David i do not consider myself a journalist. No one else would consider myself a journalist. I began to take on a life of 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, whether to do with, energy prices, lots of employees and so forth, but you grew up in a family of nine children. So what is easier, growing up in a family of nine children or running an airline . [laughter] running an airline. [laughter] our family was great im the oldest of nine and i was sharing earlier that when i was five years old, we already had six kids in the house, nine kids sharing three bedrooms and one and a half baths. My dad had a dental practice inside our house, my mom worked for him. Wasnt that busy at times . The interesting thing about it was that growing up, i didnt board an airplane until i was 25 years old. We couldnt afford it. There were too many of us, it wasnt too we were. I recall one of the stark visuals of my childhood. We went on one family trip a year, my dad would get us all in the station wagon, apology to our safety regulators in the audience, no safety belts, car seats, nine of us, my mom, my dad, my grandmother and a station wagon. All piled in, we were allowed to put whatever we could fit in our case for two weeks and that was our family trip. I figured in my subconscious, there has to be a better way to travel. [laughter] im still on that mission. David your mother must be proud that her first child is the ceo of delta, the largest carrier in the world. Does she call you with ideas or complaints . All the time. She gives me her ideas. I asked her when she is traveling, not to tell people who she is. That never lasts. People have told me she applauds at the end of the safety announcement that i do. David you travel on delta yourself. You fly coach . I often fly coach. I find it more interesting back there. David what about the legroom . The legroom is fine. [laughter] what you find when you fly in coach is it is more entertaining because you dont worry about legroom, you see what is going on that is where the real people are. That is where the party is. David lets talk about running an airline generally. To be honest, a lot of people say if you want to run an airline or a big business, go to a Business School or work your way up to be a management expert and so forth, but you were trained as an accountant, great profession, but some people would say the best managers are not cpas. Ed one thing about accountants, i think they get a bad rap because they are all about the numbers, very introverted and into analysis, is that what you learn as an accountant is the numbers are actually the language and vocabulary of business. David for some reason wall street doesnt Value Airline companies as much as you say they should. Why is it wall street doesnt Value Airlines as much as you think they should . Ed we are moving in that direction. We are still not there. Our largest investor is warren buffett. He owns 11 of the company. After years of swearing off the industry he had a saying i love, he says you guys are the chicago cubs of the business world. You not only had a bad decade, you had a bad century. [laughter] so we got our bad century outoftheway and we are now in a place where we have fixed the business. David he changed his mind. He used to say if it capitalist had seen the Wright Brothers take off he would have shot them down. There were no profits in the Airline Industry for 100 years. But that has changed. Ed it has changed and he wouldnt say that today if you were to ask him. This year is the fifth year in a row our profits will be in excess of 5 billion. Your revenues are at what percentage in the u. S. And outside . Ed two thirds u. S. , one third international. David is international more profitable . Ed just the opposite. International is more difficult, planes are bigger, fuel costs more, Service Levels are substantially higher, and ticket prices because there is a lot of competition internationally. We have to make about 80 of our profits in the u. S. David you make a lot of profits, some say, by owning your own refinery. Why do you need your own refinery, you dont trust other people for gasoline . Ed we use a lot of refineries but six or seven years ago, as refineries up and down the east coast were being closed as crude prices were north of 100, we saw that our cost of jet school jet fuel was escalating rapidly. We are paying 25 a barrel on top of crude price just to get jet fuel because we are the most price insensitive consumers of the product. We dont decide each day whether we fuel our planes are not. Any cost refiners have are going to be pushed onto airlines. So we needed to break that curve and get more supply into the market. We have a refinery outside philadelphia, trainer, that we acquired, it was closed for about a year and we put a whole Community Back to work. It was a great story and 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. We had 10 or 12 major Domestic Airlines and now we have three or four. Has deregulation really worked for the American People . Ed it has absolutely worked. One of the changes in the industry that caused problems for years was that we were seen as nothing but a commodity. Price was the sole determinant of what airline you took. We have changed that paradigm and are now competing on quality and service and people. David suppose i say, i want a cheap price but i want good food. Is food a big deal . Ed food is important and we have brought a lot of food back. The industry 15 years ago wound up getting rid of food and basically getting rid of and charging fees. We have come full circle. We reintroduced main cabin food service on a significant number of our aircraft, and in international really improving the quality. David suppose i say i want a cheap fare, i will bring my own food on, but i just want to make sure my luggage isnt lost. What percentage of people lose their luggage . Ed we never lose. We only mishandle. David mishandle. [laughter] [applause] ed we always know where it is. It just takes us a little longer to get to sometimes. David an Airline Executive has basically two companies to buy airplanes from, more or less. More or less, trying to be polite, but more or less, you have boeing or airbus. You fly a lot of boeings and your longest flight is from atlanta to johannesburg, a boeing 777. You chose not to buy the 737 max for reasons that were unrelated to what would later be a problem. Is that an advantage now because you have the airbus three to airbus 321 and that is picking up more capacity, do you take credit for that decision . Ed that was never part of the consideration when making that decision. David when you were in bankruptcy usa or said they wanted to take you over was that , considered a friendly offer . Everyone assumed that was a foregone conclusion. The people of the company stood and said it is not going to happen. David you grew up in poughkeepsie, new york. You went to college at you got your accounting degree. You are an accountant at price waterhouse. Ed i was fortunate at price waterhouse. I moved quickly through the ranks, made partner at too early an age, 33 years old and at that point that was the pinnacle of success. And i said, if i met a company if i am at a company where the pinnacle of success is 32, i need to learn more and continue to develop. I got a call and a friend said pepsis hiring, got introduced to a person at fritolay. I went to dallas, and i have always considered my training at pepsico my postgraduate work, because it is a fascinating company. David you are at fritolay and a headhunter called you and said, how about Delta Airlines . Ed yeah. I was an active business traveler, 80 of my time, a lot internationally, so i already knew how the airlines worked and what needed to fix to make the airlines better. I get there and you actually take a peek behind the curtains and see how complex it is. I never knew what actually went into it, but it was an industry that was fascinating to me because i was a big consumer. David you became Senior Vice President for finance eventually and then became chief financial officer. Then you became the president and became ceo in may 2016. Ed that is correct. David but you had problems before you became ceo and delta filed for bankruptcy in 2005. Why did you file for bankruptcy . Ed it was the aftermath of a series of events which 9 11 triggered. We lost our International Business almost overnight. Competition in the u. S. Was so competitive, so Many Airlines trying to take each others share that cap pushing prices lower and lower. Almost all the airlines ended up filing. David while you were in bankruptcy, usair said they wanted to take you over. Was that a friendly offer . Ed doug parker there, a pretty he will never live that down. We had a pretty hostile takeover battle with them. Its interesting. We were bankrupt at the time at usair offered 10 billion to buy delta, for a company that is not worth anything. Everyone assumed it is going to be a foregone conclusion, and the people of the company stood and said it is not going to happen. We have a Better Business plan and were able to convince creditors to stay with delta, and as a result you have seen what we have been able to do. David you said to the employees and colleagues, we will give you 10 of the profits, is that right . Ed when we went through restructuring, people took a lot of pay cuts, a lot of change, and we made a commitment to the employees then that once we became profitable, 15 of profits would go back to the people, which we honor to this day. David how much did that produce last year . Ed last year we paid 1. 3 billion to our people. David does that mean stock price would be higher if you didnt pay it to them . Ed our stock price would be lower if we didnt pay it david is internet available on all your plans . Planes. Ed almost all our planse. Our smallest regional jets dont have them. Charge for it or not . Can you charge for it or not . Ed we do charge for it, not for good reason. Im a believer we need to make wifi free across all our services and we are working towards that. [applause] david you are the ceo. Presume you have influence. [laughter] ed i do have influence. Our service provider, i call them no go, they have made a lot of progress nows logo and now, slow going. They will get to go go. [laughter] one reason is that planes do not have the technical capacity, and capability yet. If we made it free, the system would crash. Once it gets above a 10 take rate, our performance starts to erode. If you turn it on free, which we tested many times, it is not at the level it needs to be. So we are investing in technical capacity in terms of the satellite spectrum. David you mean we can fly to the moon and back and cant have everybody using internet on the plane at the same time . Ed exactly. You sound like me, david. One thing i say to people, we are closer to the satellites in the sky, why shouldnt they work . We are not traveling 500 miles an hour as we send it home on our wifi via broadband access. David there was a proposal to let people talk on their cell phones on the airplanes, but that was voted down i think by the fcc. Ed that was voted down by me. I will never allow it on delta. Whether they are allow it or not, we will never allow it on delta. [applause] david we havent built a new airport in this country of any size since i think 23 years, denver. Laguardia is being redone and so forth, but why is the Airline Industry, are you responsible for building airports are not . Ed we were building Regional Airports ourselves. We got tired of waiting for the government. Partnerships are out there trying to drive that goat. We have massively improved the onboard experience on the next thing is the airport themselves. Airports in our country were built for the 1960s. Where are you building airports . Everywhere. We are building the new laguardia airport. Airport construction is the most difficult construction because you have to build it and operate it all at the same time. We are building a new airport at lax, salt lake city, seattle, a new international facility, we modernized atlanta. David speaking of government support. You have been an advocate of not allowing airlines to have government subsidies to compete against you. Is that a problem . Ed it is a problem. I have to give the Trump Administration credit for realizing that and reaching agreements with the uae and qatar to stop it. He is freezing where it is at. David what is going to happen . Ed they are being responsive to the administration. Today in the persian gulf 30 airplanes a day fly between the persian gulf and the u. S. , not one a u. S. Airline, they are all middle eastern airlines. If there was a fair playing field, which is what open sky agreements require there is no question that u. S. Airlines would be operating there. We cant because those fares are subsidized. David what about the air Traffic Control system . Some people would say was built in the 1960s and we havent modernized it. Is it out of date . Ed absolutely, but it is absolutely safe but unfortunately it is radar based. Many cars have better gps in the car than we do in terms of what we accessing our planes. And opportunities to improve air Traffic Control are not only speed for customers but the efficiency, sustainability of the environment, an opportunity to make a difference. Government is one of the reasons why the air Traffic Control system, because we have the faa on a fiveyear leash. You cant change air Traffic Control systems with our current funding model. We are advocating with different models to go after a long project. Most countries around the world have better air Traffic Control systems than the u. S. David you have a pattern of meeting with employees fairly regularly. Called velvet programs. Ed when we went through hard times we didnt have a lot of cash and decided that the only way we are going to be successful again in this crowded industry is to reconnect with our people. David what do you do for outside activities . This is a fulltime job, do you have time for anything else . Ed i love to golf, not much time and im not very good at it but i do like golf. Wei du hard work. I think it is important to remind myself when i do serious things, not to take myself too seriously. Its a reminder, to remember the importance of human interaction. I did also run the new york marathon last year. David two hours and . Ed that was the first few miles. [laughter] david you finished . Ed i finished. I wore delta colors loud and proud and raised 2 million for Cancer Research for children. [applause] i dont think im going to be doing another one of those. Im still feeling the effects. David i havent done a marathon. I would fly a marathon. You have a pattern of meeting with employees fairly regularly, call the velvet program. Can you explain what that is . Ed when we went through hard times in the bankruptcy era, we didnt have a lot of cash. We didnt have anything, people were taking pay cuts. We decided the only way we are ever going to be successful again was that we were going to have to reconnect with our people and catch their attention. Our people were downtrodden, years of pay cuts and job losses and all the difficult things we remember from almost 20 years ago. In downtown atlanta there was an abandoned macys, and we decided to take out a couple of floors. Im not sure we ever even paid for it, maybe we just squatted, im not sure they knew we were even in there. We brought all of our employees, 600 or 700 at a time for a day, day and a half, and opportunity to talk about the airline. We had no power points, no slides, we deliberately kept it as uncorporate as possible. We had couches, chairs, curtains, low lights, people would come in the room and see people dancing around and trying to lighten up, no wonder we were bankrupt, they thought, we have a crisis and people are dancing in this abandoned macys. But it got their attention and they focused on what was important. And our people wanted to know that it wasnt their fault that we went through the hard times. So often when companies go through difficult times, employees are made to feel like they are the reason, they are too expensive, they are not productive enough, that they are a cost, when they are really the very best asset you have. And we do the meetings to this day. We can afford to pay for our own space and do Hotel Lobbies and other venues, but we have a dozen a year around the u. S. , we bring people from different disciplines together and talk about the future. I still go to every one of those as i did 15 years ago because that engagement was so critical. David how do you grow the value of your airline . Do you make it more profitable by flying more miles, more acquisitions, is there anything left to buy in this business . Ed the airlines are a mature industry, there are not new places left in the u. S. To fly. We are building bigger airports and bigger planes but not new destinations, so Global Expansion is very important to us at delta and we are doing that through our partnerships in many parts of the world. I think people are more aware of the world than ever before. People want to travel. They want to experience. It is interesting because we are living in probably as divisive a time as we can recall for many years. You would think that would hurt airline travel, but technology and social media, instagram pictures, people want to explore and see for themselves something that they may have read about. Opportunities not only for millennials and younger generation, but also baby boomers and older people. David i would focus on the baby boomers bucket list, because they are going to have to do those sooner than the millennials bucket list, right . [laughter] suppose the president said, you have done a great job, come to the government and help us. What would you say . Ed i would say im happy to advise, but im not sure, ive got my work cut out for me here. David suppose im a graduate, why should i want to work at an airline, or at delta . Ed free travel. Anybody that likes free travel, not only for themselves, but their partner. Its a great business because you are out in the public eye every day. We dont have desk jobs. Our desk job is in the sky. Every day your Work Environment is different, you have different people coming through, and you have to adapt. Think about why people travel. People travel for all reasons on an airplane, happy reasons, sad reasons, business, pleasure, to explore, to meet their grandchild for the first time, and there is all this emotion, roughly 200 people sitting within 40 yards of each other. So it is a social experience as well, and people that want to make the world better. A Christine Lagarde has shattered the Glass Ceiling several times over. She made history as the first woman to serve as the finance chief of a g7 nation. She is the first woman to lead the International Monetary fund woman to behe first elected president of the European Central bank. She is one of the three most powerful women on the planet. I sat down with Christine Lagarde in new york a month