Delta Airlines 2002 Annual Report Download - page 12

Possible Legislation or DOT Regulation
A number of Congressional bills and proposed DOT regulations have been
considered in recent years to address airline competition issues. Some of these
proposals would require large airlines with major operations at certain airports
to divest or make available to other airlines slots, gates, facilities and other
assets at those airports. Other measures would limit the service or pricing
responses of major carriers that appear to target new entrant airlines. In
addition, concerns about airport congestion issues have caused the DOT and FAA
to consider various proposals for access to certain airports, including
"congestion-based" landing fees and programs that would regularly withdraw slots
from existing carriers and reallocate those slots (either by lottery or auction)
to the highest bidder or to carriers with little or no current presence at such
airports. These proposals, if enacted, could negatively impact Delta's existing
services and its ability to respond to competitive actions by other airlines.
Worldspan
Delta owns 40% of WORLDSPAN, L.P. ("Worldspan"), a Delaware limited
partnership which operates and markets a computer reservation system ("CRS") and
related systems for the travel industry. Northwest Airlines and American
Airlines own 34% and 26%, respectively, of Worldspan.
On March 3, 2003, Delta, Northwest and American entered into an
agreement to sell their equity interests in Worldspan to a third party. The
completion of this transaction is subject to financing, governmental and
regulatory approvals and other customary closing conditions, the satisfaction of
which cannot be guaranteed.
CRS services are used primarily by travel agents to book airline,
hotel, car rental and other travel reservations and issue airline tickets. The
CRS industry is highly competitive. CRS services are provided by several
companies in the United States and worldwide. In the United States, other CRS
competitors are SABRE, Galileo International and AMADEUS. CRS vendors are
subject to regulations promulgated by the DOT and certain foreign governments.
Orbitz
Delta owns approximately 18% of Orbitz, LLC ("Orbitz"), a Delaware
limited liability company which operates an online travel agency that offers
travel services to consumers and business customers via the Internet. American
Airlines, Continental Airlines, Northwest Airlines and United Airlines also hold
ownership interests in Orbitz.
Consumers use online travel agents for making reservations and
purchasing airline tickets, hotel rooms, rental cars and travel-related
products. The three largest online travel agents in the United States are
Expedia, Travelocity and Orbitz. Online travel agents compete with one another,
with airline websites, with traditional travel agents and with other travel
service providers for travel-related reservations and bookings.
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