Delta Airlines 2009 Annual Report Download - page 92

Table of Contents
NOTE 8. PURCHASE COMMITMENTS AND CONTINGENCIES
Aircraft Commitments
Future purchase commitments for aircraft as of December 31, 2009 are estimated to total approximately $1.1 billion for the year ended December 31,
2010. Approximately $800 million of the $1.1 billion is associated with the purchase of 20 B-737-800 aircraft for which we have entered into definitive
agreements to sell to third parties immediately following delivery of those aircraft to us by the manufacturer. We have not received any notice that these
parties have defaulted on their purchase obligations. The remaining commitments relate to the purchase of two B-777-200LR aircraft, two B-737-800 aircraft
and 11 previously owned MD-90 aircraft. We have no aircraft purchase commitments after December 31, 2010.
As of December 31, 2009, we have financing commitments from third parties or, with respect to 20 of the 22 B-737-800 aircraft referred to above,
definitive agreements to sell all aircraft subject to purchase commitments, except for nine of the 11 previously owned MD-90 aircraft. Under these financing
commitments, third parties have agreed to finance on a long-term basis a substantial portion of the purchase price of the covered aircraft.
Our aircraft purchase commitments described above do not include our orders for:
• 18 B-787-8 aircraft. The Boeing Company ("Boeing") has informed us that Boeing will be unable to meet the contractual delivery schedule for these
aircraft. We are in discussions with Boeing regarding this situation.
• five A319-100 aircraft and two A320-200 aircraft. We have the right to cancel these orders.
Contract Carrier Agreements
During the year ended December 31, 2009, we had Contract Carrier agreements with 10 Contract Carriers, including our wholly-owned subsidiaries,
Comair, Compass and Mesaba.
Capacity Purchase Agreements. During the year ended December 31, 2009, six Contract Carriers operated for us (in addition to Comair, Compass and
Mesaba) pursuant to capacity purchase agreements. Under these agreements, the Contract Carriers operate some or all of their aircraft using our flight
designator codes, and we control the scheduling, pricing, reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with
those 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.
The following table shows our minimum fixed obligations under these capacity purchase agreements (excluding Comair, Compass and Mesaba). The
obligations set forth in the table contemplate minimum levels of flying by the Contract Carriers under the respective agreements and also reflect assumptions
regarding certain costs associated with the minimum levels of flying such as for fuel, labor, maintenance, insurance, catering, property tax and landing fees.
Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table below.
Year Ending December 31,
(in millions) Amount(1)
2010 $1,870
2011 1,780
2012 1,770
2013 1,820
2014 1,900
Thereafter 7,550
Total $ 16,690
(1) These amounts exclude contract carrier lease payments accounted for as operating leases, which are described in Note 7. The contingencies described
below under "Contingencies Related to Termination of Contract Carrier Agreements" are not included in this table.
87