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Delta Air Lines CEO Talks 2020 Outlook, Wheels Up Stake: 'Demand Is Great'

Jayson Derrick

Ahead of Delta Air Lines, Inc.'s (NYSE: DAL) investor day presentation, the airliner said it expects to earn $6.75 to $7.75 per share in 2020 and show revenue growth of 4% to 6%.

Delta's Strength At Home

2019 was likely the best year in Delta's history, highlighted by last Sunday being its single largest revenue day in history at nearly $200 million, CEO Ed Bastian told CNBC's Phil LeBeau. The strong momentum is expected to carry over to 2020 as "demand is great" with notable strength coming from the strength of the U.S. consumer.

The American market accounts for around 70% of Delta's entire business and should help support a new "baseline" free cash flow outlook of $4 billion per year, the CEO said.

International Market

The international market is a "bit more choppy" but part of Delta's guidance calls for growth across every single region in the world in terms of capacity, Bastian said. To help achieve the guidance, Delta secured several investments, including a stake in LATAM and a 10% stake in Korean Air.

China poses its sets of challenges but remains a small market for Delta and accounts for a low-single digit percent of total revenue, he said.

Delta's Stake In Wheels Up

Delta also announced a minority stake in a private-jet operator called Wheels Up. The agreement calls for Delta merging its private jets into the Wheels Up platform as a way to extend the Delta brand. Once finalized, the partnership will create what could be the world's largest fleet of private jets with nearly 200 planes.

"We think there is a great opportunity to make private air travel more affordable and more accessible," Bastian said.

Delta's stock traded higher by 2.1% at $56.26 per share at time of publication.

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