Delta Airlines 2011 Annual Report Download - page 10

With the exception of American Eagle and a portion of the flights operated for us by 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, mail and in-flight and ancillary 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.
Our arrangement with American Eagle, limited to certain flights operated to and from the Los Angeles International Airport, as well as a portion of the
flights operated for us by SkyWest Airlines, are structured as revenue proration agreements. These proration agreements establish a fixed dollar or percentage
division of revenues for tickets sold to passengers traveling on connecting flight itineraries.
Frequent Flyer Program
Our SkyMiles ® frequent flyer program is designed to retain and increase traveler loyalty by offering incentives to travel on Delta. The SkyMiles program
allows program members to earn mileage for travel awards by flying on Delta, Delta's regional carriers and other participating airlines. Mileage credit may
also be earned by using certain services offered by program participants, such as credit card companies, hotels and car rental agencies. In addition, individuals
and companies may purchase mileage credits. Miles will not expire, but are subject to all program rules. We reserve the right to terminate the program with
six months advance notice, and to change the program's terms and conditions at any time without notice.
SkyMiles program mileage credits can be redeemed for air travel on Delta and participating airlines, for membership in our Delta Sky Clubs® and for
other program participant awards. Mileage credits are subject to certain transfer restrictions and travel awards are subject to capacity-controlled seating. In
2011, program members redeemed more than 275 billion miles in the SkyMiles program for 12 million award redemptions. During this period, 8.2% of
revenue miles flown on Delta were from award travel.
Other Businesses
Cargo
Through the strength of our global network, our cargo operations are able to connect all of the world's major freight gateways. We generate cargo
revenues in domestic and international markets primarily through the use of cargo space on regularly scheduled passenger aircraft. We are a member of
SkyTeam Cargo, a global airline cargo alliance, whose other members are Aeromexico Cargo, Air France Cargo, Alitalia Cargo, CSA Czech Airlines Cargo,
KLM Cargo and Korean Air Cargo. SkyTeam Cargo offers a global network spanning six continents, provides customers a consistent international product
line and permits its members to improve their efficiency and effectiveness in the marketplace.
Delta TechOps, Delta Global Services, MLT Vacations and Delta Private Jets
We have several other businesses arising from our airline operations, including aircraft maintenance, repair and overhaul (“MRO”), staffing services for
third parties, vacation wholesale operations and our private jet operations. Our MRO operation, known as Delta TechOps, is the largest airline MRO in North
America. In addition to providing maintenance and engineering support for our fleet of approximately 775 aircraft, Delta TechOps serves more than 150
aviation and airline customers from around the world. Delta TechOps employs approximately 9,600 maintenance professionals and is one of the most
experienced MRO providers in the world. Our staffing services business, Delta Global Services, provides staffing services, professional security, training
services and aviation solutions to approximately 150 customers. Our vacation wholesale business, MLT Vacations, is one of the largest providers of vacation
packages in the United States. Our private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members
to purchase flight time by the hour. In 2011, the total revenue from these businesses was approximately $900 million.
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