Delta Airlines 2002 Annual Report Download - page 17
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earn a travel award. Delta does not record a liability for the expected
redemption of miles for non-travel awards since the cost of these awards to
Delta is negligible.
Delta estimated the potential number of round-trip travel awards
outstanding under its frequent flyer program to be 13.7 million, 13.1 million
and 12.2 million at December 31, 2002, 2001 and 2000, respectively. Of these
travel awards, Delta expected that approximately 10.0 million, 9.6 million, and
9.2 million, respectively, would be redeemed. At December 31, 2002, 2001 and
2000, Delta had recorded a liability for these awards of $228 million, $226
million and $199 million, respectively. The difference between the round-trip
awards outstanding and the awards expected to be redeemed is the estimate, based
on historical data, of awards which will (1) never be redeemed; or (2) be
redeemed for something other than award travel.
Frequent flyer program participants flew 2.8 million, 2.4 million and
2.3 million award round-trips on Delta in 2002, 2001 and 2000, respectively.
These round-trips accounted for approximately 9%, 8% and 7% of the total
passenger miles flown for 2002, 2001 and 2000, respectively. Delta believes that
the relatively low percentage of passenger miles flown by SkyMiles members
traveling on program awards and the restrictions applied to travel awards
minimize the displacement of revenue passengers.
Civil Reserve Air Fleet Program
Delta participates in the Civil Reserve Air Fleet ("CRAF") program,
which permits the U.S. military to use the aircraft and crew resources of
participating U.S. airlines during airlift emergencies, national emergencies or
times of war. Delta has agreed to make available under the CRAF program, during
the period October 1, 2002 through September 30, 2003, up to 100% of its
international range aircraft. As of March 27, 2003, the following number of
Delta aircraft are available for CRAF activation:
Number of
International Number of
Passenger Aeromedical Total
Description of Event Aircraft Aircraft Aircraft
Stage Leading to Activation Allocated Allocated by Stage
--------- --------------------------- ------------- -------------- --------
I Minor Crisis 3 Not Applicable 3
II Major Theater Conflict 11 19 30
III Total National Mobilization 37 35 72
On February 8, 2003, the CRAF program was activated at Stage I. Delta
anticipates no material impact on its operations as a result of this activation.
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