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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 1998
DELTA AIR LINES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-5424 58-0218548
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320
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(Address of principal executive offices)
Registrant's telephone number, including area code: (404) 715-2600
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
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On April 30, 1998, Delta Air Lines, Inc. ("Delta" or the "Company")
issued a press release ("Press Release") announcing that Delta is entering into
a marketing alliance (the "Alliance") with United Air Lines, Inc. A copy of the
Press Release is attached hereto as Exhibit 99.1.
Exhibit 99.2 is a cautionary statement applicable to forward-looking
statements, within the meaning of the Private Securities Litigation Reform Act
of 1995, which Delta may make about the Company and its business, including the
Alliance.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit No. Description
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99.1 Press Release
99.2 Cautionary Statement
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELTA AIR LINES, INC.
BY: /s/ Warren C. Jenson
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Warren C. Jenson
Executive Vice President &
Chief Executive Officer
Date: April 30, 1998
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Exhibit 99.1
[DELTA AIR LINES, INC. LETTERHEAD]
CONTACT: Corporate Communications
404/715-2533
DELTA AIR LINES ANNOUNCES
STRATEGIC, GLOBAL CODE-SHARE ALLIANCE
WITH UNITED AIRLINES
ATLANTA, GA, APRIL 30, 1998 -- Delta Air Lines today announced that it
is entering into a strategic, global code-share alliance with United Airlines
designed to:
. Increase customer access to global destinations and improve the ease
of travel by linking the airlines' route systems;
. Increase price competition by offering customers additional price and
travel options and encouraging growth in services by Delta and
United;
. Build Delta's shareowner value by accelerating growth and
strengthening Delta's competitive position in the industry; and
. Provide growth opportunities for Delta employees without workforce
reductions.
Under the terms of the agreement, the two airlines plan to engage in
code-sharing arrangements, reciprocal frequent flyer programs and other areas of
marketing cooperation. This will allow both carriers to offer customers
increased service to hundreds of new cities and more price and frequency
options. The two companies, however, will remain independent companies and
competitors. There are no plans to merge.
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This is a global alliance. Initially, it will be implemented on the
carriers' routes in the United States. The alliance will be expanded
internationally with the concurrence of the carriers' alliance partners and
approval by governments, where applicable. Code-sharing to Europe is not part of
this alliance at this time because of complex governmental and alliance issues.
Leo F. Mullin, president and chief executive officer of Delta, said: "In
today's global economy, business travelers and the general traveling public are
demanding easy and complete access to destinations at competitive prices.
Airlines are working to meet this need, often through alliances. This alliance
puts Delta in a strong strategic position to meet these customer demands by
linking Delta's and United's highly complementary route networks while we
remain strong, independent competitors.
"Delta will continue its strategy of disciplined internal growth,
strengthened now by the new breadth of service offerings made possible by this
global alliance."
Delta said employees will benefit from the alliance through increased
job opportunities and growth, as well as the increased job security that comes
with being employed by an industry leader. No workforce reductions will take
place and no current Delta service will be eliminated as a result of this
alliance.
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Delta said the two carriers estimate they would realize a total of
approximately $600 million in annual gross revenue benefits when the alliance is
fully implemented. For comparison purposes, the estimated gross annual revenue
benefits exclude any impact of other major U.S. domestic alliances that may be
formed. Assuming other major U.S. domestic alliances go into effect, the
carriers still expect this alliance to have a positive revenue benefit.
Delta and United anticipate they will begin reciprocal frequent flyer
programs later this year and will begin code-sharing on their U.S. networks in
early 1999.
As a code-share alliance, this agreement does not require formal
approval by the U.S. government, although Delta and United expect governmental
requests for information regarding the alliance. Delta and United will meet
with governmental officials on many levels to discuss the alliance.
Delta believes the combination of increased access, added travel
options, improved ease of travel and continuing strong competition inherent in
this alliance meet the standards for serving the public interest. The U.S.
government has supported and encouraged this type of alliance in the past as
being pro-competitive. The U.S. government's initiative to open skies around
the world has created opportunities for carriers to bring to consumers new
competitive choices that did not exist previously. The goal of the Delta-United
alliance is to capitalize on these new opportunities where available.
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Pilots at both Delta and United are represented by the Air Line Pilots
Association (ALPA), and provisions in the contracts between Delta and its pilots
and United and that carrier's pilots require pilot approval of the code-share
aspects of this alliance. ALPA leaders have been provided detailed information
about this alliance and are currently reviewing it.
Once the code-share alliance is implemented, customers can choose to buy
either a Delta or United ticket on all U.S. flights of both airlines. This
allows customers access to the routes, scheduling, fares, frequency, network
strengths, airport lounges and frequent flyer programs of both carriers. The
carriers also will cooperate to provide enhanced service to cargo customers.
As a result, there will be additional service options on 4,602 daily
flights on 543 U.S. city pairs, plus streamlined ticketing, check-in and baggage
handling. Delta will serve 17 new U.S. cities and have 2,074 new daily nonstop
flights to 195 city pairs. United will serve 39 new cities and have 2,528 new
daily nonstop flights in 319 city pairs. Air service options and benefits will
increase as the alliance becomes more global.
For example, a Delta customer in Savannah will be able to fly Savannah-
Atlanta-Sioux Falls-Rapid City-Green Bay on a single ticket and earn frequent
flyer miles on either carrier whether flying Delta or United aircraft.
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"Delta offers customers a strong route network in the East, Southeast and
Southwest, while United offers a strong network in the West and Midwest," Mullin
said. "A code-share alliance opens easier access to the entire U.S. to
customers of both companies. As this alliance expands outside the U.S., we will
offer more and easier access to the world."
Delta and United will not jointly set prices for tickets, but schedules
will be coordinated where appropriate to increase customer convenience on
connecting flights. The two airlines will continue to compete vigorously for
traffic on routes served by both carriers. As a result, the alliance also will
enhance competition, as new competitive service options will be added at each of
13 U.S. Delta and United hubs/gateways.
"This alliance serves the public interest because it strengthens
competition in the U.S. aviation industry while providing additional travel
options and benefits for the traveling public," Mullin said. "As we meet the
needs of our customers, our employees and shareowners will benefit through new
opportunities to grow revenues and profits."
The alliance has a seven-year term but may be terminated by either party
earlier under certain circumstances.
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NOTE: This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include Delta's estimates with respect to the revenue benefits that
will result from the marketing alliance between Delta and United. These forward-
looking statements involve significant risks and uncertainties that could cause
the actual results to differ materially from the expected results. Factors that
may cause such differences include, but are not limited to, the possibility that
the estimated revenue benefits will not be realized, or will not be realized
within the expected time period, due to, among other things, (1) the airline
pricing environment; (2) competitive actions taken by other airlines; (3)
general economic conditions; (4) changes in jet fuel prices; (5) actions taken
by the United States and foreign governments; (6) the willingness of customers
to travel; and (7) the outcome of discussions with both carriers' pilot unions,
international partners and commuter carriers regarding implementation of various
aspects of the alliance.
For more information, please visit the website http://www.digitalrelease.com and
enter either "Delta" or "United" as the keyword in the search engine.
# # #
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Exhibit 99.2
CAUTIONARY STATEMENT
Delta Air Lines, Inc. (the "Company") and its representatives may make forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 from time to time, either orally or in writing, about the
Company and its business, including the revenue benefits, earning accretion and
other benefits the Company expects would result from its marketing alliance with
United Air Lines, Inc. These forward-looking statements involve significant
risks and uncertainties that could cause the actual results to differ materially
from the expected results. It is not possible to list all of the many factors
that could cause the actual results to differ materially from the expected
results. Such factors may include, but are not limited to, (1) the airline
pricing environment; (2) competitive actions taken by other airlines; (3)
general economic conditions; (4) changes in jet fuel prices; (5) actions by the
United State and foreign governments; (6) the willingness of customers to
travel; and (7) the outcome of discussions with both carriers' pilot unions,
international partners and commuter carriers regarding implementation of the
alliance.
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