Delta Airlines 2010 Annual Report Download - page 10

Table of Contents
Our international routes are subject to competition from both domestic and foreign carriers. Through alliance and other marketing and codesharing
agreements with foreign carriers, U.S. carriers have increased their ability to sell international transportation, such as services to and beyond traditional
European and Asian gateway cities. Similarly, foreign carriers have obtained increased access to interior U.S. passenger traffic beyond traditional U.S.
gateway cities through these relationships. In particular, alliances formed by domestic and foreign carriers, including the Star Alliance (among United Air
Lines, Continental Airlines, Lufthansa German Airlines, Air Canada and others) and the oneworld alliance (among American Airlines, British Airways,
Qantas and others) have significantly increased competition in international markets. The adoption of liberalized Open Skies Aviation Agreements with an
increasing number of countries around the world, including in particular the Open Skies Treaties with the Member States of the European Union and Japan,
could significantly increase competition among carriers serving those markets.
Several joint ventures among U.S. and foreign carriers, including our transatlantic joint venture with Air France-KLM and Alitalia, have received grants of
antitrust immunity allowing the participating carriers to coordinate schedules, pricing, sales and inventory. Other joint ventures that have received anti-trust
immunity include a transatlantic alliance among United, Continental, Air Canada and Lufthansa, a transpacific joint venture among United, Continental and
All Nippon Airways, a transatlantic joint venture among American, British Airways and Iberia, and a transpacific joint venture between American and Japan
Air Lines.
Consolidation in the airline industry and changes in international alliances have altered and will continue to alter the competitive landscape in the industry
by resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and altered cost structures.
Regulatory Matters
The DOT and the Federal Aviation Administration (the "FAA") exercise regulatory authority over air transportation in the U.S. The DOT has authority to
issue certificates of public convenience and necessity required for airlines to provide domestic air transportation. An air carrier that the DOT finds fit to
operate is given authority to operate domestic and international air transportation (including the carriage of passengers and cargo). Except for constraints
imposed by regulations regarding "Essential Air Services," which are applicable to certain small communities, airlines may terminate service to a city without
restriction.
The DOT has jurisdiction over certain economic and consumer protection matters, such as unfair or deceptive practices and methods of competition,
advertising, denied boarding compensation, baggage liability and disabled passenger transportation. The DOT also has authority to review certain joint
venture agreements between major carriers and engages in regulation of economic matters such as slot transactions. The FAA has primary responsibility for
matters relating to the safety of air carrier flight operations, including airline operating certificates, control of navigable air space, flight personnel, aircraft
certification and maintenance and other matters affecting air safety.
Authority to operate international routes and international codesharing arrangements is regulated by the DOT and by the governments of the foreign
countries involved. International certificate authorities are also subject to the approval of the U.S. President for conformance with national defense and foreign
policy objectives.
The Transportation Security Administration and the U.S. Customs and Border Protection, each a division of the Department of Homeland Security, are
responsible for certain civil aviation security matters, including passenger and baggage screening at U.S. airports and international passenger prescreening
prior to entry into or departure from the U.S.
Airlines are also subject to various other federal, state, local and foreign laws and regulations. For example, the U.S. Department of Justice has jurisdiction
over airline competition matters. The U.S. Postal Service has authority over certain aspects of the transportation of mail. Labor relations in the airline
industry, as discussed below, are generally governed by the Railway Labor Act. Environmental matters are regulated by various federal, state, local and
foreign governmental entities. Privacy of passenger and employee data is regulated by domestic and foreign laws and regulations.
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