Delta Airlines 2012 Annual Report Download - page 13

Fares and Rates
Airlines set ticket prices in all domestic and most international city pairs with minimal governmental regulation, and the industry is characterized
by significant price competition. Certain international fares and rates are subject to the jurisdiction of the DOT and the governments of the foreign
countries involved. Many of our tickets are sold by travel agents, and fares are subject to commissions, overrides and discounts paid to travel agents,
brokers and wholesalers.
Route Authority
Our flight operations are authorized by certificates of public convenience and necessity and also by exemptions and limited-entry frequency
awards issued by the DOT. The requisite approvals of other governments for international operations are controlled by bilateral agreements (and a
multilateral agreement in the case of the U.S. and the European Union) with, or permits or approvals issued by, foreign countries. Because
international air transportation is governed by bilateral or other agreements between the U.S. and the foreign country or countries involved, changes
in U.S. or foreign government aviation policies could result in the alteration or termination of such agreements, diminish the value of our
international route authorities or otherwise affect our international operations. Bilateral agreements between the U.S. and various foreign countries
served by us are subject to renegotiation from time to time. The U.S. government has negotiated “open skies”
agreements with many countries, which
allow unrestricted access between the U.S. and the foreign markets. These agreements include separate agreements with the European Union and
Japan.
Certain of our international route authorities are subject to periodic renewal requirements. We request extension of these authorities when and as
appropriate. While the DOT usually renews temporary authorities on routes where the authorized carrier is providing a reasonable level of service,
there is no assurance this practice will continue in general or with respect to a specific renewal. Dormant route authorities may not be renewed in
some cases, especially where another U.S. carrier indicates a willingness to provide service.
Airport Access
Operations at four major domestic airports and certain foreign airports served by us are regulated by governmental entities through allocations of
“slots” or similar regulatory mechanisms which limit the rights of carriers to conduct operations at those airports. Each slot represents the
authorization to land at or take off from the particular airport during a specified time period.
In the U.S., the FAA currently regulates the allocation of slots, slot exemptions, operating authorizations, or similar capacity allocation
mechanisms at Reagan National in Washington, D.C. and LaGuardia, John F. Kennedy International Airport (“JFK”) and Newark in the New York
City area. Our operations at these airports generally require the allocation of slots or analogous regulatory authorizations. Similarly, our operations at
Tokyo's Narita and Haneda Airports, London's Gatwick and Heathrow airports and other international airports are regulated by local slot coordinators
pursuant to the International Air Transport Association's Worldwide Scheduling Guidelines and applicable local law. We currently have sufficient
slots or analogous authorizations to operate our existing flights, and we have generally been able to obtain the rights to expand our operations and to
change our schedules. There is no assurance, however, that we will be able to do so in the future because, among other reasons, such allocations are
subject to changes in governmental policies.
Environmental Matters
Emissions . The U.S. Environmental Protection Agency (the “EPA”) is authorized to regulate aircraft emissions and has historically implemented
emissions control standards previously adopted by the International Civil Aviation Organization (“ICAO”). Our aircraft comply with existing EPA
standards as applicable by engine design date. The ICAO has adopted two additional aircraft engine emissions standards, the first of which is
applicable to engines certified after December 31, 2007, and the second of which is applicable to engines certified after December 31, 2013. In June
2012, the EPA published a final rulemaking for new emission standards for oxides of nitrogen (NOx), adopting ICAO's additional standards.
Included in the rule are two new tiers of more stringent emission standards for NOx. These standards, referred to as the Tier 6 standards, become
effective for newly-manufactured aircraft engines beginning in 2013.
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