8-K

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):   November 10, 2005

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-05424	58-0218548
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

P.O. Box 20706, Atlanta, Georgia 30320-6001

(Address of principal executive offices)

Registrant’s telephone number, including area code: (404) 715-2600

Registrant’s Web site address: www.delta.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

Delta Air Lines, Inc. (Delta) today issued a press release reporting financial results for the quarter ended September 30, 2005. The press release is furnished as Exhibit 99.1. The information furnished in this Form 8-K shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission.

Item 9.01 Financial Statements and Exhibits.

(c)  Exhibits.

Exhibit 99.1 Press Release dated November 10, 2005 titled “Delta Air Lines Reports Results for September 2005 Quarter”

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SIGNATURES

          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/ Edward H. Bastian
Date: November 10, 2005	Edward H. Bastian Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
Exhibit 99.1	Press Release dated November 10, 2005 titled “Delta Air Lines Reports Results for September 2005 Quarter”

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EX-99.1

Exhibit 99.1

CONTACT:  Corporate Communications 404-715-2554   Investor Relations 404-715-6679

Delta Air Lines Reports Results for September 2005 Quarter

ATLANTA, November 10, 2005 - Delta Air Lines (OTC: DALRQ) today reported results for the quarter ended September 30, 2005. Key points include:

·   Delta’s third quarter net loss was $1.1 billion

·   Excluding reorganization and special items, the third quarter net loss was $438 million ^1,2

·   Delta’s third quarter operating loss was $240 million, driven by a $442 million year-over-year increase due to fuel price

·   As of September 30, 2005, Delta had $2.6 billion in cash and cash equivalents and short-term investments, of which $1.4 billion was unrestricted

·   Mainline unit costs decreased 3.7 percent compared to the September 2004 quarter; excluding fuel expense and special items, mainline unit costs decreased 17.3 percent compared to the prior year quarter³

Delta reported a net loss for the September 2005 quarter of $1.1 billion, compared to a net loss of $646 million in the prior year quarter. Excluding the reorganization and special items described below, the September 2005 quarter net loss was $438 million, compared to a net loss of $592 million in the prior year quarter. The reorganization items result from Delta’s Chapter 11 filing on September 14, 2005.

Delta’s operating loss for the September 2005 quarter was $240 million, including a $442 million⁴ year-over-year increase due to higher fuel prices. Average fuel price per gallon for the September 2005 quarter was $1.82, a 51.7 percent increase over the prior year period.

“Our results for the third quarter show the challenges we continue to face,” said Gerald Grinstein, Delta’s chief executive officer. “We are committed to moving quickly and decisively to achieve our business plan that we announced in late September. We believe this plan will position Delta to become the lean, aggressive, profitable airline it must be to compete effectively over the long-term in the fast-changing airline industry environment.”

Business Plan

On Sept. 22, 2005, Delta announced information about its business plan, which is intended to provide $3 billion in annual financial benefits by the end of 2007. This amount is in addition to the $5 billion in annual benefits that Delta expects to achieve by the end of 2006, as compared to 2002. The incremental targeted benefits include revenue and network productivity benefits of $1.1 billion, in-court

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restructuring opportunities of $970 million, and more competitive labor costs requiring $605 million in non-pilot cost reductions and $325 million in pilot cost reductions. Delta is moving aggressively in all of these areas - as noted by schedule changes that will become effective in December, the continued streamlining of Delta’s fleet, and the recently implemented pay reductions for all non-pilot employees, including management.

“While we are pleased with the level of post-petition financing we were able to obtain, we must stop using borrowed money to fund our losses,” said Edward H. Bastian, Delta’s executive vice president and chief financial officer. “We have accomplished a great deal already this year, as evidenced by our 17.3% decline in mainline unit costs; however, unrelenting financial pressures, including high fuel prices and intense industry competition, require that we continue to move aggressively to achieve the additional targets we have defined in our business plan.”

Significant Transactions

The following recent significant transactions have occurred:

·   On Sept. 7, 2005, Delta completed the sale of ASA to SkyWest for a purchase price of $425 million plus $50 million in aircraft deposits.

·   On Sept. 27, 2005, Delta entered into an amendment to its Visa/MasterCard credit card processing agreement to extend its term through October 27, 2007. The credit card processor has the right to maintain a reserve equal to its potential liability for Delta tickets purchased with Visa or MasterCard but not yet used for travel.

·   On Oct. 6, 2005, the U.S. Bankruptcy Court for the Southern District of New York granted final approval for the $2.2 billion in debtor-in-possession (DIP) financing that the company arranged to help support its business during its Chapter 11 reorganization.

·   On Nov. 1, 2005, Delta filed a motion with the Bankruptcy Court to reject the company’s collective bargaining agreement with the Air Line Pilots Association, International (ALPA), the labor union that represents Delta pilots. Delta took this action because the company and ALPA had not been able to reach a consensual agreement to achieve the $325 million annual reduction in pilot labor costs required under Delta’s business plan.

For additional information about these events, please see Delta’s Quarterly Report on Form 10-Q, which is expected to be filed with the Securities and Exchange Commission on November 14, 2005.

Liquidity and Financial Analysis

At September 30, 2005, Delta had $2.6 billion in cash and cash equivalents and short-term investments, of which $1.4 billion was unrestricted. Restricted cash increased $891 million since December 31, 2004 due primarily to cash holdbacks required by the company’s credit card processors. Capital expenditures for the quarter were approximately $102 million.

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Passenger revenues for the September 2005 quarter increased 9.2 percent, while passenger unit revenues increased 4.2 percent compared to the prior year quarter. The load factor for the September 2005 quarter was 79.2 percent, a 1.6 point increase compared to the prior year quarter. System capacity rose 4.8 percent and mainline capacity increased 4.7 percent.

Due to sharply higher fuel costs, operating expenses for the September 2005 quarter increased 3.8 percent from the prior year quarter. As a result of Delta’s cost controls, however, mainline operating expenses excluding fuel and special items declined 13.4 percent, in spite of a 4.7 percent increase in mainline capacity.

Detailed traffic, capacity, load factor, yield and passenger unit revenue information is provided in Note 2, attached below.

Explanation of Reorganization and Special Items

In the September 2005 quarter, Delta recorded reorganization and special items totaling a net $692 million charge. This net charge primarily reflects:

·   a $607 million charge for reorganization items. This net charge primarily relates to the rejection of 40 leased aircraft in Delta’s Chapter 11 proceedings and the write-off of debt issuance costs and discounts related to pre-petition debt obligations; and

·   an $86 million settlement charge related to lump sum distributions under the company’s defined benefit pension plan for pilots (Pilot Plan) to approximately 250 pilots who retired. As a result of these distributions, Delta must accelerate the recognition of actuarial losses in accordance with Statement of Financial Accounting Standards No. 88⁵.

In the September 2004 quarter, Delta recorded special items totaling a $54 million charge, consisting of (1) a $40 million asset impairment charge associated with Delta’s agreement to sell eight MD-11 aircraft; and (2) a $14 million settlement charge related to the Pilot Plan.

Other Matters

Attached to this press release are Delta’s Consolidated Statements of Operations for the three and nine months ended September 30, 2005, and 2004; a statistical summary for those periods; selected balance sheet data as of September 30, 2005 and December 31, 2004; and a reconciliation of certain GAAP to non-GAAP financial measures. The Consolidated Statements of Operations show Delta’s net loss as reported under GAAP, as well as Delta’s net loss excluding the reorganization and special items described above. Delta believes this information is helpful to investors to evaluate recurring operational performance because the reorganization and special items discussed above are not representative of recurring operations. For further information, please see Note 1 to the attached Consolidated Statements of Operations.

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About Delta

Delta Air Lines is the world’s second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 92 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta's marketing alliances allow customers to earn and redeem frequent flier miles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Customers can check in for flights, print boarding passes and check flight status at delta.com.

Endnotes

¹ Note 1 to the attached Consolidated Statements of Operations shows a reconciliation of Delta’s net loss reported under accounting principles generally accepted in the United States (GAAP) to the net loss excluding reorganization and special items, as well as reconciliations of other financial measures including and excluding reorganization and special items.

² Reorganization items are items of income, expense, gain or loss that are realized or incurred by us that are due to our reorganization under Chapter 11 of the U.S. Bankruptcy Code. In accordance with GAAP, these items are required to be separately classified in the Consolidated Statements of Operations.

³ Delta presents mainline unit costs excluding fuel expense and special items because management believes (a) the record high fuel prices during the September 2005 quarter mask the progress the Company achieved toward its business plan targets and (b) the exclusion of the special items is helpful to investors to evaluate the Company’s recurring operational performance.

⁴ Includes the impact of fuel price increases reflected in both fuel expense and contract carrier arrangements in the Consolidated Statements of Operations.

⁵ Statement of Financial Accounting Standards No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.”

Statements in this news releasethat are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actions and decisions of our creditors and other third parties with interests in our Chapter 11 proceedings; our ability to obtain court approval with respect to motions in the Chapter 11 proceedings prosecuted from time to time; our ability to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceedings and to consummate all of the transactions contemplated by one or more such plans of reorganization or upon which consummation of such plans may be conditioned; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for us to propose and confirm one or more plans of reorganization, to appoint a Chapter 11 trustee or to convert the cases to Chapter 7 cases; our ability to obtain and maintain normal terms with vendors and service providers; our ability to maintain contracts that are critical to our operations; our ability to maintain adequate liquidity to fund and execute our business plan during the Chapter 11 proceedings and in the context of a plan of reorganization and thereafter; our ability to comply with financial covenants in our financing agreements; our ability to implement our business plan successfully; the cost of aircraft fuel; labor issues; pension plan funding obligations; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; restructurings by competitors; the effects of terrorist attacks; and competitive conditions in the airline industry.  Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta’s Securities and Exchange Commission filings, including its Form 10-Q for the quarter ended September 30, 2005, to be filed with the Commission on or before November 14, 2005. The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of our liabilities and/or securities receiving no value for their interests. Because of such possibilities, the value of these liabilities and/or securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. Investors and other interested parties can obtain information about Delta’s Chapter 11 filing on the Internet at delta.com/restructure. Court filings and claims information are available at deltadocket.com. Caution should be taken not to place undue reliance on Delta’s forward-looking statements, which represent Delta’s views only as of November 10, 2005, and which Delta has no current intention to update.

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DELTA AIR LINES, INC.
Debtor and Debtor-In Possession
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended
	September 30						Percent
(In Millions, Except Share and Per Share Data)		2005			2004			Change
OPERATING REVENUES:
Passenger:
Mainline	$	3,041		$	2,814			8.1	%
Regional affiliates		850			750			13.3	%
Cargo		128			117			9.4	%
Other, net		197			190			3.7	%
Total operating revenues		4,216			3,871			8.9	%
OPERATING EXPENSES:
Salaries and related costs		1,235			1,616			-23.6	%
Aircraft fuel		1,203			786			53.1	%
Depreciation and amortization		317			311			1.9	%
Contracted services		275			249			10.4	%
Contract carrier arrangements		313			234			33.8	%
Landing fees and other rents		216			220			-1.8	%
Aircraft maintenance materials and outside repairs		215			197			9.1	%
Aircraft rent		141			181			-22.1	%
Passenger commissions and other selling expenses		152			185			-17.8	%
Passenger service		90			97			-7.2	%
Pension settlements, asset write-downs, restructuring and related items, net		85			54			57.4	%
Other		214			164			30.5	%
Total operating expenses		4,456			4,294			3.8	%
OPERATING LOSS		(240	)		(423	)		43.3	%
OTHER INCOME (EXPENSE):
Interest expense (contractual interest expense equals $298 for three months ended September 30, 2005)		(277	)		(210	)		-31.9	%
Interest income		17			6			183.3	%
Miscellaneous expense, net		-			(25	)		100.0	%
Total other expense, net		(260	)		(229	)		-13.5	%
LOSS BEFORE REORGANIZATION ITEMS, NET		(500	)		(652	)		23.3	%
REORGANIZATION ITEMS, NET		(607	)		-			NM
LOSS BEFORE INCOME TAXES		(1,107	)		(652	)		-69.8	%
INCOME TAX (PROVISION) BENEFIT		(23	)		6			483.3	%
NET LOSS		(1,130	)		(646	)		-74.9	%
PREFERRED STOCK DIVIDENDS		(4	)		(5	)		20.0	%
NET LOSS ATTRIBUTABLE TO COMMON SHAREOWNERS		($1,134	)		($651	)		-74.2	%
NET LOSS EXCLUDING SPECIAL ITEMS		($438	)		($592	)		26.0	%
OPERATING MARGIN		-5.7	%		-10.9	%		5.2	pts

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DELTA AIR LINES, INC.

Debtor and Debtor-In Possession

Consolidated Statements of Operations

(Unaudited)

	Nine Months Ended
	September 30						Percent
(In Millions, Except Share and Per Share Data)	2005			2004			Change
OPERATING REVENUES:
Passenger:
Mainline	$	8,735		$	8,269			5.6	%
Regional affiliates		2,370			2,192			8.1	%
Cargo		387			364			6.3	%
Other, net		556			536			3.7	%
Total operating revenues		12,048			11,361			6.0	%
OPERATING EXPENSES:
Salaries and related costs		3,944			4,809			-18.0	%
Aircraft fuel		3,141			2,029			54.8	%
Depreciation and amortization		956			929			2.9	%
Contracted services		817			739			10.6	%
Contract carrier arrangements		728			708			2.8	%
Landing fees and other rents		658			657			0.2	%
Aircraft maintenance materials and outside repairs		598			518			15.4	%
Aircraft rent		435			544			-20.0	%
Passenger commissions and other selling expenses		530			561			-5.5	%
Passenger service		269			260			3.5	%
Pension settlements, asset write-downs, restructuring and related items, net		712			171			316.4	%
Other		586			488			20.1	%
Total operating expenses		13,374			12,413			7.7	%
OPERATING LOSS		(1,326	)		(1,052	)		-26.0	%
OTHER INCOME (EXPENSE):
Interest expense (contractual interest expense equals $854 for nine months ended September 30, 2005)		(833	)		(601	)		-38.6	%
Interest income		45			27			66.7	%
Miscellaneous expense, net		(1	)		(53	)		98.1	%
Total other expense, net		(789	)		(627	)		-25.8	%
LOSS BEFORE REORGANIZATION ITEMS, NET		(2,115	)		(1,679	)		-26.0	%
REORGANIZATION ITEMS, NET		(607	)		-			NM
LOSS BEFORE INCOME TAXES		(2,722	)		(1,679	)		-62.1	%
INCOME TAX BENEFIT (PROVISION)		139			(1,313	)		-110.6	%
NET LOSS		(2,583	)		(2,992	)		13.7	%
PREFERRED STOCK DIVIDENDS		(15	)		(14	)		-7.1	%
NET LOSS AVAILABLE TO COMMON SHAREOWNERS		($2,598	)		($3,006	)		13.6	%
NET LOSS EXCLUDING SPECIAL ITEMS		($1,425	)		($1,502	)		5.1	%
OPERATING MARGIN		-11.0	%		-9.3	%		-1.7	pts

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DELTA AIR LINES, INC.
Debtor and Debtor-In Possession
Statistical Summary
(Unaudited)
	Three Months Ended
	September 30						Percent
	2005			2004			Change
Consolidated:
Revenue Passenger Miles (millions) (a)		32,513			30,418			6.9	%
Available Seat Miles (millions) (a)		41,045			39,167			4.8	%
Passenger Mile Yield (a)		11.97	¢		11.72	¢		2.1	%
Operating Revenue Per Available Seat Mile (a)		10.27	¢		9.88	¢		3.9	%
Passenger Revenue Per Available Seat Mile (a)		9.48	¢		9.10	¢		4.2	%
Operating Cost Per Available Seat Mile (a)		10.86	¢		10.96	¢		-0.9	%
Operating Cost Per Available Seat Mile - excluding special items - see Note 1 (a)		10.65	¢		10.83	¢		-1.7	%
Operating Cost Per Available Seat Mile - excluding fuel expense and special items - see Note 1 (a)		7.72	¢		8.82	¢		-12.5	%
Passenger Load Factor (a)		79.21	%		77.66	%		1.6		pts
Breakeven Passenger Load Factor (a)		84.10	%		86.88	%		(2.8	)	pts
Breakeven Passenger Load Factor - excluding special items- see Note 1 (a)		82.36	%		85.70	%		(3.3	)	pts
Passengers Enplaned (thousands) (a)		30,870			28,247			6.6	%
Fuel Gallons Consumed (millions)		660			654			0.9	%
Average Price Per Fuel Gallon, net of hedging gains		$1.82			$1.20			51.7	%
Number of Aircraft in Fleet, End of Period		682			842			-19.0	%
Full-Time Equivalent Employees, End of Period		58,000			69,700			-16.8	%
Mainline:
Revenue Passenger Miles (millions)		28,292			26,438			7.0	%
Available Seat Miles (millions)		35,148			33,576			4.7	%
Operating Cost Per Available Seat Mile		9.99	¢		10.37	¢		-3.7	%
Operating Cost Per Available Seat Mile - excluding special items - see Note 1		9.75	¢		10.21	¢		-4.5	%
Operating Costs Per Available Seat Mile - excluding fuel expense and special items - see Note 1		6.85	¢		8.28	¢		-17.3	%
Number of Aircraft in Fleet, End of Period		508			542			-6.3	%
(a)Includes the operations under our contract carrier agreements of Flyi, Inc. (formerly Atlantic Coast Airlines) (for the three and nine months ended September 30, 2004), Chautauqua Airlines, Inc. and SkyWest, Inc. (for all periods presented), Atlantic Southeast Airlines, Inc. (from September 8, 2005 to September 30, 2005) and Shuttle America (from September 1, 2005 through September 30, 2005).

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DELTA AIR LINES, INC.
Debtor and Debtor-In Possession
Statistical Summary
(Unaudited)
	Nine Months Ended
	September 30						Percent
Statistical Summary:	2005			2004			Change
Consolidated:
Revenue Passenger Miles (millions) (a)		92,353			85,201			8.4	%
Available Seat Miles (millions) (a)		119,397			113,536			5.2	%
Passenger Mile Yield (a)		12.03	¢		12.28	¢		-2.0	%
Operating Revenue Per Available Seat Mile (a)		10.09	¢		10.01	¢		0.8	%
Passenger Revenue Per Available Seat Mile (a)		9.30	¢		9.21	¢		1.0	%
Operating Cost Per Available Seat Mile (a)		11.20	¢		10.93	¢		2.5	%
Operating Cost Per Available Seat Mile - excluding special items - see Note 1 (a)		10.61	¢		10.78	¢		-1.6	%
Operating Cost Per Available Seat Mile - excluding fuel expense and special items - see Note 1 (a)		7.97	¢		9.00	¢		-11.4	%
Passenger Load Factor (a)		77.35	%		75.04	%		2.3		pts
Breakeven Passenger Load Factor (a)		86.59	%		82.59	%		4.0		pts
Breakeven Passenger Load Factor - excluding special items- see Note 1 (a)		81.63	%		81.36	%		0.3		pts
Passengers Enplaned (thousands) (a)		91,682			82,206			10.6	%
Fuel Gallons Consumed (millions)		1,941			1,896			2.4	%
Average Price Per Fuel Gallon, net of hedging gains		$1.62			$1.07			51.2	%
Number of Aircraft in Fleet, End of Period		682			842			-19.0	%
Full-Time Equivalent Employees, End of Period		58,000			69,700			-16.8	%
Mainline:
Revenue Passenger Miles (millions)		80,274			73,966			8.5	%
Available Seat Miles (millions)		102,307			97,260			5.2	%
Operating Cost Per Available Seat Mile		10.48	¢		10.36	¢		1.2	%
Operating Cost Per Available Seat Mile - excluding special items- see Note 1		9.79	¢		10.18	¢		-3.8	%
Operating Cost Per Available Seat Mile - excluding fuel expense and special items - see Note 1		7.21	¢		8.46	¢		-14.8	%
Number of Aircraft in Fleet, End of Period		508			542			-6.3	%
(a)Includes the operations under our contract carrier agreements of Flyi, Inc. (formerly Atlantic Coast Airlines) (for the three and nine months ended September 30, 2004), Chautauqua Airlines, Inc. and SkyWest, Inc. (for all periods presented), Atlantic Southeast Airlines, Inc. (from September 8, 2005 to September 30, 2005) and Shuttle America (from September 1, 2005 through September 30, 2005).

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DELTA AIR LINES, INC.
Debtor and Debtor-In Possession
Selected Balance Sheet Data
(In Millions)
	September 30,			December 31,
	2005			2004
	(Unaudited)
Cash and cash equivalents 1	$	1,361		$	1,463
Short-term investments		-			336
Restricted cash, including noncurrent		1,241			350
Total assets		20,215			21,801
Total debt and capital leases, including current maturities		7,592			13,898
Total liabilities subject to compromise		16,385			-
Total shareowners' deficit		(8,463	)		(5,796	)

¹ Cash and cash equivalents as of September 30, 2005 includes $128 million to be used for payment of certain operational taxes and fees to various governmental authorities. 

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Note 1: The following tables show reconciliations of certain financial measures adjusted for the items shown below.
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2005			2004			2005			2004
Net loss		($1,130	)		($646	)		($2,583	)		($2,992	)
Items excluded:
Pension and related charges		85			14			702			131
Aircraft charges		-			40			10			40
Reorganization items, net		607			-			607			-
Deferred Tax reserve		-			-			(161	)		1,319
Total items excluded		692			54			1,158			1,490
Net loss excluding special items		($438	)		($592	)		($1,425	)		($1,502	)
(in millions)
Operating expenses		$4,456			$4,294			$13,375			$12,413
Items excluded:
Pension and related charges		(85	)		(14	)		(702	)		(131	)
Aircraft charges		-			(40	)		(10	)		(40	)
Total items excluded		(85	)		(54	)		(712	)		(171	)
Operating expenses excluding special items		$4,371			$4,240			$12,663			$12,242
(in millions)
Mainline operating expenses		$3,512			$3,481			$10,727			$10,072
Items excluded:
Pension and related charges		(85	)		(14	)		(702	)		(131	)
Aircraft charges		-			(40	)		(10	)		(40	)
Total items excluded		(85	)		(54	)		(712	)		(171	)
Mainline operating expenses excluding special items		$3,427			$3,427			$10,015			$9,901
Fuel expense		($1,019	)		($648	)		($2,634	)		($1,673	)
Mainline operating expenses excluding fuel expense and special items		$2,408			$2,779			$7,381			$8,228
CASM		10.86	¢		10.96	¢		11.20	¢		10.93	¢
Items excluded:
Pension and related charges		(0.21	)		(0.03	)		(0.58	)		(0.12	)
Aircraft charges		-			(0.10	)		(0.01	)		(0.03	)
Total items excluded		(0.21	)		(0.13	)		(0.59	)		(0.15	)
CASM excluding special items		10.65	¢		10.83	¢		10.61	¢		10.78	¢
Fuel expense		(2.93	)		(2.01	)		(2.64	)		(1.79	)
CASM excluding fuel expense and special items		7.72	¢		8.83	¢		7.97	¢		9.00	¢

Page 11

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Mainline CASM		9.99	¢		10.37	¢		10.48	¢		10.36	¢
Items excluded:
Pension and related charges		(0.24	)		(0.04	)		(0.68	)		(0.14	)
Aircraft charges		-			(0.12	)		(0.01	)		(0.04	)
Total items excluded		(0.24	)		(0.16	)		(0.69	)		(0.18	)
Mainline CASM excluding special items		9.75	¢		10.21	¢		9.79	¢		10.18	¢
Fuel expense		(2.90	)		(1.93	)		(2.58	)		(1.72	)
Mainline CASM excluding fuel expense and special items		6.85	¢		8.28	¢		7.21	¢		8.46	¢
Breakeven load factor		84.10	%		86.88	%		86.59	%		82.59	%
Items excluded:
Pension and related charges		(1.74	)		(0.31	)		(4.89	)		(0.94	)
Aircraft charges		-			(0.87	)		(0.07	)		(0.29	)
Total items excluded		(1.74	)		(1.18	)		(4.96	)		(1.23	)
Breakeven load factor excluding special items		82.36	%		85.70	%		81.63	%		81.36	%

	Three
	Months Ended
Capital Expenditures	Sept 30,
(in millions)	2005
Cash used by investing activities - GAAP
Flight equipment additions	$	80
Ground property & equipment additions		63
Add:
Aircraft seller financing		18
Less:
Sale of aircraft during the quarter 1		(42	)
Boston airport terminal project expenditures		(16	)
Other		(1	)
Capital expenditures	$	102

¹ In October 2003, we entered into a definitive agreement with a third party to sell 11 B-737-800 aircraft

immediately after those aircraft are delivered to us by the manufacturer in 2005. During the September 2005

quarter, one B-737-800 aircraft was delivered to us and subsequently sold to a third party under this agreement.

This line item represents the cost of the aircraft included in the flight equipment additions line item above.

Page 12 

Note 2: September 2005 Quarter Traffic, Capacity, Load Factor, Yield and Unit Revenue vs. September 2004 Quarter

Year-Over-Year Change
	North America	Atlantic	Latin America	Pacific
Traffic	5.8%	7.8%	24.7%	(2.3%)
Capacity	2.7%	8.1%	30.7%	(0.1%)
Load Factor	2.3 pts.	(0.3) pts.	(3.4) pts.	(1.9)pts.
Yield	1.6%	6.1%	1.1%	2.9%
Passenger Unit Revenue	4.6%	5.7%	(3.5%)	0.6%