Delta Airlines 2007 Annual Report Download - page 10

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Table of Contents
Index to Financial Statements
Competition
We face significant competition with respect to routes, services and fares. Our domestic routes are subject to competition from both new and existing
carriers, some of which have lower costs than we do and provide service at low fares to destinations served by us. In particular, we face significant
competition at our hub airports in Atlanta and New York-JFK from other carriers. In addition, our operations at our hub airports also compete with operations
at the hubs of other airlines that are located in close proximity to our hubs. We also face increasing competition in smaller to medium-sized markets from
rapidly expanding regional jet operators. Our ability to compete effectively depends, in significant part, on our ability to maintain a cost structure that is
competitive with other carriers.
In addition, we compete with foreign carriers, both on interior U.S. routes, due to marketing and codesharing arrangements, and in international
markets. International marketing alliances formed by domestic and foreign carriers, including the Star Alliance (among United Airlines, Lufthansa German
Airlines and others) and the oneworld Alliance (among American Airlines, British Airways and others) have significantly increased competition in
international markets. The adoption of liberalized Open Skies Aviation Agreements with an increasing number of countries around the world, including in
particular the Open Skies agreement with the Member States of the European Union, has accelerated this trend. Through marketing and codesharing
arrangements with U.S. carriers, foreign carriers have obtained access to interior U.S. passenger traffic. Similarly, U.S. carriers have increased their ability to
sell international transportation, such as transatlantic services to and beyond European cities, through alliances with international carriers.
Frequent Flyer Program
We have a frequent flyer program, the SkyMiles® program, which offers incentives to customers to increase travel on Delta. This program allows
program members to earn mileage for travel awards by flying on Delta, Delta Connection carriers and participating airlines. Mileage credit may also be earned
by using certain services offered by program participants, such as credit card companies, hotels, car rental agencies, telecommunication services and internet
services. In addition, individuals and companies may purchase mileage credits. We reserve the right to terminate the program with six months' advance notice,
and to change the program's terms and conditions at any time without notice.
Mileage credits can be redeemed for free or upgraded air travel on Delta and participating airlines, for membership in our Crown Room Club and for
other program participant awards. Travel awards are subject to certain transfer restrictions and capacity-controlled seating. In some cases, blackout dates may
apply. Program accounts with no activity for 12 consecutive months after enrollment are deleted. Miles will not expire so long as, at least once every two
years, the participant (1) takes a qualifying flight on Delta or a Delta Connection carrier, (2) earns miles through one of our program participants, (3) buys
miles from Delta or (4) redeems miles for any program award.
Regulatory Matters
The DOT and the Federal Aviation Administration ("FAA") exercise regulatory authority over air transportation in the U.S. The DOT has authority to
issue certificates of public convenience and necessity required for airlines to provide domestic air transportation. An air carrier that the DOT finds fit to
operate is given unrestricted authority to operate domestic air transportation (including the carriage of passengers and cargo). Except for constraints imposed
by regulations regarding "Essential Air Services," which are applicable to certain small communities, airlines may terminate service to a city without
restriction.
The DOT has jurisdiction over certain economic and consumer protection matters, such as unfair or deceptive practices and methods of competition,
advertising, denied boarding compensation, baggage liability and disabled passenger transportation. The DOT also has authority to review certain joint
venture agreements between major carriers. The FAA has primary responsibility for matters relating to air carrier flight operations, including airline operating
certificates, control of navigable air space, flight personnel, aircraft certification and maintenance and other matters affecting air safety.
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