Good morning everyone, and welcome to the Delta Air Lines June Quarter Financial Results Conference Call. My name is Cecilia, 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.

Thanks, Cecilia. Good morning everyone, and thanks for joining us for our June quarter earnings call. Speaking today on the call will be our CEO; Ed Bastian and our CFO; Paul Jacobson. We also have our President, Glen Hauenstein and our entire leadership team here with us for the Q&A. To get in as many questions as possible during the Q&A, please limit yourself to one question and a brief follow-up. 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 will also discuss non-GAAP financial measures, 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. And with that, I'll turn it over to Ed.

Thanks, Jill. Good morning everyone, thank you for joining us today. We are now four months into the pandemic, and the nearly $4 billion pre-tax loss that we just posted, reflects the severe impact that COVID-19 is having on our company and our industry. The June quarter was remarkable for a confluence of crisis that rocked our nation. In addition to the pandemic and its impact on public health and the economy, the issue of inequality and social injustice for Black Americans has been front and centered. In this environment, our number one focus is taking care of our people. This includes not only protecting the health and safety of our employees, but also maintaining our commitment to supporting the fight for equality and social justice. We are committed to listening and understanding. We must be a stronger advocate for justice and equality across our business, from our operating procedures to the programs that we offer our people, the support for policy change. Our people are the heart and soul of Delta, and I am incredibly proud of their perseverance and resiliency through these trying times, and forever grateful for the sacrifices that they are making for our company. Since demand bottomed in mid-April at less than 5% of our normal traffic, we've seen a small but welcome uptick in passenger volume, being driven almost entirely by domestic leisure travelers or those flying for essential reasons. And while it's encouraging to see customers start to return, the revenue environment remains challenging. We have thought from the start that the recovery will be choppy and the past few weeks have shown that to be true. We're expecting our overall revenue for the September quarter will be only 20% to 25% of what we saw last summer. And we've seen demand growth…

Thank you, Ed, and good morning, everybody. This June quarter results we reported this morning illustrate the truly staggering impact of this pandemic on our business. Revenues declined 91%, and we reported a $3.9 billion pre-tax loss, one of the largest in Delta's history. Results exclude several items directly related to the impact from COVID-19 and our response, including $2.5 billion in impairment charges from fleet-related decisions, $2.1 billion in write-downs related to equity partners and a $1.3 billion benefit from the CARES Act grant recognized during the quarter. During this quarter, our total operating expenses declined $5.5 billion or 53%. The June quarter cost performance was more than $400 million better than our original expectations, in part due to the incredible contributions of more than 40,000 employees, who have elected to take voluntary unpaid leaves. With substantially reduced flying, fuel expense was nearly $2 billion lower compared to the prior year quarter, and we generated over $250 million of savings from parking more than 700 aircrafts. We were also able to reduce facilities expense by consolidating concourses and temporarily closing sky clubs, while eliminating nearly all discretionary spending. In the September quarter, we expect to achieve a similar 50% year-over-year reduction in operating expenses, despite a sequential increase in capacity. This reflects the increased variability we've achieved in our cost structure and what we've been discussing, since the COVID epidemic. As Ed said, our top financial priority remains to ensure that we have sufficient liquidity to whether whatever comes at us. To this end, we've taken decisive action to bolster our liquidity position, ending the quarter with $15.7 billion of liquidity. Daily cash burn also improved sequentially each month during the quarter to average $27 million in the month of June. This outperformed our initial expectation of $50 million…

Thanks, Paul. Cecilia, we are ready for questions from the analysts, if you could give them instructions on how to get in the queue.

[Operator Instructions] And we'll go first to Hunter Keay, Wolfe Research.

Hey, good morning, everybody. Ed, you mentioned, you recently said you expect some amount of business travel. I think you said 20% will turn out to be unproductive in retrospect and suggesting obviously it's not going to return. So what are some of the specific characteristics of the business travelers that do come back, that might be different from the ones who don't? Like for example, maybe they fly more per year, but to fewer cities, or these are the people that use lounges more often, things like that. So what do these people look like? And how do you win them or keep them?

Well, first of all, Hunter, I think fundamentally, business travel is going to come back and it's going to come back at scale. I'm not the one that thinks that we are in a permanently depressed level of business travel for the foreseeable future. I do think there's a lot of inefficiency, which we can all appreciate in business travel. The number of trips that the average rogue warrior takes, I'm sure is going to come down. In certain cases, the international trips that we've all been on where we've flown over to Europe for a two hour meeting and flown back that does nothing but beat you up, and you'd certainly be much easily better accommodated over a video call. But it's going to be trips that are focused on relationship building, interacting, whether it's with your customers, conventions, new contacts, reviewing performance on a global scale. Those are going to stay. I just don't see there's a substitute for that over time. It will take some time to get back. I don't think we'll ever get back entirely to where we were in 2019 on the volume of business traffic. But the resiliency of the business traffic that we are going to now bake into our business model going forward, I think will be a better way to measure the sustainability of the recovery.

And then another one for you, Ed. When was the last time you talked to Steve Squeri? And what is your single biggest shared commercial concern right now? And what is it that he tells you is most important to preserve the relationship and the economics that your company share?

I talk to Steve all the time. He's not just a great business partner, he's a great friend. And we share our thoughts and strategies together. We are their biggest and most important business partner and American Express is ours in turn. And we're navigating this crisis together in a way that you would expect. I mean, they've seen some meaningful recovery over the course of the quarter in volumes on the card, which is certainly one of our bright spots in a dark quarter, the revenue recovery we're seeing on spend. But they provide a great lens into customer behaviors and the types of things that are going to be very important for Delta to maintain the position we have with the company. So, I continue as Steve does, to be optimistic of the future. We're both realistic, we realize the T&E spend is not going to be at the levels we saw in the prior years. But we're going to both do our very best to build a better future for our respective stakeholders.

Thank you.

And our next question comes from Jamie Baker of JPMorgan.

Hey, good morning, everybody. Paul, question on labor. So, as I see it there are sort of four moving parts here. We've got the voluntary unpaid leaves, which has already dropped off the P&L for now, but some level phase back in, in the future. We've got the early retirement, which will completely drop out. We've got what might happen after October 1st. And then I assume in the event of furloughs, you have some severance expenses. So what I'm trying to reconcile with these various flows is whether the net is that they temporarily give you labor costs relief in the fourth quarter. And that's what gets you to cash breakeven. But then labor costs potentially rise after that. I guess another way of asking is, in what quarter do you think your labor expense line will truly be reflective of the cost structure going forward?

Good morning, Jamie. There's a lot in that question. I think we're still really assessing the overlap right now between the early retirement and the voluntary leave program. So there's a sense of duplication there. But what it does do at an absolute minimum is it puts permanence around what were short-term leaves and volatility. So, we expect that in addition to the leaves that Ed mentioned -- I'm sorry, the separations that Ed mentioned voluntarily. We also have leaves that will continue on top of that. So we're going to continue to assess and see where we stand on the salaries and related line. There's no doubt that that's been a big driver of how we've gotten our cash burn down in quick action. And as we continue to shape the airline for how we think it's going to be sized next summer and into the future, we've got to be able to manage all of that agility and flexibility. And the voluntary leaves are going to continue to be an important piece of that puzzle going forward. So as we think about salaries and related, we should get to that kind of trend line I would think in that fourth quarter, first quarter, but then we'll see as demand shapes back, customers are ultimately going to determine how big the airline is.

Hey Jamie, if I could add a couple thoughts. For the second quarter and the third quarter, we are reducing our total operating expenses by a bit over 50%, which is enormous. And that will continue to be our goal as we progress through the fourth quarter as well. And while the composition of the savings will be more sustainable given the size of the early out, so we have 20% of the company will be exiting. And as you can appreciate it's the senior most 20% of the company as well, which is going to give us an added benefit on top. So there's a lot of creativity and collaboration with our work groups, about reducing work, trying to protect jobs and everyone pitching in to work fewer hours, but to save more jobs. And that's across the company, there's a real spirit of doing that. So, whether I guess in the fourth quarter or first quarter, at some point the labor savings here are sustainable. But to answer your question more specifically, it's really going to be on the commercial side of the business. It's going to be much more important to getting us down to that breakeven level, as demand hopefully starts to grow, picks up once again, as we look into the late summer and fall. And that'll be the more important contributor to getting to a breakeven cash flow position.

Okay, that's very helpful. A second multipart question. How do we think of loyalty in the remaining unencumbered asset pool? Does Delta have that flexibility to do what United did with loyalty in terms of sort of a quasi-securitization of both third party sales and intercompany cash flows? Or did you pledge SkyMiles as part of the loan?

So Jamie, we’re an infinitely competitive business, but hats off to United for that execution, I thought they did a very good job with that. And it's one that I think is available to a multitude of carriers. That is not included in the most recent guidance that we've given of $6 billion to $7 billion of unencumbered assets. And we're looking at all of our options and we’ll continue to keep them open. We have advanced the ball with the government by signing the term sheet, which they announced a couple of weeks ago. And we continue to move along that process, but we have not decided to take a government loan. And we're assessing really all of our options, as well as the environment that we're in.

Thanks for indulging the questions. Take care.

We'll go next to Duane Pfennigwerth of Evercore ISI.

Hey, thanks. Totally agree with the perspective that Delta's been careful with capacity and how you brought it back. Just from an industry perspective, it looked like the industry has guessed wrong on July, at least so far. So schedules indicate your capacity is up about 90%, from June to July yet demand has stalled. So I'm just curious how cash burn can be similar in July versus June? Was it just that we had a good July 4th on the books before demand rolled over? Or is there something going on with debt payments and CapEx?

Well, I'll start with that Duane. First of all, good morning. The trajectory that we've been on and what we articulated through June was that we had seen steadily increasing net sales, that was coming really from both variables. Sales were going up and trending higher, while at the same time refunds have been trending down, which put us from a -- I think at the beginning we said $20 million to $30 million a day, we were burning in March to turning positive and staying there in June. So while we've seen that that sales growth level off in the wake of the latest rise in infections, and has remained relatively stable in that area. So, as we see the continued trajectory of reducing our operating expenses 50%, and keeping those net sales numbers relatively flat, that's where July comes out flat to June.

Okay. Thanks Paul, and maybe I'll stick with you. Just high level, how is your budget for aircraft rent change for this year, as we think about the net impact of a sale leaseback activity versus aircraft retirements? The only reason I bring it up is it looked like the op lease liabilities didn't really change much sequentially. So maybe you can help us understand what's going on under the covers? Thank you.

Yes. I think Duane, we'll take that offline and it'll be more apparent when the Q comes out later today of just the breakdown between financing leases and operating leases, under all the new accounting guidelines. So it's all there, but it has a little bit of a different geography to it, depending on the transactions.

Okay. I'll keep it there. Thank you.

We'll go next to Helane Becker of Cowen.

Thank you very much, operator. I appreciate the time. Hi. So, I have two questions. One is your comments on international and the 777s that are leaving the fleet and some of the 767s. It seemed like you might have to do more pruning there. So, do you like retired enough aircraft do you think? Or do we expect to see more during rest of the year?

Hi, Helane, it's Ed. International is going to lag domestic. I think we have some time to watch how it recovers. The 777 fleet for us was the sub-fleet that made the most sense to sit down. We certainly have additional international capable aircraft that we have a very large 767 fleet with opportunities to early retire, as we get a better sense for where the recovery is. But some of those decisions we have a little bit of time to take it. As I indicated in my remarks, there's more to be done. And we're not investing any money in that fleet, and we can see how international recovery is shaped before we make those final decisions.

Okay, that's very helpful. Thank you. And then my follow-up question really has to do with changes in booking patterns because of increased refunds, or because of more flexibility to people who book and then maybe cancel. So could you just address people booking and then actually showing up for the flights, especially in July? Are you seeing people booking and then canceling at the last instance?

Helane, hi. It's Glenn. How are you doing? We've seen the no show rate -- good. Hope your summer is going well. We see no show rates grow from about 3% historically to about high-single digits. And most people at day of departure who have reservations are showing up for the flight. But the higher no show rates also makes it a little bit harder to revenue manage with the caps. So we've been managing through that. And we hope we can get better and better at that as we move through the fall. But clearly giving people more flexibility is where we need to be as there's so much uncertainty in the virus right now.

Got you. Thanks very much. Since I'm still in paradise prison, my summer is not going as well as I would like. But, thank you for asking.

Right, we're ready to release you, Helane.

Not soon enough. Thank you.

We'll go next to Joe Caiado of Credit Suisse.

Hey, thanks. Good morning. My first question relates to your fleet and actually your order book. Any update on your discussions with Airbus regarding your order book there? And can you describe for us maybe what it is that that you're hoping to achieve there? Do you just want to sort of adjust the timeline for deliveries? Are you looking to restructure sort of the composition of the aircraft in the order book, just any detail there? Thanks.

We are working with Airbus, as you can appreciate, and they've been very good partners with us managing the crisis. Clearly, we're in a situation where we don't need any aircraft. So we have a lot of aircraft on the ground, and doing our best to manage through the next 18 to 24 months to minimize deliveries. We're not ready to make any announcements yet. I can assure you there will be no cash CapEx on any aircraft at Delta for some period of time, certainly through the end of this year. And Airbus has been a very good partner.

Got it. That's very clear on the CapEx. But I was curious, just especially as it relates to your comments on the expected timelines for recovery of domestic versus international. If you'd also be looking to adjust the actual composition of the aircraft that in your order book as opposed to just actually delaying or revising the timeline for the deliveries. And if I could just throw up my second actual follow-up, which is just a quick clarification for Paul. On the stalled demand recovery, did you say the July net bookings are flat with June, so they are positive month-to-date? Can you just describe in a little bit more detail the evolution in those net bookings trend over the last few weeks?

No, that's okay, Joe. On your question Airbus again, we are not providing any specifics at this point, you can rest assured everything that we are doing is pushing a lot of the deliveries to the right. And when we are ready to -- we haven’t reached the final plan with Airbus, when we do reach that plan, we’ll be sure to let you know.

And Joe, on the cash burn, so we had seen a pretty steady progression upwards of sales and slight decline in refunds, really kind of from May to early mid-June. And that’s when we started to see it stabilize. So the data that we have seen so far in July is pretty consistent with what we saw at the end of June, which is really reflective of what we've seen in this latest wave of infection throughout the country. And that’s why we have got the confidence that it's somewhat stabilized here at these levels. And hopefully, if things start to improve we can see improvements of those levels as we get later into the quarter.

Thank you very much.

We’ll go next to Michael Linenberg of Deutsche Bank.

Thanks. Good morning, everyone. Hey Paul, just back to how you are thinking about the ATL as we progress through the quarter? I mean normally under a normal year, the seasonal impact is that as we get to the latter part of the quarter, we tend to see it become a drag on cash, and I realize that this is not a normal year. So, are you sort of expecting that as we get into the latter part of the quarter that we will see it become a drag on the ATL? Or where is your thinking around that right now?

Good morning, Mike. That’s a bit of a doocey [ph] of a question, because I think the one thing we all know is that the historical air traffic liability models have broken right now. It's not behaving in any way that a normalized seasonality pattern would have. As evidence, we have actually refunded now over $2 billion of that ATLs since the beginning of year, which the bulk of that has been done in the post-COVID, post-March 1, timeframe. So, we actually think that a lot of that refund activity particularly in the Trans-Atlantic and International destinations which were already booked pre-COVID heading into the summer, we have refunded a lot of that activity in it. So a little bit of a -- it’s a big contributor to the international cash burn that I gave that comp position in my prepared remarks. So, we can actually see things stabilizing and we would expect that refunds will continue to trend down in the status quo. Obviously, it's going to be choppy, but any new sales data that come in, any new demand should be accretive to the ATL in a way that seasonally you wouldn’t necessarily expect. So, we’re prepared for that. I think the one given is that there is a lot of uncertainty here, which is why we have gone the route of really looking to raise as much liquidity as we can.

Okay. That’s very helpful. And then just maybe this is an easier one, you talked earlier about upcoming maturities and I'll throw CapEx in there as well. As we look to the second part of the year, what is CapEx? I am sure it's probably close to zero now based on everything that you have cut back or deferred. And you did allude or mentioned upcoming maturities, what are the big maturities for the second-half of 2020? Thanks for taking my questions.

Yes, sure. So, we didn’t give any formal CapEx guidance, because it's really the same as we gave immediately after the COVID epidemic, which is we have essentially eliminated all CapEx. There is some technology spend on projects that are already in process and some small purchases here and there, but it’s not material to the overall story. As far as debt maturities go, the biggest one we have is the $450 million maturity in December. When you combine that with a $600 million unsecured in April of '21, that’s the unsecured deal that we just took out. So we’ve already successfully refinanced that. And then we have the $3 billion bridge loan that is due in March, that has collateral attached to it that we haven't decided exactly what to do with that. As part of the amendment to the credit facilities, we also extended by one year a $1.3 billion maturity in April of our revolver. So that's pushed out to 2022. So we've actually gotten a very, very good handle on all of the maturities really for the next 18 months.

Great. Thanks for that.

And we'll go next to Savi Syth of Raymond James.

Hey, good morning. Just a couple of follow-up questions on the cash burn. If we don't get much of an improvement on the commercial side, what do you think you can kind of get the cash burn by the fourth quarter with some of the incremental things that are happening on the cost side?

Hey, good morning, Savi. I think, as we've mentioned in our comments, we're kind of on this trajectory right now as things have stabilized. And we're continuing to assess what the second-half looks like. So as we continue to monitor capacity and demand that'll affect what we do on the cost input side as well. But, I think we're really counting on some continued improvement in demand, however gradual and however choppy that might be. We are 90 days into this and we already know a lot more about the virus. And that's giving a little bit more confidence in the longer and intermediate-term demand profile. But we've got to continue to be agile. So, I think we'll kind of be in this mid-20s level, as we continue to assess. And if we need to take further actions, we will.

Hey, Savi. This is Ed. I don't want anyone to get a sense that we've got a gloomy forecast on revenue or demand growth, not at all. This is expected. We said at the start of this pandemic, that this is going to be choppy. It's going to be unpredictable. It's going to be driven by factors outside of our control. It's really advances on the medical front in containing the virus, it's advances by general public about wearing masks and doing their very best to be cautious and restoring confidence in air travel. I'm optimistic as we get through the late summer in the fall, we're going to see some real improvements here. We need to see improvements. And I think the sensitivity and the caution you hear in our voice for the current month is the fact that we're in the south and we're obviously under -- going back into a more of a closed setting in our local economy then opening. But at the same time, that's for the goal of reopening later this summer and fall to a bit of a better standpoint. So, I do think you're going to see continued improvement in cash burn. Cost on the margin could improve. But when you get more than 50% of your costs out, it's hard to see much more coming out. I think it's going to be the same type of momentum that we saw in June, hopefully reemerging in the latter part of the summer and early fall. That's going to make another material debt in bringing us down to that flat breakeven level.

That makes sense and helpful. And my other follow-up question is just on the business travel commentary. It looks like a lot of probably business travel might not happen until 2021, but just based on your surveys and things like that, is there any level of expectation of what we might see in the fourth quarter here? And kind of tied to that, I mean, there's kind of the block middle seats get removed when demand is stronger, or when the virus is a little bit more contained? What drives those positions?

We're talking to our corporates all the time. As you can appreciate, we're doing a lot of work with them to get them more confident. They are starting to come back. They're in small numbers, but they're starting. And what we've been doing is taking them out with us on tours and seeing the airport. It's interesting for travelers that they spent their life as road warriors, the first time back in this environment it feels very different. And they need to refamiliarize themselves with what it's like and the benefits of air travel. And, I'd say the most significant observation that they give us is that it is actually not only safe, it's significantly better than what their view of air travel was pre-pandemic. So, there is confidence that's returning. I think you're going to see it improve as businesses start to reopen, I'd say post-Labor Day. Businesses start to open up as international operations start to slowly open up. You'll see that will be another driver for business travel. But business travel is going to clearly be at a 12 to 18 months lag, waiting for advances on the medical front, vaccines, therapeutics, reasons to think that it's safe, that companies can safely put their cut -- their employees back out in the road. The other thing, and I mentioned this in one of the interviews I did this morning, is that while the corporations may not be traveling, we know the individuals are traveling. And we see it in the SkyMiles data and our frequent flyer information. So people are learning about the new way of travel and they're telling us it's actually better than it was previous.

And does the block middle seat, is that kind of tied to COVID? Or is that tied to demand levels there?

I'm sorry, I didn't hear that Savi.

Sorry. You mentioned that middle seating block probably continues beyond September. Just wondering what drives that decision?

Well, that's going to be consumer confidence. We're going to hear from customers as to their comfort in travel. We've got a lot of flights that we have to add back yet and opportunities to add flights back before we have to worry about pulling up the middle seats. And, we’ll get there over the course of the end of the year and into early next year. But, right now, I don't see a push to do that. Customers aren't pushing us to do it. And we've got -- I'd rather add more flights back and more seats into the market in the safe way than trying to maximize the number of people you can put on an individual airplane. And I think that would be in consistent with the brand that Delta represents.

It makes sense. Alright. Thank you.

We'll go next to Brandon Oglenski of Barclays.

Hey, good morning everyone, and thanks for taking my question. So, I guess following up on that line of question, if business demand is going to lag here and you have some competitors out there they're going to come out of this without a lot of an incremental debt. What's going to be a competitive landscape? And how do you reposition your network to be more leisure-focused, maybe lower costs? And does that impact the kind of strategy you’re really focusing on the branded products and everything onboard?

Brandon, this is Ed. I'm not sure who you're referring to. Our incremental net debt is $3.5 billion at this point, so I wouldn't suggest that we have added a tremendous amount of increased debt burden on the company. Obviously, there’s a large amount of money that we raised, but we also have a significant amount of cash that we can use to hopefully retire that, once we get through the other side. We're not changing our long-term goal for this company, this brand. We are a business oriented airline. We are a premium oriented airline. And there's nothing that I see from what we've been through the last four months that suggest customers aren't going to value premium, value the quality of the experience, the health of the experience. But we're going to be more resilient, because there's a portion of that trouble that will go away and we'll size our business accordingly. So, I don't see anything that gives me pause. Of course, there's going to be a lot of dislocation, disruption that always happens in this industry during times of crisis, but I think we're pretty well-positioned to come out of this in a relatively stronger competitive position than we were pre-pandemic.

Well, I appreciate that response. And I know that looking forward as anyone's guess here but can you give us any clarity on what and I think maybe Paul alluded to what level of demand you’re expecting to get to cash breakeven by the end of the year? And maybe even more importantly, where you're seeing the sizing of the network for 2021 as you make any difficult decisions?

So, at a really high level Brandon, if you look at our cash burn in June as well as in July and that $27 million a day number, virtually all of that needs to come through improvement in net cash sales. It's going to come in two ways, so one, the refund activity will continue to wind down. That will be a contributor in that and that's probably in the plus or minus $5 million a day improvement by the time we get to the end of the year, and which leaves about $20 million of cash sales improvement. And that's if you think of a company our size is about a 20% improvement in our overall business volume that will get us there. So, we'll probably need to see that $25 million come from the commercial side of the business, but that's still is the roadmap to get to breakeven.

Thank you.

Cecilia, we're going to have time for one more question from the analysts.

Thank you. That question will come from Joseph DeNardi of Stifel.

Thanks. Good morning. Ed, I think over the last few years you and your larger peers have been of the view that the DOJ had kind of put a red light on additional consolidation. I'm wondering if you think that has changed or that it needs the change? And whether the calculus around how much liquidity you think you need takes into account that maybe consolidation is eventually part of the strategy?

Joe, you know we can't speculate on that. Not to be [indiscernible] but that would be a really, really inappropriate response I'd have to give on that.

Okay, fair enough. Paul, can you give us where you guys are year-to-date on mileage sales, cash proceeds? I think you did about $4.2 billion last year. Where are you guys year-to-date?

Yes, we've seen Joe about a 50% reduction in the last quarter. I think if you look at some of American Express's commentary, it's in line to even slightly better than some of the cards in their portfolio, which I think is encouraging. That means that that people remain attached to the brand and they see value in the miles program. So we're going to continue to see that, but it obviously has been far more resilient than the demand for tickets and for travel itself, which is what we expected.

Thank you.

Thank you.

And that's going to wrap the analyst portion of the call. I will turn it over to Tim Mapes, our Chief Marketing and Communications Officer for the immediate portion.

Good morning, everybody. We have about 10 minutes of questions from members of the media. I'd just remind everyone please, just a question and maybe a brief follow-up. We'll try to get through as many as we can.

[Operator Instructions] We'll go first to Robert Silk of Travel Weekly.

Yes, good morning. In the Virgin Atlantic announcement day, they mentioned for their restructuring plan that they're doing this with the support of shareholders, Virgin Group and Delta, as well as some new investors. So I was wondering if there's any color or detail in the matter which Delta is supporting this effort?

Not other than what's already been disclosed, which is that we are contributing through deferral of brand fees, as well as certain other joint venture fees that we would typically earn. We were excited to see the recapitalization come about. It's been an extraordinarily difficult few months holding that together. And all stakeholders have made some meaningful contributions to enable Virgin to fly again. And we're excited about that.

Thanks, Ed.

We'll next to Mary Schlangenstein of Bloomberg News.

Hi. Thank you. Good morning. I wanted to see if you could breakdown for us how much of your second quarter revenue and possibly revenue going forward is from newly purchased tickets versus how much is from what rescheduled flying?

Sure. We have about two-thirds of the revenue coming in from newly purchased tickets and about a third coming in from reissues and credits from postponed journey. So, getting a significant number of new journeys coming in, which is a good sign.

And I assume that the new ticket purchasing fell in this recent sort of slump as well as the reschedule. Is that right?

If I could recharacterize it from a slump to really a much slower growth rate is that the industry had an awful lot of capacity going from June into July. And so what we've seen is in June, we were growing at about 20% every week, week-over-week. And I think maybe in some ways that capacity is going to take a little bit longer to get absorbed, because the growth rates are -- if you take 4th of July out, they're coming in between 5% and 10%, now. So the growth is at a much slower rate. As we look forward, it has slowed but it hasn't stalled. I mean, it's very flattish to up slightly, but it's not a slump.

Okay, thank you.

We'll go next to Dawn Gilbertson of USA Today.

Hi, good morning. I think you mentioned employee coronavirus infections being down, because of all the measures you've put in place. Can we talk about passenger infections? We had the case, the recent case was Endeavor on the flight from Atlanta to Albany. How many instances is Delta seeing, hearing back from passengers after a flight about coronavirus infections and can someone put that into perspective for me? Thank you.

Hi, Dawn. It's really minimal. The flight last week was an Endeavor flight as you mentioned and that was after the fact that those three customers found out. So there's no question that in the general population, there's a virus. And when we do find out, we go back and contact trace with anyone that would have been in the immediate vicinity of a customer. But I can tell you those instances are really, really small. And certainly, no instances that we've been aware of where there's been any transmission on board our planes.

And did that answer your question, ma'am?

Yes, thank you.

We'll go next to Tracy Rucinski of Reuters.

Hi, good morning. I wanted to ask about the outlook for the trainer refinery. Do you have any plans to divest it or stop operations?

Good morning, Tracy. This is Paul. So, the trainer refinery in the quarter we had about $100 million loss in the quarter, which was almost entirely focused in the month of April. So the refinery is continuing to produce economics at breakeven levels on the current trends. And as with everything in the business we're looking at everything. But our plans have not changed with respect to the refinery right now.

And our next question comes from Claire Bushey of Financial Times.

Hi. I wanted to ask whether federal government needs to pass a law requiring mask on airplanes? Or do your flight crews have enough leverage with passengers since they can be banned from flying with the airline?

Hi Claire, this is Ed. I don't know that it needs to pass a law. But I certainly see the opportunity to reinforce the work that the airlines are doing to ensure that customers wear their masks both in the airports as well as onboard our planes is helpful. The airlines are I think are doing a very good job of reinforcing that, as well as candidly customers on board planes. If someone's not wearing a mask, they quickly get pointed out and discussion with our flight attendants occur quickly. So, it's really important that we as a nation comply with mask policy or an industry that's got a lot of regulation. I don't know that we need another regulation around mask wearing, but it'd be helpful but stronger that our federal government can reinforce the need to wear masks, the better. Not just on air travel, but in life, in general.

Thank you.

We'll go next to Leslie Joseph of CNBC.

Hi, good morning. Do you have any idea of how many pilots need to be retrained on different aircraft, given the retirements and then also potential furloughs and just kind of rejiggering of what they're going to be flying and what the cost might be of that?

Leslie, it's really premature. The pilot retirement plan still has almost a week yet to run. So we'll be in a better position to assess that over the next month. And we're continuing to work with Alpha to identify ways to mitigate the need to displace pilots and furlough.

Thank you.

Cecilia, we have time for one final question, please?

The final question comes from David Slotnick of Business Insider.

Hi, how are you? I'm wondering about blocking the middle seat. Have you gotten a sense from passengers or from surveys or anything that people are willing to pay a higher fare to fly a less full airplane?

We have received a lot of customer feedback, and in fact, I would say when we surveyed customers today, about reasons you're purchasing a ticket on Delta, the space onboard the plane, the block middle seats has gone to the number one reason why customers are choosing Delta. They see it consistent with our brand. Everyone appreciates, it's not going to last forever. But in the face of a health crisis, that space onboard really matters and customers are telling that. We're seeing it in our net promoter scores, which have gone up considerably on a year-over-year basis, up 20 points in the month of June over last June, which last year was already a good number. And, we hear it from our corporates, we hear anecdotally from many of our travelers.

And are you looking at charging more of a premium or raising your fares or anything? Or is this more like a brand and marketing investment for later when things stabilize?

It's not a brand or marketing investment, and no, we're not raising our fares to block the middle seat. This is, to us, a really important safety feature and it's a health crisis that we're in our country. By being the most disciplined and put it in terms of the amount of supply and capacity that we're offering, that's benefiting our pricing and yield of course. And that's helping us to have a better price onboard the overall cabin, so indirectly, that is coming through in price. But this is not -- that's not the objective. The objective here is to make certain that we're restoring consumer confidence in air travel and being true to our brand promises.

Thank you.

That will complete the June quarter earnings call. Thank you to everyone for your time and your questions today. Have a great day.

Again, that concludes today's conference. Thank you for your participation today.