Delta Airlines 2010 Annual Report Download - page 18

Table of Contents
In addition, a substantial level of indebtedness, particularly because substantially all of our assets are currently subject to liens, could limit our ability to
obtain additional financing on acceptable terms or at all for working capital, capital expenditures and general corporate purposes. We have historically had
substantial liquidity needs in the operation of our business. These liquidity needs could vary significantly and may be affected by general economic
conditions, industry trends, performance and many other factors not within our control.
Agreements governing our debt, including credit agreements and indentures, include financial and other covenants that impose restrictions on our
financial and business operations.
Our credit facilities and indentures for secured notes have various financial and other covenants that require us to maintain, depending on the particular
agreement, minimum fixed charge coverage ratios, minimum unrestricted cash reserves and/or minimum collateral coverage ratios. The value of the collateral
that has been pledged in each facility may change over time, including due to factors that are not under our control, resulting in a situation where we may not
be able to maintain the collateral coverage ratio. In addition, the credit facilities and indentures contain other negative covenants customary for such
financings. If we fail to comply with these covenants and are unable to obtain a waiver or amendment, an event of default would result. These covenants are
subject to important exceptions and qualifications.
The credit facilities and indentures also contain other events of default customary for such financings. If an event of default were to occur, the lenders or
the trustee could, among other things, declare outstanding amounts due and payable, and our cash may become restricted. We cannot provide assurance that
we would have sufficient liquidity to repay or refinance the borrowings or notes under any of the credit facilities if such amounts were accelerated upon an
event of default. In addition, an event of default or declaration of acceleration under any of the credit facilities or the indentures could also result in an event
of default under other of our financing agreements.
Employee strikes and other labor-related disruptions may adversely affect our operations.
Our business is labor intensive, utilizing large numbers of pilots, flight attendants and other personnel. As of December 31, 2010, approximately 17% of
our workforce was unionized. Strikes or labor disputes with our unionized employees may adversely affect our ability to conduct business. Relations between
air carriers and labor unions in the United States are governed by the Railway Labor Act, which provides that a collective bargaining agreement between an
airline and a labor union does not expire, but instead becomes amendable as of a stated date. The Railway Labor Act generally prohibits strikes or other types
of self-help actions both before and after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required
by the Railway Labor Act have been exhausted.
In addition, if we or our affiliates are unable to reach agreement with any of our unionized work groups on future negotiations regarding the terms of their
collective bargaining agreements or if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages, subject
to the requirements of the Railway Labor Act. Likewise, if third party regional carriers with whom we have contract carrier agreements are unable to reach
agreement with their unionized work groups on current or future negotiations regarding the terms of their collective bargaining agreements, those carriers may
be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act, which could have a negative impact on our operations.
Completion of the integration of the Delta and Northwest Airlines workforces may present challenges.
The successful integration of the pre-merger NWA operations into Delta and achievement of the anticipated benefits of the combination depend on
integrating the pre-merger Delta and NWA employee groups and on maintaining productive employee relations. While integration of a number of the
workgroups (including pilots, aircraft maintenance technicians, dispatchers, meteorologists, simulator technicians and office and clerical staff) has been
completed, completion of the integration of certain workgroups (including flight attendants, airport employees and reservations employees) of the two pre-
merger airlines will require the final resolution of union representation issues. We cannot predict when or how these remaining representation issues will be
resolved. Unexpected delay, expense or other challenges to integrating the workforces could affect our financial performance.
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