Delta Airlines 2009 Annual Report Download - page 27

Table of Contents
In recent years, some airports have increased or sought to increase the rates charged to airlines to levels that we believe are unreasonable. The extent to
which such charges are limited by statute or regulation and the ability of airlines to contest such charges has been subject to litigation and to administrative
proceedings before the DOT. If the limitations on such charges are relaxed, or the ability of airlines to challenge such proposed rate increases is restricted, the
rates charged by airports to airlines may increase substantially.
The City of Atlanta is currently implementing portions of a 10 year capital improvement program (the "CIP") at the Atlanta airport. Implementation of the
CIP should increase the number of flights that may operate at the airport and reduce flight delays. The CIP includes, among other things, a 9,000 foot full-
service runway that opened in May 2006, related airfield improvements, additional terminal and gate capacity, new cargo and other support facilities and
roadway and other infrastructure improvements. The CIP will not be complete until at least 2012, with individual projects scheduled to be constructed at
different times. A combination of federal grants, passenger facility charge revenues, increased user rentals and fees, and other airport funds are expected to be
used to pay CIP costs directly and through the payment of debt service on bonds. Certain elements of the CIP have been delayed, some may be eliminated and
there is no assurance that the CIP will be fully implemented. Failure to implement certain portions of the CIP in a timely manner could adversely impact our
operations at the Atlanta airport.
ITEM 3. LEGAL PROCEEDINGS
First Bag Fee Antitrust Litigation
In May, June and July, 2009, a number of purported class action antitrust lawsuits were filed in the U.S. District Courts for the Northern District of
Georgia, the Middle District of Florida, and the District of Nevada, against Delta and AirTran Airways ("AirTran").
In these cases, the plaintiffs originally alleged that Delta and AirTran engaged in collusive behavior in violation of Section 1 of the Sherman Act in
November 2008 based upon certain public statements made in October 2008 by AirTran's CEO at an analyst conference concerning fees for the first checked
bag, Delta's imposition of a fee for the first checked bag on November 4, 2008 and AirTran's imposition of a similar fee on November 12, 2008. The plaintiffs
sought to assert claims on behalf of an alleged class consisting of passengers who paid the fist bag fee after December 5, 2008 and seek injunctive relief and
unspecified treble damages. All of these cases have been consolidated for pre-trial proceedings in the Northern District of Georgia by the Multi-District
Litigation ("MDL") Panel.
In February 2010, the plaintiffs in the MDL proceeding filed a Consolidated Amended Class Action Complaint which substantially expanded the scope of
the original complaint. In the consolidated amended complaint, the plaintiffs add new allegations concerning alleged signaling by both Delta and AirTran
based upon statements made to the investment community by both carriers relating to industry capacity levels during 2008-2009. The plaintiffs also add a new
cause of action against Delta alleging attempted monopolization in violation of Sherman Act § 2, paralleling a claim previously asserted against AirTran but
not Delta.
We believe the claims in these cases are without merit and are vigorously defending these lawsuits.
Chapter 11 Proceedings
On September 14, 2005, Delta and substantially all of its subsidiaries (the "Delta Debtors") filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the Bankruptcy Court. On April 25, 2007, the Bankruptcy Court entered an order approving and confirming the Plan of
Reorganization and the Plan of Reorganization became effective, allowing the Delta Debtors to emerge from bankruptcy on April 30, 2007. The
reorganization cases were jointly administered under the caption "In re Delta Air Lines, Inc., et al., Case No. 05-17923-ASH." As of the date of the
Chapter 11 filing, then pending litigation was generally stayed, and absent further order of the Bankruptcy Court, most parties may not take any action to
recover on pre-petition claims against the Delta Debtors. 22