Delta Airlines 2008 Annual Report Download - page 21

Table of Contents
Index to Financial Statements
Certain of our credit facilities include financial and other covenants that impose restrictions on our financial and business operations.
The exit facility financing credit agreements of Delta and NWA and the liquidity facility credit agreement of NWA each contain financial covenants
that require Delta or NWA, respectively, to maintain a minimum fixed charge coverage ratio, minimum unrestricted cash reserves and minimum collateral
coverage ratios. In addition, each of the credit facilities contains other negative covenants customary for such financings. These covenants may have a
material adverse impact on our operations. In addition, if we fail to comply with the covenants in any credit facility and are unable to obtain a waiver or
amendment, an event of default would result under that facility.
Each of the credit facilities also contains other events of default customary for such financings. If an event of default were to occur, the lenders could,
among other things, declare outstanding borrowings under the respective credit facilities immediately due and payable, and our cash may become restricted.
We cannot provide assurance that we would have sufficient liquidity to repay or refinance borrowings under any of the credit facilities if such borrowings
were accelerated upon an event of default. In addition, an event of default or declaration of acceleration under any of the credit facilities could also result in an
event of default under other financing agreements of Delta and NWA.
Employee strikes and other labor-related disruptions may adversely affect our operations.
Our business is labor intensive, utilizing large numbers of pilots, flight attendants and other personnel. Approximately 42% of our workforce is
unionized. Strikes or labor disputes with our unionized employees may adversely affect our ability to conduct business. Relations between air carriers and
labor unions in the U.S. are governed by the Railway Labor Act, which provides that a collective bargaining agreement between an airline and a labor union
does not expire, but instead becomes amendable as of a stated date. The Railway Labor Act generally prohibits strikes or other types of self-help actions both
before and after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required by the Railway Labor
Act have been exhausted.
In addition, if we or our affiliates are unable to reach agreement with any of our unionized work groups on future negotiations regarding the terms of
their collective bargaining agreements or if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages,
subject to the requirements of the Railway Labor Act. Likewise, if third party regional carriers with whom we have contract carrier agreements are unable to
reach agreement with their unionized work groups on current or future negotiations regarding the terms of their collective bargaining agreements, those
carriers may be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act, which could have a negative impact on our
operations.
The ability to realize fully the anticipated benefits of our merger with Northwest may depend on the successful integration of the businesses of Delta
and Northwest.
Our merger with Northwest involves the combination of two companies which operated as independent public companies prior to the merger. The
combined company will be required to devote significant management attention and resources to integrating its business practices and operations. It is
possible that the integration process could result in the loss of key employees, diversion of each company's management's attention, the disruption or
interruption of, or the loss of momentum in our ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could
adversely affect our ability to maintain relationships with customers and employees or our ability to achieve the anticipated benefits of the merger, or could
reduce our earnings or otherwise adversely effect our business and financial results.
The integration of the Delta and NWA workforces will present significant challenges, including the possibility of labor-related disagreements that may
adversely affect our operations.
The successful integration of Delta and Northwest and achievement of the anticipated benefits of the combination depend significantly on integrating
Delta's and NWA's employee groups and on maintaining productive employee relations. The integration of Delta and NWA workforces will be challenging in
part because
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