Delta Airlines 2008 Annual Report Download - page 25

Table of Contents
Index to Financial Statements
Transportation Security Act, which became law in November 2001, mandates the federalization of certain airport security procedures and imposes additional
security requirements on airports and airlines, most of which are funded by a per ticket tax on passengers and a tax on airlines. The federal government has on
several occasions proposed a significant increase in the per ticket tax. The proposed ticket tax increase, if implemented, could negatively impact our revenues.
Proposals to address congestion issues at certain airports or in certain airspace, particularly in the Northeast U.S., have included concepts such as
"congestion-based" landing fees, "slot auctions" or other alternatives that could impose a significant cost on the airlines operating in those airports or airspace
and impact the ability of those airlines to respond to competitive actions by other airlines. Furthermore, events related to extreme weather delays in late 2006
and early 2007 have caused Congress and the DOT to consider proposals related to airlines' handling of lengthy flight delays during extreme weather
conditions. The enactment of such proposals could have a significant negative impact on our operations. In addition, some states have also enacted or
considered enacting such regulations.
Future regulatory action concerning climate change and aircraft emissions could have a significant effect on the airline industry. For example, the
European Commission is seeking to impose an emissions trading scheme applicable to all flights operating in the European Union, including flights to and
from the U.S. Laws or regulations such as this emissions trading scheme or other U.S. or foreign governmental actions may adversely affect our operations
and financial results.
We and other U.S. carriers are subject to domestic and foreign laws regarding privacy of passenger and employee data that are not consistent in all
countries in which we operate. In addition to the heightened level of concern regarding privacy of passenger data in the U.S., certain European government
agencies are initiating inquiries into airline privacy practices. Compliance with these regulatory regimes is expected to result in additional operating costs and
could impact our operations and any future expansion.
Our insurance costs have increased substantially as a result of the September 11 terrorist attacks, and further increases in insurance costs or
reductions in coverage could have a material adverse impact on our business and operating results.
As a result of the terrorist attacks on September 11, 2001, aviation insurers significantly reduced the maximum amount of insurance coverage available
to commercial air carriers for liability to persons (other than employees or passengers) for claims resulting from acts of terrorism, war or similar events. At the
same time, aviation insurers significantly increased the premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S.
government has been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties
(ground damage) and the aircraft hull. The coverage currently extends through March 31, 2009 and the Secretary of Transportation has discretion to extend
coverage through May 31, 2009. The withdrawal of government support of airline war-risk insurance would require us to obtain war-risk insurance coverage
commercially, if available. Such commercial insurance could have substantially less desirable coverage than that currently provided by the U.S. government,
may not be adequate to protect our risk of loss from future acts of terrorism, may result in a material increase to our operating expenses or may not be
obtainable at all, resulting in an interruption to our operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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