David i do not consider myself a journalist. And nobody else would consider myself a journalist. I began to take on the life of being an interviewer, even though i have a day job of running a private equity firm. How do you define leadership . What is it that makes somebody tick . People say running an airline is not an easy thing to do. You have weather to deal with, Energy Prices to deal with, lots of employees and so forth but , you grew up in a family of nine children, so what is easier . [laughter] growing up in a family of nine children, or running an airline . Ed running an airline, certainly. [laughter] our family was great. I am the oldest of nine. And i was sharing with david earlier that when i was five years old, we already had six kids in the house, nine kids sharing three bedrooms. 1. 5 baths. My dad was a dentist, he had his practice inside our house. And my mom worked for him. David wasnt that busy a practice at times, i guess [laughter] ed he must have had some gaps in his schedule. But the interesting thing about growing up, i didnt board an airplane until i was 25 years old. David really . Ed we could not afford it. Too many of us, and it just wasnt who we were. I always recall one of my most stark visions from my childhood, we went on family trip a year. One my dad would get us all in the station wagon. Apologies to our safety friends and regulators in the audience, but there were no seat belts, no car seats. There were nine of us, my mom, my dad, my grandmother in the station wagon, all piled in. We were allowed to put whatever we could fit in our pillowcase. And brought it for two weeks. And that was our family trip. So i must have figured somewhere in my unconscious that there has to be a better way to travel. [laughter] i am still pursuing that mission to this day. David your mother must be proud that her son, her oldest son is the ceo of Delta Airlines, the largest u. S. Air carrier. Ed the largest carrier in the world. David that she ever call you with ideas or complaints . Or not that much . Ed all the time. All the time. She gives me her ideas. I always ask her please, when she is traveling not to tell anybody who she is. That never lasts. I have called her people have told me she applauds at the end of the safety announcement that i do at the front end of the plane. [laughter] it is kind of cute. David you travel on delta yourself, so you fly coach . Ed often. I find it more interesting back there. David what about the legroom . Ed the legroom is fine. [laughter] what you find when youre flying coach is that its more entertaining, so you dont worry about your legroom. You see what else is going on. That is where the real people are. That is where the party is. David ok. So lets talk about running an airline generally. To be honest, there are a lot of people that say, if you want to run an airline or run a big business, go to a Good Business school or work your way up to be a management expert, and so forth, but you were trained as an accountant which is a great , profession, but some people would say that the best managers in the world are not cpas. Ed one of the things about accountants that i think they get a bad rap is that they all are all about the numbers, very introverted, very into their analysis, is that what you learn as an accountant is the numbers are actually the language and the vocabulary of business. David for some reason, wall street doesnt Value Airline companies as much as you would say they should. Why is it that wall street does not Value Airlines as much as you think they should . Ed well, we are moving in that direction. We are still not there. Our largest investor is warren buffett. He now owns 11 of delta. And warren, after years of having sworn off the industry, had a saying which i love he said you guys are the chicago , cubs of the business world. You not only had a bad decade, you had a bad century. [laughter] david right . Ed so we got our bad century out of the way. And we are now in a place where we have really fixed the business. David you changed his mind, because he used to say, if a capitalist had been at kitty hawk seeing the Wright Brothers take off, he wouldve shot them down. Because there were no profits made in the Airline Industry for 100 years when you compare the profits versus the losses, but that has changed a bit now . Ed it has changed. He wouldnt say that today if you were to ask him. This year will be the fifth year in a row our profits have been in excess of 5 billion. David ok, and your revenues are what percentage in the u. S. , what percentage outside . Ed our revenue is about two thirds u. S. , one third international. David international, is that more profitable than u. S. Generally because of the long flights . Ed no, no. It is actually just the opposite. International is more difficult to get to. The planes are bigger, the fuel costs more, the Service Levels obviously are substantially higher, and ticket prices, because theres a lot of competition internationally, are more suppressed. We actually make about 80 of our profits in the u. S. Closer to home. David you make a lot of profits, some people say, by owning your own refinery. Why do you need your own refinery . You dont trust other people to get gasoline to you . Ed well, we do, and we certainly use a lot of refineries. But about six or seven years ago, as refineries up and down the east coast were being closed when oil prices and crude prices were well north of 100, we saw that our cost of jet fuel was escalating. We were in fact paying another 25 a barrel on top of the crude prices to get jet fuel. Because we are the most priceinsensitive consumers of that product. We dont decide each day whether we fuel up our planes or not. We tell them six months out that we are coming, so any of the costs refiners have were being pushed onto the airlines. So we needed to break that curve and get more supply in the market. We have got a great refinery outside of philadelphia that we acquired. We opened it it was closed for about a year we put a whole Community Back to work. And it was a great story. To this day, it has been very profitable. We have earned our returns on that many fold. David in the 1970s, there was a big push for airline deregulation. Prices had been set by the icc. Ed thats right. David we then probably had 10 or 12 major domestic airlines. Now we have, more or less, three or four. So has deregulation really worked for the American People or has it not worked . Ed it has absolutely worked. One of the changes in the industry that caused problems for years, was that we were seen as a commodity. Price was almost the sole determinant of what airline you took. We have changed that paradigm where we are now competing on quality, service and people. David suppose i say i want a cheap price but i want some good food. Is food a big deal to people who fly these days . Ed food is important. We have brought a lot of food back. The industry 15 years ago wound up getting rid of food, getting rid of basically anything and wound up charging fees galore. We have come full circle. We have reintroduced main cabin Food Services on a significant number of our aircraft. And in international, really improving the overall quality. David suppose i say i want a cheap fare i dont care about food. I will bring my own food on can you bring your own food on . Ed you can bring your own food on. David bring my own food on, and i just want to make sure my luggage is not lost. What percentage of people actually lose their luggage . Ed we never lose. We call them mishandled. David mishandled. [laughter] [applause] ed we always know where it is, it just takes us a little longer to get to sometimes. [laughter] david when you are an airline executive, you basically have two companies you can buy planes from more or less. , ed two, not more or less. David more or less i was trying to be polite but more or less. You have boeing and you have airbus. You fly a lot of boeings. In fact, your longest flight is from atlanta to johannesburg, 17 hours . Ed thats right. David and thats a boeing 777 . Ed thats right. David but you chose not to buy the 737 max, for reasons unrelated to what later became a problem. Is that an advantage to you now, because you have the airbus 321 and that has given you more capacity than some of your competitors, and you take credit for that decision or was that luck . What happened . Ed i put that solely in the rather be lucky than smart category. We are big fans of boeing, and were hoping to see the max fly quickly into the skies, but safety was never a part of the consideration set in making that decision. David while you are in bankruptcy, u. S. Air said, we want to take you over. Was that considered a friendly offer at the time . Ed everybody assumed that was going to be a foregone conclusion. The people of the company stood and they said, that is not going to happen. David you grew up in poughkeepsie . Ed poughkeepsie, new york. David you went to college at . Ed Saint Bonaventure university. David you got your accounting degree. So you are minding your business, you are an accountant at price waterhouse. So what were you doing at fritolay . Ed i was fortunate at price waterhouse, i moved quickly through the ranks there, made partner probably too early in age, when i was 32, 33 years old. At that point, in that profession, that was kind of the pinnacle of success. I said, well, if i am in a company where the pinnacle of success is 32, i need to go someplace to learn more and continue to develop. I got a call from a friend that said pepsi was hiring, and introduced me to a person in fritolay down in texas. I moved down to dallas at fritolay. And i dont have a graduate degree. I just went to an undergrad at Saint Bonaventure. I always considered to this day my training at pepsico, my seven years spent there as my postgraduate work because it is a fascinating company. David you are at fritolay and then a headhunter called you and said, how about Delta Airlines . Ed yeah. Yeah. I was an active business traveler. I was traveling 80 of my time, a lot internationally. So i thought i already knew how the airlines worked. And i knew all the things that needed to be fixed about the airlines to make it better. Of course, i get there and you actually take a peek behind the curtain and see how complex it is. Well, i never understood what actually went into it, but it was an industry that was fascinating to me because i was a big consumer of it. David so you became a Senior Vice President for finance eventually then you became the , chief financial officer. Ed chief financial officer. David then you became the president , then the ceo in may of 2016, right . Ed thats correct. David you had some problems before you became the ceo and ultimately, delta filed for bankruptcy in 2005. Why did you have to file for bankruptcy . Ed well, it was the aftermath, really, of a series of events which 9 11 triggered. We lost our International Business almost overnight. The competition in the u. S. Was so competitive, with so Many Airlines trying to take each others share, pushing prices lower and lower. Almost all the airlines wound up filing. David while you are in bankruptcy, usair said they want to take you over. Was that considered a friendly offer . Ed doug parker will never live that down. No, we had a pretty hostile takeover battle. Ive got an interesting story. We were bankrupt, we werent worth anything at the time. Usair came in and offered 10 billion to buy delta for a company that is not worth anything. So everyone assumed, well, thats going to be a foregone conclusion. The people of the company stood, and they said, it is not going to happen. We have a better idea, we have a Better Business plan. We are able to convince the creditors through the restructuring process to stay with delta, and as a result of that you see what we have been able to do. David as part of that, what happened is, you said to the employees and your colleagues, we will give you 10 of the profits to the employees, is that more or less right . Ed when we went through the restructuring, people took a lot of pay cuts. Benefit losses, a lot of change. And we made a commitment to the employees then at that point that once we became profitable, 15 of the profits would go back to the people, which we honor to this day. We still do. David so how much did that produce, lets say, last year for employees . Ed last year, we paid 1. 3 billion to our people in profit sharing. David does that mean your stock price would be higher if you did not pay it to them, or you have happier employees . Ed i think our stock price would be lower if we didnt pay it. David is internet available on all your planes . All your planes . Ed it is available on almost all of our planes. Our smallest regional jets do not have them but wifi is on all of them. David you charge for it . Ed we do charge for it. Not for a good reason. I am a Firm Believer that we need to make wifi free across all of our services, and we are working towards that. [applause] david you are the ceo. So you presumably have some influence. [laughter] ed well, i do have influence. They have heard me hundreds of times on this, including gogo, which is our service provider. I always tease them, i call them nogo. They have made a lot of progress, now slowgo, and they will eventually get to gogo. [laughter] ed one of the reasons why this is not a good reason why we charge you dont pay for internet practically anywhere else is that planes do not have the technical capacity and capability yet, that if we made it for free, the system would crash. So once it gets about above a 10 take rate on board, the performance starts to erode. And if you turned it on for free, which we have tested many times, it is still not at the level it needs to be. So we are investing heavily in the technical capacity in terms of the satellite spectrum. David you mean that we can fly to the moon and back, and we cant have everybody using the internet on the plane at the same time . Ed thats exactly you sound like me, david. One of the things i tell people is we are closer to the satellites in the sky, why shouldnt it move faster . But as they remind me, we are not traveling 500 Miles Per Hour as we are sitting at home with our wifi broadband. David now, there was a proposal a while ago for airlines to let people talk on their cell phones on airplanes, but that was voted down by the fcc because a lot of people do not like it. Ed that was voted down by me. I will never allow that on delta. Whether they allow it or not, we are not allowing it on delta. [applause] david ok. All right. Now, we havent built a new airport in this country of any size since, i think 23 years in denver. Now laguardia is being redone and so forth. Why is the Airline Industry you are responsible for helping to build the airports or not . Ed we are actually building airports ourselves. We got tired of waiting for the government partnerships out there that are trying to crack that code. So we have massively improved the flight experience, the onboard experience. The next thing is the airports themselves. The airports in our country were built for the 1960s. David but you are building airports where . Ed we are building airports everywhere. We are building the new laguardia airport, delta on its own balance sheet, building that it is going to take a few years. , airport construction is the most difficult construction that is done because you have to build it, live, and operate it at the same time. We are building a new airport in lax, a new airport in salt lake city. We are building a new airport in seattle, a new international facility. We modernized atlanta. David speaking of government support, you have been an advocate for not allowing airlines that have government subsidies to compete against you. And is that a big problem . Ed it is a big problem. And i have to give the Trump Administration great credit for recognizing that and reaching agreements with the uae and qatar last year to draw attention to it and stop it or , at least freezing where its at. David are they doing anything about it . What is going to happen . Ed i think they absolutely are being responsive to the administration. Today in the persian gulf, there are 30 airplanes a day that fly between the persian gulf and the United States, not one of them is a u. S. Airline. They are all by the middle eastern airlines. If there was a fair playing field, which is what the open sky agreements require, there is no question that the u. S. Airlines would be operating, but we cant, because those fares are subsidized, and the costs are paid for by the government. David the air Traffic Control system some people say that it , was invented in the 1950s and 1960s and they have not modernized much. Is it really out of date . Ed thats true. Absolutely. David what are you doing about that . What can you do . Ed it is absolutely safe, but unfortunately, it is radar based. Many cars have better gps than we do in terms of what we are able to access in our airplanes. The opportunities to improve the air Traffic Control system are not only speed for the customers, but it is the efficiency, sustainability of the environment, the opportunity to make a difference. Government dysfunction has been one of the reasons why the air Traffic Control system because weve got the faa on a fiveyear leash. You cant change out the air Traffic Control systems with our current funding models. That is why we have been advocating for different models, to actually go after longterm project. Y most countries around the world have better air Traffic Control systems than the u. S. Does. David you have a pattern of meeting with employees fairly regularly called the velvet program. Ed so when we went through our hard times, we did not have a lot of cash. And we decided the only way we were ever be successful again because delta has a proud history is that we were going to have to reconnect with our people. David so today, what do you do for outside activities there . This is a fulltime job, obviously, but do you have time for anything else . Ed i love to golf. I dont get much time and i am not very good at it, but i do enjoy that. We do serious work. We do hard work.