Delta Airlines 2006 Annual Report Download - page 102

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Our aircraft order commitments as of December 31, 2006 consist of firm orders to purchase five B-777-200LR aircraft, 10 B-737-700 aircraft and 50
B-737-800 aircraft, including 48 B-737-800 aircraft, which we have entered into definitive agreements to sell to third parties immediately following delivery
of these aircraft to us by the manufacturer starting in 2007. These sales will reduce our future commitments by approximately $2.0 billion during the period
2007 through 2010.
On January 31, 2007, we entered into an agreement to purchase 30 CRJ-900 aircraft from Bombardier Inc., with options to acquire an additional 30
CRJ-900 aircraft. The aircraft will be delivered in two-class, 76 seat configuration between September 2007 and February 2010. We expect these aircraft will
be operated by regional air carriers under contract carrier agreements, and the purchase agreement permits assignment of the aircraft and related support
provisions to other carriers. We have available to us long-term, secured financing commitments to fund a substantial portion of the aircraft purchase price for
the 30 firm orders.
We have signed a letter of intent with a third party to lease 10 B-757-200ER aircraft. These aircraft will be delivered from July 2007 through November 2007
and will be leased for seven years and three months each. We have also signed a letter of intent with a separate third party to lease three B-757-200ER aircraft
which would be delivered to us in the first quarter of 2008, or such earlier dates as the parties may agree, and will be leased for five years.
Contract Carrier Agreements
Delta Connection Carriers
As of December 31, 2006, we had contract carrier agreements with seven regional air carriers (“Connection Carriers”), including our wholly owned
subsidiary, Comair, and six unaffiliated carriers. Except for the agreement with American Eagle Airlines, Inc (“Eagle”) discussed below, the regional air
carriers operate some or all of their aircraft using our flight code, and we schedule those aircraft, sell the seats on those flights and retain the related revenues.
We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other
factors intended to approximate market rates for those services.
During the year ended December 31, 2006, the following five carriers operated as contract carriers (in addition to Comair) pursuant to agreements under
which we pay amounts based on a determination of the costs of operating these flights and other factors. The following table shows the maximum number of
aircraft to be operated for us under, and the expiration date of, our contract carrier agreements with each of these carriers:
Carrier(1)
Maximum
Number of
Aircraft to be
Operated Under
Agreement (1) (2)
Expiration
Date of
Agreement
ASA(2) 161 2020
SkyWest Airlines(2) 98 2020
Chautauqua 39 2016
Freedom 42 2017
Shuttle America 16 2019
(1) The table does not include information regarding Eagle because our agreement with Eagle is structured as a revenue proration arrangement which
establishes a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries.
(2) In our Chapter 11 proceedings, we assumed our obligations under the contract carrier agreements with ASA and SkyWest Airlines. Accordingly,
these agreements are not subject to rejection pursuant to Section 365 of the Bankruptcy Code.
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