Data Source: DAL 22Q3 Financial Results (October 13, 2022)

Tool: SankeyMatic

Some Interesting Observations:

• They're getting jet fuel for only $3.53 a gallon... Best price of all of the big US airlines. I
• Delta shows nearly $1.2B in refinery operations. In 2012, Delta acquired the recently closed Trainer Refinery in Pennsylvania from ConocoPhillips, as a way of insulating itself from volatility in refining margins. It can refine about 3 billion gallons of jet fuel a year. The refinery operation itself is breaking even, but shows on the bottom line in Delta having the lowest fuel cost of all three major US airlines.
• Fleet-wide, they're averaging about 60 passenger miles per gallon.
• Average annual (loaded) payroll per FTE is about $152K, significantly better than either AA or UA, and that's not counting another $12,000 per employee of profit sharing... Delta pays well!
• Total Revenue is about 25 cents per passenger-mile. They keep 1.2 cents of that.
• Taxes! The government is making about more money on the airline than the airline is making on the airline.
  • $267M in federal income tax (unusually high)
  • $198M in federal payroll tax
  • $226M in federal excise tax on jet fuel (24.4 cents/gallon) -- this is largely what funds the FAA.
  • State Taxes on jet fuel are unknown but state jet fuel tax per gallon in their US hubs - Delta seems to have hubs in high tax states:
    • Georgia (ATL) 7.5 cents plus local sales tax of 8.9% (31 cents)
    • Michigan (DTW): 3 cents
    • Utah (SLC): 2.5 cents
    • California (LAX): 2 cents
    • New York (LGA/JFK): 6.5 cents
    • Washington (SEA): 11 cents
    • Minnesota (MSP) : 15 cents

Southwest is posting their Q3 results next week... Will be interesting to see what theirs looks like as their business model is very different.

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Why is their tax % so much different than United’s?

Not entirely sure - there may be state and local taxes involved, or they have significant operations somewhere that has a higher tax rate.

Not offhand, but I can throw one together pretty quick. They may account for things a bit differently, but I’ll check it out.

Why is it always airlines specifically

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It’s up.

I’ll probably do Lufthansa next week after they release quarterly.

Why is what airlines?

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Just like RyanAir, the report is pretty lean on frills 🤣

I had no idea delta had their own refinery

Are they paying state taxes on jet fuel that they produce through their refinery?

Most likely, but that would be whatever the local state tax is at the point of purchase

Yeah, that was a surprise to me too. vertical integration FTW

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Not to nit pick…Airlines has a space in it when referring to the company name.

Thank you for this, I’ll be sharing it internally because it definitely helps explain where money comes and goes.

Good catch! I wasn’t fully paying attention when typing out the title. Can’t even blame autocorrect.

delta is pretty good about lots of details in their financial quarterlies.

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I’ve always wondered how much their bottom line is impacted by hedging fuel price fluctuation. They must be huge into futures and swaps.

Almost 13B in income and only a net income of 695M. Operating income at 1.4B, and while I'm not a finance guy, I feel like 695M net isnt very good. Maybe I don't understand this (open to correction), so feel free to correct my understanding.

It’s a high volume, low margin business. Any net income that is positive is a good thing.

The numbers from a year ago are terrifying.

Lufthansa does similar volume and lost money in the first half of the year.