Delta Airlines 2009 Annual Report Download - page 9

Table of Contents
SkyTeam. In addition to our marketing alliance agreements with individual foreign airlines, we are a member of the SkyTeam global airline alliance. The
other full members of SkyTeam are Aeroflot, Aeromexico, Air France, Alitalia, China Southern, CSA Czech Airlines, KLM and Korean Air. One goal of
SkyTeam is to link the route networks of the member airlines, providing opportunities for increased connecting traffic while offering enhanced customer
service through mutual codesharing arrangements, reciprocal frequent flyer and lounge programs and coordinated cargo operations.
We have received antitrust immunity from the DOT that enables us and our immunized alliance partners (Air France KLM, Alitalia, CSA Czech Airlines
and Korean Air) to offer a more integrated route network and develop common sales, marketing and discount programs for customers. In July 2009, Delta and
Virgin Blue International Airlines (VAustralia), Virgin Blue Airlines, Pacific Blue Airlines (Australia) and Pacific Blue Airlines (New Zealand) filed an
application with the DOT for antitrust immunity.
Air France KLM joint venture. In addition to being members in SkyTeam with Air France and KLM, both of which are subsidiaries of the same holding
company, we have a transatlantic joint venture agreement with Air France and KLM. This agreement provides for the sharing of revenues and costs on
transatlantic routes, as well as coordinated pricing, scheduling, and product development on included routes. Pursuant to this joint venture, we and Air France
KLM operate an extensive transatlantic network, primarily on routes between North America and Europe, and secondarily on routes between North America
and Africa, the Middle East and India, and routes between Europe and Central America and several countries in northern South America.
Domestic Alliances
We have entered into a marketing alliance with Alaska and Horizon, which includes mutual codesharing and reciprocal frequent flyer and airport lounge
access arrangements. In 2009, we enhanced our alliance agreement with Alaska and Horizon to provide for more extensive cooperation with respect to our
west coast presence.
We also have frequent flyer and reciprocal lounge agreements with Hawaiian Airlines, and codesharing agreements with American Eagle Airlines
("American Eagle"), US Helicopter 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.
Regional Carriers
We 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 22% of our passenger revenue in 2009 related to flying by regional air carriers.
Through our regional carrier program, we have contractual arrangements with 10 regional carriers to operate regional jet and, in certain cases, turbo-prop
aircraft using our "DL" designator code. In addition to our wholly-owned subsidiaries, Comair, Compass and Mesaba, we have contractual arrangements with
Atlantic Southeast Airlines, Inc., a subsidiary of SkyWest, Inc. ("SkyWest"); SkyWest Airlines, Inc., a subsidiary of SkyWest; Chautauqua Airlines, Inc., a
subsidiary of Republic Airways Holdings, Inc. ("Republic Holdings"); Shuttle America Corporation, a subsidiary of Republic Holdings; Freedom Airlines,
Inc., a subsidiary of Mesa Air Group, Inc.; Pinnacle Airlines, Inc.; and American Eagle.
With the exception of American Eagle and a portion of SkyWest Airlines as described below, these agreements are capacity purchase arrangements, under
which we control the scheduling, pricing, reservations, ticketing and seat inventories for the regional carriers' flights operating under our "DL" designator
code, and we are entitled to all ticket, cargo and mail revenues associated with these flights. We pay those airlines an amount, as defined in the applicable
agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services.
These capacity purchase agreements are long-term agreements, usually with initial terms of at least 10 years, which grant us the option to extend the initial
term. Certain of these agreements provide us the right to terminate the entire agreement, or in some cases remove some of the aircraft from the scope of the
agreement, for convenience at certain future dates. 4