Delta Airlines 2003 Annual Report Download - page 32

Table of Contents
are relaxed, or the ability of airlines to challenge such charges is restricted, the rates charged by airports to airlines may increase substantially.
The City of Atlanta, with the support of us and other airlines, has begun a ten year capital improvement program (the "CIP") at the Atlanta Airport.
Implementation of the CIP should increase the number of flights that may operate at the airport and reduce flight delays. The CIP includes, among other
things, a new approximately 9,000 foot full-service runway (targeted for completion in May 2006), related airfield improvements, additional terminal and gate
capacity, new cargo and other support facilities and roadway and other infrastructure improvements. If fully implemented, the CIP is currently estimated by
the City of Atlanta to cost approximately $6.8 billion, which exceeds the $5.4 billion CIP approved by the airlines in 1999. The CIP runs through 2010, with
individual projects scheduled to be constructed at different times. A combination of federal grants, passenger facility charge revenues, increased user rentals
and fees, and other airport funds are expected to be used to pay CIP costs directly and through the payment of debt service on bonds. Certain elements of the
CIP have been delayed, and there is no assurance that the CIP will be fully implemented. Failure to implement certain portions of the CIP in a timely manner
could adversely impact our operations at the Atlanta Airport.
During 2001, we entered into lease and financing agreements with the Massachusetts Port Authority ("Massport") for the redevelopment and expansion of
Terminal A at Logan. The completion of this project will enable us to consolidate all of our domestic operations at that airport into one location. Construction
began in the June 2002 quarter and is scheduled to be completed during 2005. Project costs will be funded with $498 million in proceeds from Special
Facilities Revenue Bonds issued by Massport on August 16, 2001. We agreed to pay the debt service on the bonds under a long-term lease agreement with
Massport and issued a guarantee to the bond trustee covering the payment of the debt service on the bonds. Additional information about these bonds is set
forth in Note 6 of the Notes to the Consolidated Financial Statements.
ITEM 3. LEGAL PROCEEDINGS
In Re Northwest Airlines, et al. Antitrust Litigation. In June 1999, two purported class action antitrust lawsuits were filed in the U.S. District Court for the
Eastern District of Michigan against us, U.S. Airways, Northwest and the Airlines Reporting Corporation, an airline-owned company that operates a
centralized clearinghouse for travel agents to report and account for airline ticket sales.
In the first case, the plaintiffs allege, among other things: (1) that the defendants and certain other airlines conspired with us in violation of Section 1 of the
Sherman Act to restrain competition and assist us in fixing and maintaining anticompetitive prices for air passenger service to and from our Atlanta and
Cincinnati hubs; and (2) that we violated Section 2 of the Sherman Act by exercising monopoly power to establish such prices in an anticompetitive or
exclusionary manner. The complaint asserts that, for purposes of plaintiffs' damages claims, the purported plaintiff class consists of all persons who purchased
a Delta full-fare ticket between June 11, 1995 and the present on routes (1) that start or end at our hubs in Atlanta or Cincinnati;
26