATA. March is getting to be a peak month these days. That leaves you really the non-holiday weeks in November and the non-holiday weeks in January and February as really your lull periods. You know, how we've shaped it this year is we've had a bigger Transatlantic than 2019. We had some operational issues in Amsterdam. Excluding those, we were very pleased with the results in the off-peak season, and it's setting up really well. Because I think one of the things that you forget about building up for the summer is the first few weeks for the high point-of-sale U.S. travel are always throwaway weeks because you've got, you know, a significant amount of outbound traffic and very light inbound traffic. Getting those out of the way earlier in the season and really allowing the summer peak to be even more robust than it has been before is, I think, how we're shaping. I don't know if I answered your question, but I'd say we really like what we saw. There are things we're gonna do differently next year. There are learnings from this year that we can improve on. We're excited about those learnings and then really excited about the summer peak season here. We think this is gonna be a record-breaker. Thank you, Glen. Then just on fuel, maybe this is Ed or Dan. You know, you own a refinery. Can you talk a little bit about your outlook for jet fuel? I'm not asking for guidance, we can obviously see that. Just with respect to the unusually high crack spreads and refining margins, which, you know, week to week look like we're gonna get relief and then that relief sort of goes away. Obviously, you have a hedge in that regard, but I wondered if you could talk kinda intermediate term about when the you know, when we see sort of refining margin relief. Yeah, no. You saw it, yeah, constrained market throughout 2022 s tayed elevated. Certainly was disrupted significantly in the second quarter, particularly. We don't anticipate it being at those levels for the current year, giving back. I would say for the next 12 to 18 months, I think you're at least in a period where you're structurally constrained. You know, the global flows for both oil and refined product have changed. Things that used to revert both gasoline, diesel, and jet coming out of Europe into the U.S. aren't taking place. Utilization of refineries are high, and you get disruptions. You've seen it as the winter storms came through in December at incredibly low temperatures. You know, refineries were impacted. You're seeing the rippling effect here in January and the unusual nature even in the last seven to 10 days where the physical market is short on jets. You know, many times throughout 2022 it was diesel, and you see a spike. They as the refineries get the utilization back up and optimize, you get a balancing. They're still tight, and we expect them to stay elevated. Appreciate the thoughts. Thank you. Your next question is coming from Savi Syth from Raymond James. Your line is live. Hey, good morning. Glen, could you talk a little bit more about, you know, what you're seeing on the corporate demand side across the international entities? Just as you get to the summer, I realize it's early days, but where you expect kind of capacity to be restored across these entities? Yeah. I think we talked a little bit about that in the previous question. We expect the Transatlantic to be about 108% restored to 2019 levels. We'll be bigger than 2019. Most of that is engaged as we bring in the newer, more efficient fleets, but we have some exciting departures. We haven't loaded our entire summer schedule yet. That'll be announced over the next eight to 10 days. There are a few more things we need to put back in. In the Pacific, absent of China, we are more than rebuilt in Australia, we're more than rebuilt in Korea, and we are about 75% rebuilt in Japan. We expect to be, you know, somewhere between 75%-100% rebuilt in Japan. If we do or don't receive slot waivers. If we do receive slot waivers, we're probably sitting at 75%. If we don't, we'll go back to 100%. Then China is the big question mark, as I mentioned earlier. We just don't know what's gonna go on there with demand, we're not gonna get ahead of that and publish a China schedule for the summer that we don't know if we can fly and we don't know if the demand will be there. We'll let demand drive what we're gonna fly in China. Then last but not least, in Latin, we are very close to fully restored in Latin right now with the with Deep South really starting to turn on with our partners at LATAM, and getting some really, really positive early results on that. You know, I think other than China, we are fully restored internationally, and we see international restoration where countries are open, and that's very similar to domestic at about 80%. I appreciate that. Just a, kind of a quick follow-up, just on the kind of change fees and the revenue that you're seeing here. The dropping of the change fees, what kind of an impact is that having as you kind of think about the network or the revenue and, you know, will it be different once things are fully restored versus where it is today? Yeah. Re-change fees accounted for almost $1 billion of revenue in the pre-pandemic world. We were on a path, even absent of the pandemic, to change change fees. They had become onerous, people didn't like them, and, you know, trying to give customers what they want, we were on a path to a different approach. That got accelerated. I think we're very happy with where we are today, giving customers choice in how they wanna fly. I'd say we're counting on about half of that $1 billion to be replaced by people who want flexible, fully refundable at time of purchase, which is an option that they're choosing as opposed to it being imposed on them. The rest of that is then coming from a higher share of total customer base and upsells more than covering to produce the record revenues that we expect this year. Makes sense. All right, thank you. Thank you. Your next question is coming from Conor Cunningham from Melius Research. Your line is live. Everyone, thank you for the time. Just on the question that Scott talked about the bridge on the cost side. I don't think you mentioned gauge or asset utilization improving throughout there. Can you just provide some color around where you expect those two metrics to kind of be meaningful tailwinds as you, as you move throughout the year? The only reason why I ask is that you there's a lot of changes on the regional side. I would think that that would be a pretty big tailwind from you. Yeah. The main line asset utilization increase is about mid-single digit, about 5% as we progress through the year. We get the benefit associated with that. As we talked about at Investor Day, we continue to get the benefit associated with gauge. Okay. Related to regional flying, as you know, we have about a third of our regional flying that is not being flown today. That's also one of the disparities between seat restoration and capacity restoration. We're not expecting a significant increase of that until the end of 2023 and into 2024. We're gonna be carrying that. We're carrying that underutilization in the regional network, absolutely, in our run rate. Okay. Okay. That makes sense. On, on the Amex targets, I'm a little surprised that those aren't being revised up. You know, you know, from 6.5 from 5.5, I mean, that's basically nearing the capacity growth year-over-year. I would just think that there would be some outperformance just given the fact that that portfolio has grown a fair bit. Can you just talk about, like, what you need to see to push those targets up? Or did you just see a lot of pull forward in consumer spend that kind of inflated the 2022 number? Just trying to unpack that a little bit. Thank you. Well, we're pretty excited about hitting a $6.5 billion number for this year. Yeah. Hopefully, there's upside to that. I think it's January, we don't wanna commit to that. you know, we're ahead of our long-term goals for that, and we continue to find ways to accelerate our long-term goals. I think next year or maybe even in June, we're gonna give you what's beyond the $7 billion because our first marker was, how do you get to $7 billion? When we said that, I think it was a daunting task for us. It was a daunting task for the team. We're there, right? I think the question really for us, and if I was an investor, is, "Okay, you're at the $7 billion. What's next?" That's what we've got to be working on showing you that we're not done here. Yeah. Yeah. The other thing, Conor, is that, you know, that's not driven by capacity, as you can appreciate. It's driven by the spend on the portfolio. That's a pretty sizable increase in portfolio spend as well. Good problem to have. Thank you, guys. Thank you. Your next question is coming from Helane Becker from Cowen. Your line is live. Thanks very much, operator. Hi, team. Thank you. Sort of a question about Tech Ops. Pre-pandemic, you guys were building that business out. It was gonna be a more than $1 billion revenue business at some point. How are you thinking about that coming out of the pandemic and into sort of the middle part of this decade into the end? Or is that something that's another focus, or is that being supplanted by the other revenues that you're talking about? Hi, Helane. How are you? This is Ed. Hey, Ed. We are incredibly excited about your question and the MRO. In fact, we made great progress during the pandemic to continue to accelerate that vision when we signed a deal to acquire LEAP as part of the MAX deal. We now have basically all the new engine technologies on our platform with exclusive arrangements and opportunities for third-party work that will extend over the next 20 years. Obviously, in the short term, our focus is on, you know, to every extent we have labor, and we have supply challenges of focusing on the Delta metal and continuing to get the airline itself back up and running. The MRO has taken a little bit of a back seat over the short term, but we continue to make the investments and we've got the commitment from all of our partners on the engine side. This is something you're gonna hear a fair bit about in June when we look at the strategic discussion that we're looking to looking to create. Right. In June. Okay. That's gonna be really helpful. Ed, can I please ask you in June if you will also update us on your diversity and inclusion targets. We talked a lot about that pre-pandemic, and then during the pandemic, you've obviously hired 25,000 new people. You mentioned that in your prepared remarks. Can you also at some point update us on how that's going and whether you're meeting your own internal goals? You don't have to share those with us, but if you can share with us how it's coming along, that might be helpful. We will certainly do that, and that was already in the plan, Elaine, to go through that in June. The good news is that we are making great progress, and we will share our targets 'cause we shared them publicly. That's awesome. Thanks so much, team. Thank you. Thank you. Thank you. Your next question is coming from Andrew Didora from Bank of America. Your line is live. Hi. Good morning, everyone. First question for Glen. You know, based on my math, it seems like you're assuming PRASM could start to decline sort of in the high single digits year-over-year as you move through 2023 to kind of get to your 15%-20% revenue outlook. What drives that assumption, particularly given kind of the RASM benefit you should have from your mid-content growth strategy? I think when we look at the progression through the quarter, we had some very extenuating circumstances last second quarter and early third quarter with fuel running up over $120 a barrel. As we think about how we, how we do fuel recapture on the way up, we also as inflation cools down and as fuel comes down, we're not gonna keep all of that. We're gonna keep a, as much of it as we can, and we're not anticipating that big bubble in fuel, which is driving the sequential, the sequential decrease. We'll see how it actually rolls out, and hopefully it's better than that. That's how we're thinking about how the year progresses in terms of absolute unit revenues. Okay. That makes sense. Then if I could just ask you kind of strategically here, Glen? Yeah. As you've seen the revenue environment continue to show this strength pretty much since kind of almost a year ago, are you seeing any changes in behavior from any of your competitors that may show that they're acting differently today than they would have pre-pandemic? Thank you. Yeah. We don't really talk about how our competitors behave. I think what we've seen is we've seen a very big shift in how and why people travel and trying to stay ahead of that in our own planning and make sure that we are capturing where people wanna go and what products they wanna buy. That's really our continued focus. It's been a very interesting journey. Yeah. As you look at individual market levels, we're very different sizes than we were pre-pandemic based on where our customers want us to take them these days. Great. Thank you. Thank you. Your next question is coming from Mike Linenberg from Deutsche Bank. Your line is live. Oh, hey, good morning, everyone. Hey, Glen. Just quick question sort of following up on Conor's on loyalty. It feels like with the free Wi-Fi, this is gonna be a banner year for SkyMiles. I think last year, eight and a half million. How do we think about the conversion of number of SkyMiles to ultimately those who take uptake on the credit card? I think this last year it was, like, an eight-to-one ratio. Is that kind of what it's been historically? Yeah. I think that's about right. you know, We see the more engaged a customer is with Delta, the higher their satisfaction is. That's really part of that ecosystem that we're really trying to grow is SkyMiles is an entry point. Of course, as everybody knows, it's free. Now they have an incentive to do that because there's an immediate benefit to join because you get the free Wi-Fi. How do we translate that ultimately into more loyal customers who eventually will wind up getting some of our other products, and that's really what our flywheel is right now and how we're gonna continue to press forward in terms of loyalty. Great. Very good. Then just second question? Dan, you know, you talked about non-op, the $470 million headwind, obviously non-cash pension expense, maybe there's some other items. How do we think about through the year? Is that ratably? Is it lumpy? What tax rate should we be using, March quarter full year? Thank you. Yes, $1.3 billion for the year. The first quarter, think of it being closer to. If it was ratable, it would be about $330 million a quarter. First quarter will be a little bit higher. Think about it as $360 million-$365 million associated with it. Mm-hmm. Tax rate continues to be consistent right in that 24%-24.5%. Great. Thank you. We'll now go to our final analyst question. Certainly. Your next question is coming from Brandon Oglenski from Barclays. Your line is live. Keep it to one as well. Dan, can you talk about your normal amortization this year, which I think is about $2.5 billion relative to the $2 billion of free cash flow that you guys are anticipating. You know, what are your options here, especially in a higher interest rate environment? How does that change your capital priorities in any way? You know, yes, we have normal maturities at $2.4. We had $1.8 this past year, and we ended up retiring $4.5 billion of debt. Ken and the team were opportunistic in regards to debt that we can take out that we think is higher cost and has good economic payback associated with it. Given our liquidity position as we progress through this year, we'll continue to look at those options. There are certainly a number out there that are targets for us, but we'll either do it through how we've done it through tenders, but also just as you go open market repurchases and being smart and going after the higher cost debt. That's priority. We wanna drive down that non-op interest line over time, and the team's good at it. They've done it, did it for a decade. They'll continue to do it. I guess, Dan, how does a higher interest rate environment here change your capital priorities, if at all? I don't know about changing it. I think it does when it may change in regards to how you look at some of your debt. Some of them that are off of LIBOR and floating have become more attractive to retire in certain situations. We're continuing to be focused on, as you know, it's reinvesting back in the business, but also this path to deleveraging. Continuing to strengthen the balance sheet, reduce debt, and drive down those leverage ratios. All right. Thank you. That will wrap up the analyst portion of the call. I'll now turn it over to Tim Mapes, our Chief Marketing and Communications Officer, to start the media questions. Thank you, Julie. Matt, if you don't mind, could we reiterate for the members of the media the practice for getting in the call queue and in addition to thanking each of them for their time this morning, just remind everyone around one question and one follow-up so we can get through as many of these as we could, please. Thank you. Absolutely. At this time, we'll be conducting a Q&A session for media questions. If you have any questions or comments, please press star then one on your phone. Please hold while we poll for questions. Thank you. Your first question is coming from Claire Bushey from Financial Times. Your line is live. Hi. I was wondering what needs, in your opinion, to happen at the FAA so that what happened on Wednesday doesn't happen again? Hi, Claire. It's Ed. I missed the first part of your question. Your question is what does the FAA need to do in order to ensure- So that- We don't see a repeat of, Wednesday? Correct. Well, if you saw my comments this morning on CNBC, I think it's very clear that there has to be a call to action amongst our political leaders, the Congress and the White House to fund and properly provide the FAA the resources they need to do the job. We've long talked about the need for modernization of our air traffic control systems. I think this is a crystal clear example of the challenge the FAA has faced when you have aging systems that aren't as resilient as they need to be. You have tools and technologies that are somewhat outdated and staffing levels, you know, not where they need to be. FAA, I know, is doing the very best they can with what they have, but we need to stand behind the FAA, and we need to take them off the kind of year-by-year funding it seems like they go through that's caught up in political negotiations and realize the importance of having a strong aviation infrastructure and the importance of that to our economy as well as our public. Thank you. Thank you. Your next question is coming from Alison Sider from The Wall Street Journal. Your line is live. Hey, thanks so much. I guess sort of a related question, but I guess curious, you know, how much do you think that the infrastructure and airspace issues are likely to be a constraint on growth for the industry overall? You know, whether it's the vulnerability of technical systems and lack of redundancy or just controller staffing or what have you. You know, how impactful do you expect that to be going forward? Well, it's a current constraint on our ability to grow as an industry. You see the length of flight times they're taking to complete missions. You see some of the challenges the air traffic controllers have when you get into congested space in the Northeast or down in Florida. There's been a lot just even during the pandemic itself, some real challenges that we've experienced. There's no question that the investment in a modernized air traffic control system will drive a tremendous amount of efficiencies as well as growth, which will mean better service for the American public. Thanks. I guess can you talk a little bit about sort of what sort of systems or backup or its own redundancy Delta has, like if there was another outage, you know, of the NOTAM system like we saw earlier this week, you know, is that something that Delta can kind of deal with or work around or, you know, is that something you just need to have or yeah? If there's anything you can share on that. The NOTAM system that went down is an essential system. No airline would fly without having that capability. Interestingly, at Delta, we had and have a long, a fairly old backup technology that does feed that, and we were able to keep some of the NOTAM information flowing to Delta. We probably had a little better opportunity to fly during this stoppage as compared to anyone else, but out of deference to the FAA and making certain that we gave them the ability to make the decisions, we didn't utilize that backup system. It's an important part of our resiliency and redundancy. Thank you. Thank you. Your next question is coming from Kelly Yamanouchi from The Atlanta Journal-Constitution. Your line is live. Kelly Yamanouchi, your line is live. Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live. Hi. Thank you. I just wanted to see if I could get you to talk a little bit more about your comments about business bookings remaining steady. It seems like the 80% recovered level in the December quarter is what you had been saying previous to that, and I wanted to see if you've got any sort of an outlook beyond the March quarter that gives you confidence that corporate recovery is not gonna stall at some level. You know, we do those corporate surveys, and that's why we do them to see what our corporate partners are thinking about in terms of future travel. It was actually the last one we did, which is for future travel, was the best survey we've had since pre-pandemic in terms of their enthusiasm that more people would be flying in future months than were flying in current or past months. As I said in the call, we're not counting on that in our current revenue forecast because sometimes that doesn't come to fruition. There's a sense of optimism from this pent-up demand for business travel that we see could potentially offset any weakness in the general economy. We're taking a very cautious look, but and we're counting on it being stable and not growing dramatically. It looks like people think it will grow. Mary, this is Ed. I, you know, you see in the, in our country a lot of businesses struggling to get their employees back into the office, and I think this is tied to that. As companies return and employees return to office, you're gonna see another step up, in my opinion, of return to more normal trends, including improved business travel. You think of a lot of the big accounts we serve are consultancies, legal firms, accounting firms. It's tough for them to get out on the road if they don't have the offices open of their clients and their customers. I think that's a little bit of the choppiness that Glen was referring to, was that companies are intending to open and have had some, there's been some stalls, going on there. I do think as we progress over the course of the year, you're gonna see more and more of business being done like it used to be done than ever before. Okay. If I can just follow up. I understand about your survey, but are there bookings that you can see at this point beyond the March quarter that gives you any idea of whether that weakness will continue? When you said you're counting on that corporate demand being stable but not growing dramatically, that's a change, though, from what you had been seeing. Is that correct? You had been seeing growth, but now you're seeing it more stable. Clearly, in the early parts of the pandemic recovery, we saw some accelerated growth. I think we've been pretty consistent the past couple of quarters saying we see some stability in the booking curve at about 80% of booked revenue. As you know, business travel usually has the shortest advanced purchase windows and is mostly close in, so we would not have any further visibility beyond the next 60 to 90 days that would be of any significant help in charting that water. Thank you. Thank you. Your next question is coming from Edward Russell from Skift. Your line is live. Hi. Thank you for taking my question. I wonder if you could comment on if Delta saw any benefit from Southwest Airlines' operational issues in December. Was there an uptick in bookings, people buying last-minute tickets on Delta? Any color would be great. Sure. As you know, we had our own weather operations during the peak Christmas holiday travel period. We saw after that, when we were fully recovered and Southwest was still not back in full swing, that we had an uptick in our bookings. That's trended in highly competitive with Southwest markets a little bit into January. We think that will resolve itself over the next six months or so. Thank you. Thank you, Edward. Matt, we have time for one final question if we could, please. Certainly. The last question is coming from Robert Silk from Travel Weekly. Your line is live. Yeah, hi. When you talk about getting back to full, you know, pre-pandemic capacity, in your major hubs, are you talking about seats or flight numbers? What percent is your gauge up, let say, in Atlanta? What will it be up this summer? How do you think about managing crowds as you increase gauge and bring your flight numbers back up to where they were or beyond? Right. Probably not for the next couple of years see the flight numbers we did in 2019. We will get seat capacity restoration to 100%, which means that gauge will go up significantly. When you look at our fleet evolution, that was always our plan, was to continue to grow, not by additional departures, but by larger airplanes, more efficiency, less fuel burn, better products and services. That's really what we're intending on doing. The pandemic accelerated that, so you've got our average gauge up by double digits right now. That's partly because we keep taking larger airplanes, but partly because the regional fleets are less restored. We think that will normalize out over the next 18 months. We will probably not, for the foreseeable future, get back to the flight levels. We will match or exceed by the end of the year at the historical levels in terms of seat capacity. With the higher gauge, do you end up with more crowded banks in terms of number of passengers, or is that assuaged by having less flights? No, I think, you know, that's why, that's why we've done these generational builds across our network, is that we knew that bigger gauge was coming. We needed to accommodate it. Even, for example, here in Atlanta, we've worked closely with the city to reconfigure the D concourse to be wider than any of the other concourses to accommodate that increased gauge. We've got short, medium, and long-term plans to accommodate those gauge. A lot of that was in our generational builds across the network. We don't think that it's gonna be more crowded than it was in 19 or feel more crowded. Okay, great. That's helpful. Thank you, Glen. Thank you, Robert. Matt, that will wrap our call for today. We're grateful for everyone's time and participation. That concludes today's conference. Thank you for your participation today.