Delta Airlines 2015 Annual Report Download - page 18

TableofContents
We are at risk of losses and adverse publicity stemming from a serious accident involving our aircraft.
Anaircraftcrashorotherseriousaccidentcouldexposeustosignificantliability.Althoughwebelievethatourinsurancecoverageisappropriate,wemaybe
forcedtobearsubstantiallossesfromanaccidentintheeventthatthecoveragewasnotsufficient.Inaddition,anyaccidentinvolvinganaircraftthatweoperateor
anaircraftthatisoperatedbyanairlinethatisoneofourregionalcarriersorcodesharepartnerscouldcreateanegativepublicperceptionaboutsafety,whichcould
harmourreputation,resultinginairtravelersbeingreluctanttoflyonouraircraftandthereforeharmourbusiness.
Agreements governing our debt, including credit agreements, include financial and other covenants. Failure to comply with these covenants could result in
events of default.
Ourcreditfacilitieshavevariousfinancialandothercovenantsthatrequireustomaintain,dependingontheparticularagreement,minimumfixedcharge
coverageratios,minimumliquidityand/orminimumcollateralcoverageratios.Thevalueofthecollateralthathasbeenpledgedineachfacilitymaychangeover
timeduetoappraisalsofcollateralrequiredbyourcreditagreementsandindentures.Thesechangescouldresultfromfactorsthatarenotunderourcontrol.A
declineinthevalueofcollateralcouldresultinasituationwhereitmaybedifficulttomaintainthecollateralcoverageratio.Inaddition,thecreditfacilitiescontain
othernegativecovenantscustomaryforsuchfinancings.Thesecovenantsaresubjecttoimportantexceptionsandqualifications.Ifwefailtocomplywiththese
covenantsandareunabletoremedyorobtainawaiveroramendment,aneventofdefaultwouldresult.
Thecreditfacilitiesalsocontainothereventsofdefaultcustomaryforsuchfinancings.Ifaneventofdefaultweretooccur,thelenderscould,amongother
things,declareoutstandingamountsdueandpayable.Inaddition,aneventofdefaultordeclarationofaccelerationunderanyofthecreditfacilitiescouldalso
resultinaneventofdefaultunderotherofourfinancingagreements.Theaccelerationofsignificantamountsofdebtcouldrequireustorenegotiate,repayor
refinancetheobligationsunderthecreditfacilitiesorotherfinancingarrangements.
Employee strikes and other labor-related disruptions may adversely affect our operations.
Ourbusinessislaborintensive,utilizinglargenumbersofpilots,flightattendants,aircraftmaintenancetechnicians,groundsupportpersonnelandother
personnel.AsofDecember31,2015,approximately18%ofourworkforce,primarilypilots,wasunionized.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.
Monroe'srelationswithunionsrepresentingitsemployeesaregovernedbytheNLRA,whichgenerallyallowsselfhelpafteracollectivebargainingagreement
expires.
Ifweoroursubsidiaries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ortheNLRA,asthecasemaybe.Strikesorlabordisputeswithourunionizedemployeesmayadverselyaffectourability
toconductbusiness.Likewise,ifthird-partyregionalcarrierswithwhomwehavecontractcarrieragreementsareunabletoreachagreementwiththeirunionized
workgroupsin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.
Extended interruptions or disruptions in service at one of our hub, gateway or key airports could have a material adverse impact on our operations.
OurbusinessisheavilydependentonouroperationsattheAtlantaairportandatourotherhub,gatewayorkeyairportsinAmsterdam,Boston,Detroit,London-
Heathrow,LosAngeles,Minneapolis-St.Paul,NewYork-LaGuardia,NewYork-JFK,Paris-CharlesdeGaulle,SaltLakeCity,SeattleandTokyo-Narita.Eachof
theseoperationsincludesflightsthatgatheranddistributetrafficfrommarketsinthegeographicregionsurroundingthehuborgatewaytoothermajorcitiesandto
otherDeltahubsandgateways.Asignificantextendedinterruptionordisruptioninserviceatoneofourhubsorgatewayscouldhaveamaterialimpactonour
business,financialconditionandresultsofoperations.
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