Delta Airlines 2012 Annual Report Download - page 36

New York Strategy
Strengthening our position in New York City continues to be an important part of our network strategy. As discussed below, key components of
this strategy are operating a domestic hub at LaGuardia and creating a state-of-the-
art facility at JFK. In May 2012, we announced new and expanded
service to 10 popular leisure destinations (in addition to the service expansion discussed below) in the Caribbean, Bermuda and Florida from
LaGuardia and JFK. These flights began operating in the December quarter of 2012.
LaGuardia. During December 2011, we closed transactions with US Airways where we received takeoff and landing rights (each a "slot pair") at
LaGuardia in exchange for slot pairs at Reagan National. This exchange allows us to operate a new domestic hub at LaGuardia. We have increased
capacity at LaGuardia by 42% since March 2012, adding 100 new flights and a total of 26 new destinations. The first phase of new flights began on
March 25 and the second phase commenced on July 11. We currently operate about 260 daily flights between LaGuardia and 60 cities, more than any
other airline.
We are also investing more than $160 million in a renovation and expansion project at LaGuardia to enhance the customer experience. In
December 2012, we opened the connector linking Terminals C and D and in September 2012 we opened a new SkyClub in Terminal C. Ongoing
investments include expanded security lanes and a baggage handling system in both terminals as well as an expanded SkyClub in Terminal D.
JFK. While our expanded LaGuardia schedule is focused on providing industry-leading domestic service, we are optimizing our international and
trans-continental flight schedule at JFK to facilitate convenient connections for our passengers and improve coordination with our SkyTeam alliance
partners.
At JFK, we currently operate domestic flights primarily at Terminal 2 and international flights at Terminal 3 and, to a lesser extent, Terminal 4.
Our five-year $1.2 billion renovation project at JFK, which began in 2010, is on schedule. The expansion and enhancement of Terminal 4, which
includes the construction of nine new international gates, is expected to be open in the spring of 2013. Upon completion of the Terminal 4 expansion,
we will relocate our operations from Terminal 3 to Terminal 4, proceed with the demolition of Terminal 3 and thereafter conduct coordinated flight
operations from Terminals 2 and 4. Once our project is complete, we expect that passengers will benefit from an enhanced customer experience and
improved operational performance, including reduced taxi times and better on-time performance.
Alliances and Equity Investments
We have made long-term investments in other airlines that give us the ability to increase our network scale and produce revenue improvements.
We invested in GOL and Aeromexico because they operate in Latin America's two largest markets, Brazil and Mexico, respectively. Pending
regulatory approval, we also agreed to buy 49% of Virgin Atlantic, currently held by Singapore Airlines, for $360 million. We also entered into a
joint venture agreement with Virgin Atlantic with respect to operations on non
-stop routes between the United Kingdom and North America. We and
Virgin Atlantic will file an application with the U.S. Department of Transportation for U.S. antitrust immunity with respect to the joint venture.
Pilot Agreement
During the June 2012 quarter, we reached an agreement with the Air Line Pilots Association, International (“ALPA”) to modify the existing
collective bargaining agreement covering Delta’s pilots. The agreement, which was ratified by the pilots in June 2012, provides career growth
opportunities as well as pay and benefits improvements for our pilots including increases to base pay and changes to our profit sharing program. The
agreement, which becomes amendable on December 31, 2015, will also provide Delta with productivity gains and support our domestic fleet
restructuring.
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