Delta Airlines 2004 Annual Report Download - page 13

Table of Contents
cost per passenger for fuel, food and other direct passenger costs. We do not record a liability for mileage earned by participants who have not reached the
level to become eligible for a free travel award. We believe this is appropriate because the large majority of these participants are not expected to earn a travel
award. We do not record a liability for the expected redemption of miles for non-travel awards since the cost of these awards to us is negligible.
We estimated the potential number of round-trip travel awards outstanding under our frequent flyer program to be 15 million, 14 million and 14 million at
December 31, 2004, 2003 and 2002, respectively. Of these travel awards, we expected that approximately 6 million, 10 million, and 10 million, respectively,
would be redeemed. At December 31, 2004, 2003 and 2002, we had recorded a liability for these awards of $211 million, $229 million and $228 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 2.9 million, 2.8 million and 2.8 million award round-trips on Delta in 2004, 2003 and 2002, respectively. These
round-trips accounted for approximately 8%, 9% and 9% of the total passenger miles flown for 2004, 2003 and 2002, respectively. We believe 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
We participate 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. We have agreed to make available under the CRAF program, during the period
October 1, 2004 through September 30, 2005, a portion of our international range aircraft. As of December 31, 2004, the following numbers of our aircraft are
available for CRAF activation:
Number of
International
Passenger Number of Total
Description of Event Aircraft Aeromedical Aircraft
Stage Leading to Activation Allocated Aircraft Allocated by Stage
I Minor Crisis 5 Not Applicable 5
II Major Theater Conflict 9 12 21
III Total National Mobilization 21 36 57
The CRAF program has only been activated twice, both times at the Stage I level, since it was created in 1951.
Executive Officers
Gerald Grinstein
Chief Executive Officer since January 2004; joined Delta's Board of Directors in 1987; non-executive Chairman of the Board of Agilent Technologies,
Inc. (1999-2002); non-executive Chairman of Delta's Board of Directors (1997-1999); Retired Chairman of Burlington Northern Santa Fe Corporation
(successor to Burlington Northern Inc.) since December 1995; executive officer of Burlington Northern Inc. and certain affiliated companies
(1987-1995); Chief Executive Officer of Western Air Lines, Inc. (1985-1987)
Michael J. Palumbo
Executive Vice President and Chief Financial Officer since May 2004; consultant with Airline Financial Services (2001-2004); Executive Vice President
and Chief Financial Officer at Trans World Airlines (1994-2001); Partner at HPF Associates, Inc., a financial consulting firm (1993-1994); Senior Vice
President and transportation group head at E.F. Hutton (1984-1988); Senior Vice President, Finance, and Treasurer at Western Air Lines, Inc.
(1983-1984); Assistant Treasurer at Pan American World Airways (1977-1983)
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