Delta Airlines 2009 Annual Report Download - page 10

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Table of Contents
Our arrangements with American 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 Program
Our SkyMiles® frequent flyer program is designed to retain and increase traveler loyalty by offering incentives to customers to increase travel on Delta.
The 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, and
telecommunication 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 program mileage credits can be redeemed for free or upgraded air travel on Delta and participating airlines, for membership in our Delta Sky
Clubs® and for other program participant awards. Mileage credits are subject to certain transfer restrictions and travel awards are subject to capacity-
controlled seating. 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, a Delta Connection carrier or other participating airlines, (2) earns miles through one of
our program participants, (3) buys miles from Delta or (4) redeems miles for any program award.
Cargo
Through the strength of our global network, our cargo operations are able to connect all of the world's major freight gateways. We generate cargo revenues
in domestic and international markets primarily through the use of cargo space on regularly scheduled passenger aircraft. We are a member of SkyTeam
Cargo, a global airline cargo alliance. The alliance, whose other members are Aeromexico Cargo, Air France Cargo, Alitalia Cargo, CSA Czech Airlines
Cargo, KLM Cargo and Korean Air Cargo, offers a global network spanning six continents. This alliance offers cargo customers a consistent international
product line, and the partners work to jointly improve their efficiency and effectiveness in the marketplace.
MRO
Our maintenance, repair and overhaul ("MRO") operations known as Delta TechOps is the largest airline MRO in North America. In addition to providing
maintenance and engineering support for our fleet of approximately 800 aircraft, Delta TechOps serves more than 150 aviation and airline customers from
around the world. Delta TechOps employs approximately 8,800 maintenance professionals and is one of the most experienced MRO providers in the world.
Fuel
Our results of operations are significantly impacted by changes in the price and availability of aircraft fuel. The following table shows our aircraft fuel
consumption and costs for 2007 through 2009.
Gallons Average Percentage of
Consumed(3) Cost(3)(4) Price Per Total Operating
Year (Millions) (Millions) Gallon(3)(4) Expense(3)
2009(1) 3,853 $ 8,291 $ 2.15 29%
2008(2) 2,740 $ 8,686 $ 3.16 38%(5)
2007 2,534 $ 5,676 $ 2.24 31%
(1) Includes Northwest operations for the entire period.
(2) Includes Northwest operations for the period from October 30 to December 31, 2008.
(3) Includes the operations of our contract carriers under capacity purchase agreements.
(4) Net of fuel hedge (losses) gains under our fuel hedging program of $(1.4) billion, $(65) million and $51 million for 2009, 2008 and 2007, respectively.
(5) Total operating expense for 2008 reflects a $7.3 billion non-cash charge from an impairment of goodwill and other intangible assets and $1.1 billion in
primarily non-cash merger-related charges. Including these charges, fuel costs accounted for 28% of total operating expense.
5