Delta Airlines 2008 Annual Report Download - page 9

Table of Contents
Index to Financial Statements
with Air France and NWA has a transatlantic joint venture agreement with KLM. These agreements provide for the sharing of revenues and costs on
transatlantic routes, as well as coordinated pricing, scheduling, and product development on included routes.
In 2007, Delta entered into its joint venture agreement with Air France to share decision making, revenues and costs on transatlantic routes. The initial
implementation of the joint venture in April 2008 included flights operated by both carriers between Air France's Paris-Charles de Gaulle, Paris-Orly and
Lyon hubs and our Atlanta, Cincinnati, NewYork-JFK and Salt Lake City hubs, as well as all flights between London Heathrow Airport and the U.S., with
plans for the joint venture to be extended to all transatlantic flights operated by Air France and Delta between North America and Europe and the
Mediterranean, as well as all flights between Los Angeles and Tahiti by 2010.
In 1992, NWA entered into its joint venture agreement with KLM to share decision making, revenues and costs on transatlantic routes. Pursuant to this
joint venture, NWA and KLM operate an extensive transatlantic network, including operating joint service between Amsterdam and cities in the U.S., Canada
and Mexico, as well as between Amsterdam and India.
Delta, NWA, Air France and KLM are currently negotiating the terms for implementing a combined transatlantic joint venture, which is expected to be
implemented no later than November 2009 and would replace the separate joint ventures described above.
In May 2008, we, NWA, Air France, Alitalia, CSA Czech Airlines and KLM received limited antitrust immunity from the DOT that enables us and our
immunized partners to offer a more integrated route network and develop common sales, marketing and discount programs for customers. The DOT
conditioned the continued effectiveness of this antitrust immunity on the implementation within 18 months of a joint venture agreement among us, NWA, Air
France and KLM. A more integrated joint venture would offer significant advantages to consumers, including more choice in flight schedules, travel times,
services and fares. In light of the recent reorganization of Alitalia and its subsidiaries under a new structure with C.A.I. Compagnia Aerea Italiana S.p.A.,
Delta and NWA have suspended immunized activities with Alitalia (but not codesharing, reciprocal frequent flyer program benefits, shared or reciprocal
access to passenger lounges or other alliance marketing activities) while we seek to transfer the above-described antitrust immunity to the new Alitalia.
Domestic Alliances
We and NWA have entered into marketing alliances with (1) Continental (including regional carriers affiliated with Continental) and (2) Alaska and
Horizon, each of which includes mutual codesharing and reciprocal frequent flyer and airport lounge access arrangements. Delta also has frequent flyer and
reciprocal lounge agreements with Hawaiian Airlines, and a codesharing agreement with American Eagle Airlines ("American Eagle"). NWA also has
frequent flyer and codesharing agreements with several other airlines, including American Eagle, Gulfstream International Airlines, Hawaiian, and Midwest
Airlines. These marketing relationships are designed to permit the carriers to retain their separate identities and route networks while increasing the number of
domestic and international connecting passengers using the carriers' route networks. Continental has provided written notice to Delta and NWA of the
termination of its participation in marketing alliances with Delta and NWA effective July 31, 2009 and April 14, 2009, respectively. We plan to wind down
the relationships with Continental in an orderly manner and do not expect the termination of the alliances to have any significant impact.
Regional Carriers
Delta and NWA have air service agreements with multiple domestic regional air carriers that feed traffic to our route system by serving passengers
primarily in small- and medium-sized cities. These arrangements enable us to increase the number of flights we have available in certain locations, to better
match capacity with demand and to preserve our presence in smaller markets. Approximately 23% of our passenger revenue in 2008 related to flying by
regional air carriers.
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