Delta Airlines 2008 Annual Report Download - page 10

Table of Contents
Index to Financial Statements
Through our regional carrier program, we have contractual arrangements with ten regional carriers to operate regional jet and, in certain cases, turbo-
prop aircraft using our "DL" and "NW" designator codes. In addition to our wholly-owned subsidiaries, Comair, Compass and Mesaba, we have contractual
arrangements with Atlantic Southeast Airlines, Inc., a subsidiary of SkyWest, Inc. ("SkyWest"); SkyWest Airlines, Inc., a subsidiary of SkyWest; Chautauqua
Airlines, Inc., a subsidiary of Republic Airways Holdings, Inc. ("Republic Holdings"); Shuttle America Corporation, a subsidiary of Republic Holdings;
Freedom Airlines, Inc., a subsidiary of Mesa Air Group, Inc.; Pinnacle Airlines, Inc.; and American Eagle.
With the exception of Eagle and a portion of SkyWest Airlines as described below, these agreements are capacity purchase arrangements, under which
Delta and NWA control the scheduling, pricing, reservations, ticketing and seat inventories for the regional carrier's flights operating under our "DL" and
"NW" designator codes, and we are entitled to all ticket, cargo and mail revenues associated with these flights. 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. These capacity purchase agreements are long-term agreements, usually with initial terms of at least ten years, which grant us the option to
extend the initial term and provide us the right to terminate the entire agreement, or in some cases remove some of the aircraft from the scope of the
agreement, for convenience at certain future dates. Our arrangements with Eagle, limited to certain flights operated to and from the Los Angeles International
Airport, as well as a portion of the flights operated for us by SkyWest Airlines, are structured as revenue proration agreements. These proration agreements
establish a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries.
Frequent Flyer Programs
Delta and NWA both have frequent flyer programs, which are designed to retain and increase traveler loyalty by offering incentives to customers to
increase travel on each airline. We are in the process of integrating these programs with a goal of combining the programs by the beginning of 2010.
Delta's SkyMiles® program allows program members to earn mileage for travel awards by flying on Delta, Delta's regional carriers and other
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.
SkyMiles 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.
NWA's frequent flyer program is known as "WorldPerks." Under the WorldPerks program, miles are earned by flying on NWA or its alliance partners
and by using the services of program participants for such things as credit card use, hotel stays, car rentals and other activities. NWA sells mileage credits to
alliance and non-airline program participants. WorldPerks members accumulate mileage in their accounts and later redeem mileage for free or upgraded travel
on NWA and alliance participants. WorldPerks members that achieve certain mileage thresholds also receive enhanced service benefits from NWA such as
special service lines, advance flight boarding and upgrades.
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