Delta Airlines 2002 Annual Report Download - page 10

Delta is also subject to various other federal, state, local and
foreign laws and regulations. The DOJ has jurisdiction over airline competition
matters. The U.S. Postal Service has authority over certain aspects of the
transportation of mail. Labor relations in the airline industry are generally
governed by the Railway Labor Act. Environmental matters are regulated by
various federal, state, local and foreign governmental entities.
Fares and Rates
Airlines are permitted to set ticket prices in most domestic and
international city pairs without governmental regulation, and the industry is
characterized by significant price competition. Certain international fares and
rates are subject to the jurisdiction of the DOT and the governments of the
foreign countries involved. Most of Delta's tickets are sold by travel agents,
and fares are subject to commissions, overrides and discounts paid to travel
agents, brokers and wholesalers.
Route Authority
Delta's flight operations are authorized by certificates of public
convenience and necessity and, to a limited extent, by exemptions issued by the
DOT. The requisite approvals of other governments for international operations
are provided by bilateral agreements with, or permits or approvals issued by,
foreign countries. Because international air transportation is governed by
bilateral or other agreements between the United States and the foreign country
or countries involved, changes in United States or foreign government aviation
policies could result in the alteration or termination of such agreements,
diminish the value of Delta's international route authorities or otherwise
affect Delta's international operations. Bilateral agreements between the United
States and various foreign countries served by Delta are subject to
renegotiation from time to time.
Certain of Delta's international route and codesharing authorities are
subject to periodic renewal requirements. Delta requests extension of these
authorities when and as appropriate. While the DOT usually renews temporary
authorities on routes where the authorized carrier is providing a reasonable
level of service, there is no assurance of this result. Dormant route authority
may not be renewed in some cases, especially where another U.S. carrier
indicates a willingness to provide service.
Competition
Delta faces significant competition with respect to domestic and
international routes, services and fares. All domestic routes served by Delta
are subject to competition from both new and existing carriers, and service over
virtually all of Delta's domestic routes is highly competitive. On most domestic
and international routes, the Company competes with at least one, and usually
more than one, scheduled passenger airline. Delta also competes with all-cargo
carriers, charter airlines and, particularly on its shorter routes, with surface
transportation.
7