10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-5424

DELTA AIR LINES, INC.

State of Incorporation: Delaware

I.R.S. Employer Identification No.: 58-0218548

Post Office Box 20706, Atlanta, Georgia 30320-6001

Telephone: (404) 715-2600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ                Accelerated filer  ¨                Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes  þ    No  ¨

Number of shares outstanding by each class of common stock, as of June 30, 2008:

Common Stock, $0.0001 par value—303,892,307 shares outstanding

This document is also available through our website at http://www.delta.com.

Unless otherwise indicated, the terms “Delta,” the “Company,” “we,” “us” and “our” refer to Delta Air Lines, Inc. and its subsidiaries.

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about 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. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. For examples of such risks and uncertainties, please see the cautionary statements contained in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (“Form 10-K”) and “Part II, Item 1A. Risk Factors” in this Form 10-Q. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DELTA AIR LINES, INC.

Consolidated Balance Sheets

ASSETS (in millions)	June 30, 2008			December 31, 2007
	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	3,239		$	2,648
Short-term investments		103			138
Restricted cash		517			520
Accounts receivable, net of allowance for uncollectible accounts of $28 and $26 at June 30, 2008 and December 31, 2007, respectively		1,418			1,066
Expendable parts and supplies inventories, net of allowance for obsolescence of $19 and $11 at June 30, 2008 and December 31, 2007, respectively		225			262
Deferred income taxes, net		196			142
Fuel hedge derivatives		879			53
Prepaid expenses and other		590			411
Total current assets		7,167			5,240
PROPERTY AND EQUIPMENT:
Flight equipment		10,098			9,525
Accumulated depreciation		(525	)		(299	)
Flight equipment, net		9,573			9,226
Ground property and equipment		2,025			1,943
Accumulated depreciation		(418	)		(246	)
Ground property and equipment, net		1,607			1,697
Flight and ground equipment under capital leases		624			602
Accumulated amortization		(111	)		(63	)
Flight and ground equipment under capital leases, net		513			539
Advance payments for equipment		306			239
Total property and equipment, net		11,999			11,701
OTHER ASSETS:
Goodwill		5,169			12,104
Identifiable intangibles, net of accumulated amortization of $254 and $147 at June 30, 2008 and December 31, 2007, respectively		2,342			2,806
Fuel hedge derivatives		350			—
Other noncurrent assets		624			572
Total other assets		8,485			15,482
Total assets	$	27,651		$	32,423

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2

DELTA AIR LINES, INC.

Consolidated Balance Sheets

LIABILITIES AND SHAREOWNERS’ EQUITY (in millions, except share data)	June 30, 2008			December 31, 2007
	(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt and capital leases	$	796		$	1,014
Air traffic liability		3,064			1,982
SkyMiles deferred revenue		1,096			1,055
Fuel hedge margin		973			—
Accrued salaries and related benefits		547			734
Taxes payable		422			323
Accounts payable		347			363
Note payable		—			295
Other accrued liabilities		887			839
Total current liabilities		8,132			6,605
NONCURRENT LIABILITIES:
Long-term debt and capital leases		8,338			7,986
Pension and related benefits		2,995			3,002
SkyMiles deferred revenue		2,123			2,276
Deferred income taxes, net		811			855
Postretirement benefits		856			865
Other noncurrent liabilities		675			721
Total noncurrent liabilities		15,798			15,705
COMMITMENTS AND CONTINGENCIES
SHAREOWNERS’ EQUITY:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 311,321,385 and 299,464,669 shares issued at June 30, 2008 and December 31, 2007, respectively		—			—
Additional paid-in capital		9,541			9,512
(Accumulated deficit) retained earnings		(7,120	)		314
Accumulated other comprehensive income		1,451			435
Stock held in treasury, at cost, 7,429,078 and 7,238,973 shares at June 30, 2008 and December 31, 2007, respectively		(151	)		(148	)
Total shareowners’ equity		3,721			10,113
Total liabilities and shareowners’ equity	$	27,651		$	32,423

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

DELTA AIR LINES, INC.

Consolidated Statements of Operations

(Unaudited)

	Successor						Predecessor			Successor						Predecessor
(in millions, except per share data)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007			One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007			Four Months Ended April 30, 2007
OPERATING REVENUE:
Passenger:
Mainline	$	3,627		$	2,338		$	1,046		$	6,688		$	2,338		$	3,829
Regional affiliates		1,143			760			349			2,182			760			1,296
Cargo		160			82			36			294			82			148
Other, net		569			268			124			1,101			268			523
Total operating revenue		5,499			3,448			1,555			10,265			3,448			5,796
OPERATING EXPENSE:
Aircraft fuel and related taxes		1,678			790			322			3,100			790			1,270
Salaries and related costs		1,092			708			331			2,183			708			1,302
Contract carrier arrangements		931			530			239			1,827			530			956
Depreciation and amortization		302			193			95			599			193			386
Aircraft maintenance materials and outside repairs		295			165			82			563			165			320
Contracted services		257			160			83			511			160			326
Passenger commissions and other selling expenses		248			175			78			473			175			298
Landing fees and other rents		185			122			60			364			122			250
Passenger service		105			61			24			189			61			95
Aircraft rent		67			36			20			131			36			90
Impairment of goodwill		839			—			—			6,939			—			—
Impairment of intangible assets		357			—			—			357			—			—
Restructuring and related items		104			—			—			120			—			—
Profit sharing		—			65			14			—			65			14
Other		126			98			62			257			98			189
Total operating expense		6,586			3,103			1,410			17,613			3,103			5,496
OPERATING (LOSS) INCOME		(1,087	)		345			145			(7,348	)		345			300
OTHER (EXPENSE) INCOME:
Interest expense (contractual interest expense totaled $88 and $366 for the one month and four months ended April 30, 2007)		(141	)		(120	)		(62	)		(288	)		(120	)		(262	)
Interest income		25			33			4			52			33			14
Miscellaneous, net		40			9			(2	)		31			9			27
Total other expense, net		(76	)		(78	)		(60	)		(205	)		(78	)		(221	)
(LOSS) INCOME BEFORE REORGANIZATION ITEMS, NET		(1,163	)		267			85			(7,553	)		267			79
REORGANIZATION ITEMS, NET		—			—			1,339			—			—			1,215
(LOSS) INCOME BEFORE INCOME TAXES		(1,163	)		267			1,424			(7,553	)		267			1,294
INCOME TAX BENEFIT (PROVISION)		119			(103	)		4			119			(103	)		4
NET (LOSS) INCOME	$	(1,044	)	$	164		$	1,428		$	(7,434	)	$	164		$	1,298
BASIC (LOSS) EARNINGS PER SHARE	$	(2.64	)	$	0.42		$	7.24		$	(18.79	)	$	0.42		$	6.58
DILUTED (LOSS) EARNINGS PER SHARE	$	(2.64	)	$	0.42		$	5.19		$	(18.79	)	$	0.42		$	4.63

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Cash Flow

(Unaudited)

	Successor						Predecessor
(in millions)	Six Months Ended June 30, 2008			Two Months Ended June 30, 2007			Four Months Ended April 30, 2007
Net cash provided by (used in) operating activities	$	1,272		$	(210	)	$	1,025
Cash Flows From Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments		(793	)		(89	)		(167	)
Ground property and equipment, including technology		(113	)		(31	)		(41	)
Decrease in restricted cash		6			58			56
Proceeds from sales of flight equipment		83			6			21
Proceeds from sales of investments		—			—			34
Other, net		8			—			—
Net cash used in investing activities		(809	)		(56	)		(97	)
Cash Flows From Financing Activities:
Payments on long-term debt and capital lease obligations		(712	)		(74	)		(166	)
Proceeds from Exit Facilities		—			—			1,500
Proceeds from long-term obligations		848			—			—
Payments on DIP Facility		—			—			(2,076	)
Other, net		(8	)		—			(50	)
Net cash provided by (used in) financing activities		128			(74	)		(792	)
Net Increase (Decrease) in Cash and Cash Equivalents		591			(340	)		136
Cash and cash equivalents at beginning of period		2,648			2,170			2,034
Cash and cash equivalents at end of period	$	3,239		$	1,830		$	2,170
Supplemental disclosure of cash paid (refunded) for:
Interest	$	310		$	77		$	243
Interest received from the preservation of cash due to Chapter 11 filing		—			—			(50	)
Non-cash transactions:
Flight equipment	$	—		$	—		$	135
Flight equipment incentive		54			—			—
Flight equipment under capital leases		21			4			13
Ground equipment		4			—			—

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

DELTA AIR LINES, INC.

Notes to the Condensed Consolidated Financial Statements

June 30, 2008

(Unaudited)

1. BACKGROUND

General Information

Delta Air Lines, Inc., a Delaware corporation, is a major air carrier that provides scheduled air transportation for passengers and cargo throughout the United States (“U.S.”) and around the world. Our Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries, including Comair, Inc. (“Comair”), which are collectively referred to as Delta.

On April 30, 2007 (the “Effective Date”), we and substantially all of our subsidiaries (collectively, the “Debtors”) emerged from bankruptcy as a competitive airline with a global network. Upon emergence from Chapter 11, we adopted fresh start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”). The adoption of fresh start reporting resulted in our becoming a new entity for financial reporting purposes. Accordingly, the Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to the Condensed Consolidated Financial Statements prior to that date.

References in this Form 10-Q to “Successor” refer to Delta on or after May 1, 2007, after giving effect to (1) the cancellation of Delta common stock issued prior to the Effective Date; (2) the issuance of new Delta common stock and certain debt securities in accordance with the Debtors’ Joint Plan of Reorganization (the “Plan of Reorganization”); and (3) the application of fresh start reporting. References to “Predecessor” refer to Delta prior to May 1, 2007.

Effectiveness of Plan of Reorganization. Under the Plan of Reorganization, most holders of allowed general, unsecured claims against the Debtors received or will receive new common stock in satisfaction of their claims. Holders of de minimis allowed general, unsecured claims received cash in satisfaction of their claims.

The Plan of Reorganization contemplates the distribution of 400 million shares of common stock, consisting of (1) 386 million shares to holders of allowed general, unsecured claims (including our pilots) and (2) up to 14 million shares to our approximately 39,000 eligible non-contract, non-management employees. As of June 30, 2008, we have made the following distributions of common stock in accordance with the Plan of Reorganization:

• 288 million shares of common stock to holders of $13 billion of allowed general, unsecured claims. We have reserved 98 million shares of common stock for future distributions to holders of allowed general, unsecured claims when disputed claims are resolved.

• Approximately 14 million shares of common stock to eligible non-contract, non-management employees.

The U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) also authorized the distribution of equity awards to our approximately 1,200 officers, director level employees and other management personnel. For additional information about these awards, see Note 12 of the Notes to the Consolidated Financial Statements in our Form 10-K.

As permitted under the bankruptcy process, many of the Debtors’ creditors filed proofs of claim with the Bankruptcy Court. Through the claims resolution process, many claims were disallowed by the Bankruptcy Court because they were duplicative, amended or superseded by later filed claims, were without merit, or were otherwise overstated. Throughout the Chapter 11 proceedings, the Debtors also resolved many claims through settlements or by Bankruptcy Court orders following the filing of an objection. The Debtors will continue to settle claims and file additional objections with the Bankruptcy Court.

We believe there will be no further material impact to the Consolidated Statements of Operations of the Successor from the settlement of unresolved allowed general, unsecured claims against the Debtors because the holders of such claims will receive under the Plan of Reorganization only their pro rata share of the new common stock of the Successor.

The Plan of Reorganization provides that administrative and priority claims will be satisfied with cash. Certain administrative and priority claims remain unpaid, and we will continue to settle claims and file objections with the Bankruptcy Court with respect to such claims as appropriate. All of these claims have been accrued by the Successor based upon the best available estimates of amounts to be paid.

In light of the substantial number and amount of claims filed, we expect the claims resolution process will take considerable time to complete. Accordingly, we do not presently know either the ultimate number and amount of, or the exact recovery with respect to, allowed claims.

6

Reorganization Items, net

The following table summarizes the components of reorganization items, net on our Consolidated Statements of Operations for the one month and four months ended April 30, 2007:

	Predecessor
(in millions)	One Month Ended April 30, 2007			Four Months Ended April 30, 2007
Discharge of claims and liabilities(1)	$	4,424		$	4,424
Revaluation of frequent flyer obligation(2)		(2,586	)		(2,586	)
Revaluation of other assets and liabilities(3)		238			238
Aircraft financing renegotiations and rejections(4)		(438	)		(440	)
Contract carrier agreements(5)		—			(163	)
Emergence compensation(6)		(162	)		(162	)
Professional fees		(51	)		(88	)
Pilot collective bargaining agreement(7)		—			(83	)
Interest income(8)		12			50
Facility leases(9)		(81	)		43
Vendor waived pre-petition debt		5			29
Retiree healthcare claims(10)		—			(26	)
Other		(22	)		(21	)
Total reorganization items, net	$	1,339		$	1,215

⁽¹⁾ The discharge of claims and liabilities primarily relates to allowed general, unsecured claims in our Chapter 11 proceedings, such as (a) the Air Line Pilots Association’s (“ALPA”) claim under our comprehensive agreement reducing pilot labor costs; (b) the Pension Benefit Guaranty Corporation’s claim relating to the termination of our qualified defined benefit pension plan for pilots; (c) claims relating to changes in postretirement healthcare benefits and the rejection of our non-qualified retirement plans; (d) claims associated with debt and certain municipal bond obligations based upon their rejection; (e) claims relating to the restructuring of financing arrangements or the rejection of leases for aircraft; and (f) other claims due to the rejection or modification of certain executory contracts, unexpired leases and contract carrier agreements.

In accordance with the Plan of Reorganization, we discharged our obligations to holders of allowed general, unsecured claims in exchange for the distribution of 386 million newly issued shares of common stock and the issuance of certain debt securities and obligations. Accordingly, in discharging our liabilities subject to compromise, we recognized a reorganization gain of $4.4 billion as follows:

(in millions)
Liabilities subject to compromise	$	19,345
Reorganization equity value		(9,400	)
Liabilities reinstated		(4,429	)
Issuance of new debt securities and obligations, net of discounts of $22		(938	)
Other		(154	)
Discharge of claims and liabilities	$	4,424

⁽²⁾ We revalued our SkyMiles frequent flyer obligation at fair value as a result of fresh start reporting, which resulted in a $2.6 billion reorganization charge. For information about a change in our accounting policy for the SkyMiles program, see Note 2 of the Notes to the Consolidated Financial Statements in our Form 10-K.

⁽³⁾ We revalued our assets and liabilities at estimated fair value as a result of fresh start reporting. This resulted in a $238 million gain, primarily reflecting the fair value of newly recognized intangible assets, which was partially offset by reductions in the fair value of tangible property and equipment.

⁽⁴⁾ Estimated claims for the one month ended April 30, 2007 relate to the restructuring of the financing arrangements for 127 aircraft, the rejection of two aircraft leases and adjustments to prior claims estimates. Estimated claims for the four months ended April 30, 2007 relate to the restructuring of the financing arrangements for 143 aircraft, the rejection of two aircraft leases and adjustments to prior claims estimates.

⁽⁵⁾ In connection with amendments to our contract carrier agreements with Chautauqua Airlines, Inc. (“Chautauqua”) and Shuttle America Corporation (“Shuttle America”), both subsidiaries of Republic Airways Holdings, Inc. (“Republic Holdings”), which, among other things, reduced the rates we pay those carriers, we recorded (a) a $91 million allowed general, unsecured claim and (b) a $37 million net charge related to our surrender of warrants to purchase up to 3.5 million shares of Republic Holdings common stock. Additionally, in connection with an amendment to our contract carrier agreement with Freedom Airlines, Inc. (“Freedom”), a subsidiary of Mesa Air Group, Inc., which, among other things, reduced the rates we pay that carrier, we recorded a $35 million allowed general, unsecured claim.

⁽⁶⁾ In accordance with the Plan of Reorganization, we made $130 million in lump-sum cash payments to approximately 39,000 eligible non-contract, non-management employees. We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan of Reorganization, of approximately 14 million shares of common stock to these employees. For additional information regarding the stock grants, see Note 12 of the Notes to the Consolidated Financial Statements in our Form 10-K.

⁽⁷⁾ Allowed general, unsecured claims of $83 million for the four months ended April 30, 2007 in connection with Comair’s comprehensive agreement with ALPA reducing pilot labor costs.

7

⁽⁸⁾ Reflects interest earned due to the preservation of cash during our Chapter 11 proceedings.

⁽⁹⁾ For the one month ended April 30, 2007, this item primarily reflects a net $80 million charge from an allowed general, unsecured claim under our settlement agreement relating to the restructuring of certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (the “Cincinnati Airport Settlement Agreement”). For the four months ended April 30, 2007, we recorded a net $43 million gain, primarily reflecting a $126 million net gain in connection with our settlement agreement with the Massachusetts Port Authority (“Massport”), which was partially offset by the aforementioned $80 million charge. For additional information regarding the Cincinnati Airport Settlement Agreement and our settlement agreement with Massport, see Notes 6 and 8 of the Notes to the Consolidated Financial Statements in our Form 10-K.

⁽¹⁰⁾ Allowed general, unsecured claims in connection with agreements reached with committees representing pilot and non-pilot retired employees reducing their postretirement healthcare benefits.

2. ACCOUNTING AND REPORTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K.

In preparing the Condensed Consolidated Financial Statements for the Predecessor, we applied SOP 90-7, which requires that the financial statements for periods subsequent to the Chapter 11 filing distinguish transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses, realized gains and losses and provisions for losses that were realized or incurred in the bankruptcy proceedings were recorded in reorganization items, net on the accompanying Consolidated Statements of Operations.

Management believes that the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including adjustments required by fresh start reporting, normal recurring items, restructuring and related items and reorganization items, considered necessary for a fair statement of results for the interim periods presented.

Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2008 are not necessarily indicative of operating results for the entire year.

Short-Term Investments

At June 30, 2008 and December 31, 2007, our short-term investments were primarily comprised of auction rate securities. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” we record these investments as trading securities at fair value on our Consolidated Balance Sheets.

At June 30, 2008 and December 31, 2007, the fair value of our insured auction rate securities was $103 million and $107 million, respectively. The cost of these investments was $110 million. Fair value was determined using a discounted cash flow model as recent auctions of these securities were not successful, resulting in our continuing to hold these securities and issuers paying interest at the maximum contractual rate. This valuation technique considers the creditworthiness of the underlying debt issuer and insurance provider. Depending on future market conditions, there may be future fair market adjustments of our insured auction rate securities. For additional information regarding the valuation of our short-term investments, see Note 3.

Restricted Cash

Restricted cash included in current assets on our Consolidated Balance Sheets totaled $517 million and $520 million at June 30, 2008 and December 31, 2007, respectively. Restricted cash recorded in other noncurrent assets on our Consolidated Balance Sheets totaled $15 million at each of June 30, 2008 and December 31, 2007. Restricted cash is recorded at cost, which approximates fair value.

At June 30, 2008, our restricted cash balance primarily relates to fuel hedge margin received from a counterparty and cash held to meet certain projected self-insurance obligations. At December 31, 2007, our restricted cash balance primarily related to $295 million held in a grantor trust for the benefit of Delta pilots to fund the then remaining balance of an obligation we had under our comprehensive agreement with ALPA to reduce pilot labor costs. The amount in the grantor trust was classified as restricted cash with a corresponding note payable on our Consolidated Balance Sheet until it was distributed in January 2008.

8

Goodwill and Other Intangible Assets

Goodwill reflects the excess of the reorganization value of the Successor over the fair value of tangible and identifiable intangible assets, reduced by liabilities, from the adoption of fresh start reporting, adjusted for impairment. The following table reflects the change in the carrying amount of goodwill at June 30, 2008:

(in millions)	Total
Balance at December 31, 2007	$	12,104
Impairment charge		(6,939	)
Adjustment to pre-emergence deferred tax assets and reserves		4
Balance at June 30, 2008		5,169

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), we apply a fair value-based impairment test to the net book value of goodwill and indefinite-lived intangible assets on an annual basis and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The analysis of potential impairment of goodwill requires a two-step process. The first step is the estimation of fair value. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value.

During the three months ended March 31, 2008, we experienced a significant decline in market capitalization driven primarily by record fuel prices and overall airline industry conditions. In addition, the announcement of our intention to merge with Northwest Airlines Corporation (“Northwest”) established a stock exchange ratio based on the relative valuation of Delta and Northwest (see Note 11). We determined that these factors combined with further increases in fuel prices were an indicator that a goodwill impairment test was required pursuant to SFAS 142. As a result, we estimated fair value based on a discounted projection of future cash flows, supported with a market-based valuation. We determined that goodwill was impaired and recorded a non-cash charge of $6.1 billion based on a preliminary assessment. We finalized the second step of the impairment test during the June 2008 quarter and recorded an additional non-cash charge of $839 million due to the net increase in the fair value of our other assets and liabilities for a total impairment charge to $6.9 billion. In estimating fair value under this second step, we based our estimates and assumptions on the same valuation techniques employed and levels of inputs used to estimate the fair value of goodwill upon adoption of fresh start reporting.

In accordance with SOP 90-7, a reduction in the valuation allowance associated with the realization of pre-emergence deferred tax assets will sequentially reduce the value of recorded goodwill followed by other indefinite-lived intangible assets until the net carrying cost of these assets is zero. During the six months ended June 30, 2008, we increased goodwill by $4 million associated with adjustments to pre-emergence deferred tax assets and reserves.

In addition to the goodwill impairment charge, we recorded a non-cash charge of $357 million ($238 million after tax) to reduce the carrying value of certain intangible assets based on their revised estimated fair values. This charge was recorded to impairment of intangible assets on our Consolidated Statement of Operations for the three and six months ended June 30, 2008. The following tables reflect the changes in the carrying amount of intangible assets at June 30, 2008:

Indefinite-Lived Intangible Assets

(in millions)	Carrying Amount December 31, 2007		Impairment			Carrying Amount June 30, 2008
Trade name	$	880	$	(30	)	$	850
Takeoff and arrival slots		635		(85	)		550
SkyTeam alliance		480		(199	)		281
Other		2		—			2
Total	$	1,997	$	(314	)	$	1,683

9

Definite-Lived Intangible Assets

(in millions)	Net Carrying Amount December 31, 2007		Amortization			Impairment			Net Carrying Amount June 30, 2008
Marketing agreements	$	581		(97	)		—		$	484
Contracts		195		(8	)		(12	)		175
Customer relationships		33		(2	)		(31	)		—
Total	$	809	$	(107	)	$	(43	)	$	659

Changes in assumptions or circumstances could result in an additional impairment in the period in which the change occurs and in future years. Factors which could cause impairment include, but are not limited to, (1) long-term negative trends in our market capitalization, (2) continued high fuel prices, (3) declining passenger mile yields, (4) lower demand as a result of the weakening U.S. economy, (5) interruption to our operations due to an employee strike, terrorist attack, or other reasons and (6) consolidation of competitors within the industry. For additional information about our accounting policy for goodwill and other intangible assets, see Notes 2 and 5 of the Notes to the Consolidated Financial Statements in our Form 10-K.

Reclassifications

We reclassified certain prior period amounts in our Condensed Consolidated Financial Statements to be consistent with our current period presentation.

3. FAIR VALUE MEASUREMENTS

SFAS No. 157, “Fair Value Measurements (“SFAS 157”), among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. SFAS 157 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

• Level 1. Observable inputs such as quoted prices in active markets;

• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

(in millions)	June 30, 2008		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	3,093	$	3,093	$	—	$	—
Short-term investments		103		—		—		103
Fuel hedge derivatives		1,229		—		234		995

Our fuel hedge option contracts are valued under the income approach using option-pricing models. During the June 2008 quarter, we reevaluated the valuation inputs used for our option contracts. As a result, we reclassified these contracts from Level 2 to Level 3 within SFAS 157’s three-tier fair value hierarchy since valuation at December 31, 2007.

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Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

(in millions)	Short-term Investments			Fuel Hedging Derivatives
Balance at December 31, 2007	$	107		$	—
Transfers to Level 3		—			53
Change in fair value included in earnings		(4	)		231
Change in fair value included in other comprehensive income		—			789
Purchases and settlements		—			(78	)
Balance at June 30, 2008	$	103		$	995
(Losses) gains included in earnings attributable to the change in unrealized (losses) gains relating to assets still held at June 30, 2008	$	(4	)	$	14

Gains (losses) included in earnings (above) for the six months ended June 30, 2008 are recorded on our Consolidated Statement of Operations as follows:

(in millions)	Fuel Expense and Related Taxes		Other (Expense) Income
Total gains (losses) included in earnings	$	225	$	(8	)
Change in unrealized gains relating to assets still held at June 30, 2008	$	—	$	10

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

(in millions)	June 30, 2008		Significant Unobservable Inputs (Level 3)		Total Impairment
Goodwill	$	5,169	$	5,169	$	6,939
Indefinite-lived intangible assets		1,683		1,683		314
Definite-lived intangible assets		659		659		43

At December 31, 2007, we had goodwill of $12.1 billion, indefinite-lived intangible assets of $2.0 billion and definite-lived intangible assets of $809 million. During the six months ended June 30, 2008, we recorded non-cash impairment charges of $6.9 billion for goodwill, $314 million for indefinite-lived intangible assets and $43 million for definite-lived intangible assets. For additional information regarding these impairments, see Note 2.

We did not record any other fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2008.

4. DERIVATIVE INSTRUMENTS

Fuel Hedging Program

Our results of operations are materially impacted by changes in the price of aircraft fuel. In an effort to manage our exposure to changes in aircraft fuel prices, we periodically enter into derivative contracts comprised of crude oil, heating oil and jet fuel swap, collar and call option contracts to hedge a portion of our projected aircraft fuel requirements, including those of our contract carriers under capacity purchase agreements. As of June 30, 2008, our open fuel hedge contracts had an estimated fair value gain of $1.2 billion, which is recorded in fuel hedge derivatives within both current and other assets on our Consolidated Balance Sheet.

In accordance with our fuel hedge agreements, (1) we may require counterparties to fund the margin associated with our gain position on fuel hedge contracts, and (2) counterparties may require us to fund the margin associated with our loss position on these contracts. The amount of the margin, if any, is periodically adjusted based on the fair value of the fuel hedge contracts. The margin requirements are intended to mitigate a party’s exposure to market volatility and the associated contracting party risk.

The fuel hedge margin we receive from counterparties is recorded, as appropriate, in cash and cash equivalents or restricted cash, with the offsetting obligation in fuel hedge margin on our Consolidated Balance Sheet. The margin we provide to counterparties is recorded in restricted cash on our Consolidated Balance Sheet. All cash flows associated with purchasing and selling fuel hedge contracts are classified as operating cash flows on our Condensed Consolidated Statement of Cash Flows.

At June 30, 2008, we held $973 million of fuel hedge margin from counterparties, $671 million of which is recorded in cash and cash equivalents and $302 million of which is recorded in restricted cash on our Consolidated Balance Sheet. At June 30, 2008, we were not required to fund any fuel hedge margin with counterparties.

For option contracts entered into during 2008, we assess effectiveness based on the total changes in an option’s cash flows (the measurement includes the option’s total change in fair value, not just the change in intrinsic value). Ineffectiveness is measured as the excess, if any, of the cumulative change in fair value of the option over the cumulative change in fair value of a “perfectly effective” hypothetical derivative, which acts as a proxy for the fair value of the cumulative change in expected cash flows from the purchase of aircraft fuel.

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For option contracts entered into prior to 2008, ineffectiveness is measured based on the intrinsic value of the derivative. The difference between the fair value and intrinsic value represents the time value of the option contract. Time value is excluded from the calculation of ineffectiveness and amortized to other (expense) income on our Consolidated Statements of Operations.

As of June 30, 2008, our fuel hedging position for the six months ending December 31, 2008 and the years ending December 31, 2009 and 2010 is as follows:

(in millions, unless otherwise stated)	Percentage of Projected Fuel Requirements Hedged		Contract Fair Value at June 30, 2008
Six months ending December 31, 2008	44	%	$	628
2009	22			455
2010	5			146
Total	20	%	$	1,229

Gains (losses) recorded on our Consolidated Statements of Operations for the three months ended June 30, 2008, the two months ended June 30, 2007 and the one month ended April 30, 2007 related to our fuel hedge contracts are as follows:

	Aircraft fuel and related taxes						Other (expense) income
	Successor				Predecessor		Successor				Predecessor
(in millions)	Three Months Ended June 30, 2008		Two Months Ended June 30, 2007		One Month Ended April 30, 2007		Three Months Ended June 30, 2008		Two Months Ended June 30, 2007		One Month Ended April 30, 2007
Open fuel hedge contracts	$	—	$	—	$	—	$	23	$	2	$	(7	)
Settled fuel hedge contracts		313		4		10		8		—		(2	)
Total	$	313	$	4	$	10	$	31	$	2	$	(9	)

Gains (losses) recorded on our Consolidated Statements of Operations for the six months ended June 30, 2008, the two months ended June 30, 2007 and the four months ended April 30, 2007 related to our fuel hedge contracts are as follows:

	Aircraft fuel and related taxes							Other (expense) income
	Successor				Predecessor			Successor				Predecessor
(in millions)	Six Months Ended June 30, 2008		Two Months Ended June 30, 2007		Four Months Ended April 30, 2007			Six Months Ended June 30, 2008		Two Months Ended June 30, 2007		Four Months Ended April 30, 2007
Open fuel hedge contracts	$	—	$	—	$	—		$	6	$	2	$	15
Settled fuel hedge contracts		354		4		(8	)		8		—		(1	)
Total	$	354	$	4	$	(8	)	$	14	$	2	$	14

For additional information about our fuel hedging program, see Note 2 of the Notes to the Consolidated Financial Statements in our Form 10-K.

Interest Rate Swaps

From time to time, we may enter into interest rate swap agreements. We record interest rate swap agreements that qualify as fair value hedges under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) at their fair value on our Consolidated Balance Sheets and adjust these amounts and the related debt to reflect changes in their fair values. We record net periodic interest rate swap settlements as adjustments to interest expense in other income (expense) on our Consolidated Statements of Operations. During June 2008, we entered into interest rate swap agreements converting our interest rate exposure on a portion of our debt portfolio from a fixed rate to a floating rate. The interest rate swap agreements have an aggregate notional amount of $1 billion maturing September 2011 through July 2012. The floating rates are based on three month LIBOR plus a margin.

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At June 30, 2008, our interest rate swap agreements had a fair value of $3 million, which was recorded in other noncurrent assets on our Consolidated Balance Sheet. In accordance with fair value hedge accounting, the carrying value of our long-term debt at June 30, 2008 included $3 million of adjustments to debt.

5. DEBT

Aircraft Financing

During the March 2008 quarter, we entered into a facility to refinance debt that matured in January 2008 and to finance two B-777-200LR aircraft deliveries. Borrowings under this facility are secured by certain aircraft, including the two B-777-200LR aircraft described above, that we own. At June 30, 2008, total borrowings under this facility were $518 million. Our obligations under this facility will be paid in installments through February 20, 2020 and bear interest at a floating rate based on LIBOR plus a margin.

Pre-Delivery Deposits Financing

In December 2007, we entered into a facility to borrow up to $233 million to finance certain pre-delivery payments payable by us to The Boeing Company (“Boeing”) for future deliveries of 10 B-737-700 aircraft and eight B-777-200LR aircraft.

The facility consists of 18 separate loans, one loan for each covered aircraft. The separate loan for each covered aircraft matures upon the delivery of that aircraft to us by Boeing. The loans under the facility have various maturity dates, beginning in February 2008 through August 2009, and bear interest at a floating rate based on LIBOR plus a margin.

During the six months ended June 30, 2008, we borrowed $47 million under this facility, net of repayments by us, upon the delivery of covered aircraft. As of June 30, 2008, $203 million of borrowings were outstanding under this facility.

For additional information regarding this facility, see Note 6 of the Notes to the Consolidated Financial Statements in our Form 10-K.

CRJ-900 Financing

In September 2007, we and our wholly owned subsidiary, Comair, each entered into separate agreements to borrow up to $290 million with respect to future deliveries of CRJ-900 aircraft. We guarantee payment on behalf of Comair. Our obligations under these debt agreements are secured by the underlying aircraft.

A separate loan for each CRJ-900 aircraft is issued upon delivery of that aircraft to us. Our obligations under these agreements will be paid in installments over 15-years after delivery. The loans under these agreements will have various maturity dates and bear interest at a floating rate based on LIBOR plus a margin.

As of June 30, 2008, a total of $397 million of borrowings were outstanding under these agreements.

Other Aircraft Financing Arrangements

In July 2008, we received a commitment from a third party to finance, on a secured basis at the time of acquisition, a substantial portion of the purchase price for the future deliveries of all then-outstanding firm orders of Mainline aircraft (including options for two B-777-200LR aircraft we exercised in July 2008, but excluding orders for 32 B-773-800 aircraft that we have definitive agreements to sell to third parties immediately following delivery to us by the manufacturer). Borrowings under this commitment (1) will be due in monthly installments for 12 years after the date of borrowing and (2) bear interest at LIBOR plus a margin.

Covenants

We were in compliance with all debt and aircraft lease financing agreement covenants at June 30, 2008.

6. PURCHASE COMMITMENTS AND CONTINGENCIES

Aircraft Order Commitments

Future commitments for aircraft on firm order as of June 30, 2008 approximate $2.6 billion. The following table shows the timing of these commitments:

Year Ending December 31, (in millions)	Amount
Six months ending December 31, 2008	$	590
2009		1,310
2010		710
Total	$	2,610

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Our aircraft order commitments as of June 30, 2008 consist of firm orders to purchase six B-777-200LR aircraft, 10 B-737-700 aircraft, 34 B-737-800 aircraft and 15 CRJ-900 aircraft as discussed below. Our firm orders to purchase 34 B-737-800 aircraft include 32 B-737-800 aircraft, which we have entered into definitive agreements to sell to third parties immediately following delivery of these aircraft to us by the manufacturer. These sales will reduce our future commitments by approximately $1.3 billion during the period from 2008 through 2010 ($80 million, $590 million and $650 million for 2008, 2009 and 2010, respectively). We have received long-term, secured financing commitments from a third party for a substantial portion of the purchase price for our firm orders for Mainline aircraft, as discussed in Note 5.

During 2007, we entered into agreements with Bombardier Inc. (“Bombardier”) to purchase 44 CRJ-900 aircraft for delivery between August 2007 and February 2010. These aircraft will be delivered in two-class, 76 seat configuration. We have available to us long-term, secured financing commitments to fund a substantial portion of the aircraft purchase price for these orders. We expect these CRJ-900 aircraft will be operated by regional air carriers under our capacity purchase agreements. Our agreements with Bombardier permit us to assign to other carriers our CRJ-900 aircraft orders and related support provisions. In April 2007, we assigned to Pinnacle Airlines, Inc. (“Pinnacle”) our orders to purchase 16 CRJ-900 aircraft (the “CRJ-900 Assigned Aircraft”). The remaining 28 CRJ-900 aircraft are scheduled for delivery through May 2009. As of June 30, 2008, we had accepted delivery of 20 of these 28 CRJ-900 aircraft, seven of which are being leased to a contract carrier.

The above table includes the potential commitment by us for the CRJ-900 Assigned Aircraft. Pinnacle is required to purchase and make the related payments for those aircraft. We are required to cure any default by Pinnacle of its purchase obligation, and have certain indemnification rights against it for costs incurred in effecting such a cure. As of June 30, 2008, Pinnacle has accepted delivery of nine of the 16 CRJ-900 Assigned Aircraft, and we have received no notice that Pinnacle has defaulted on its purchase obligation.

In July 2008, we exercised options to purchase two additional B-777-200LR aircraft for delivery in 2010. These orders are covered by the third party financing commitment discussed above in Note 5.

Contract Carrier Agreements

Capacity Purchase Agreements. During the six months ended June 30, 2008, seven regional air carriers (in addition to Comair) operated for us pursuant to capacity purchase agreements. Under these agreements, the regional air carriers operate some or all of their aircraft under our flight code, and we schedule those aircraft, sell the seats on those flights and retain the related revenues. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services.

The following table shows the estimated payments under these capacity purchase agreements. The payments set forth in the table assume certain levels of flying by the contract carriers, but this flying is subject to change in accordance with the terms of the agreements between us and the contract carriers and other factors. The payments also reflect assumptions regarding certain costs such as fuel, labor, maintenance, insurance, catering, property tax and landing fees. Accordingly, our actual payments under these agreements could differ materially from the estimated payments set forth in the table.

Year Ending December 31, (in millions)	Amount(1)(2)(3)
Six months ending December 31, 2008	$	1,520
2009		3,030
2010		3,100
2011		3,160
2012		3,010
Thereafter		17,350
Total	$	31,170

⁽¹⁾ These amounts represent estimated payments based on certain assumptions under our capacity purchase agreements with Atlantic Southeast Airlines, Inc., Chautauqua, ExpressJet Airlines, Inc. (“Express Jet”), Freedom, Pinnacle, Shuttle America and SkyWest Airlines, Inc. (excluding contract carrier lease payments accounted for as operating leases, which are described in Note 7 of the Notes to the Consolidated Financial Statements in our Form 10-K). Our capacity purchase agreement with ExpressJet will terminate by mutual agreement as of September 1, 2008.

⁽²⁾ In March 2008, we issued a notice to Freedom to terminate, effective June 30, 2008, their ERJ-145 capacity purchase agreement due to Freedom’s failure to meet certain minimum operational performance requirements under the agreement. Freedom filed a lawsuit against us in the U.S. District Court for the Northern District of Georgia alleging, among other things, that our termination of the agreement was wrongful. In May 2008, the District Court granted Freedom’s request for a preliminary injunction, temporarily enjoining us from terminating Freedom’s ERJ-145 capacity purchase agreement. We have appealed this ruling to the U.S. Court of Appeals for the Eleventh Circuit.

⁽³⁾ In June 2008, we issued a notice to Pinnacle of our intent to terminate its capacity purchase agreement due to Pinnacle’s failure to meet certain minimum operational performance requirements under the agreement. Pinnacle has advised us that it believes we do not have the right to terminate the agreement. We have agreed for Pinnacle to continue as a connection carrier through September 2008 and are in discussions with Pinnacle regarding whether the matters underlying the termination notice can be resolved through mutual agreement. As a result of these matters, the table above does not include any payment we would have made to Pinnacle after September 2008.

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Contingencies Related to Termination of Contract Carrier Agreements

We may terminate the Chautauqua and Shuttle America agreements without cause at any time after May 2010 and July 2015, respectively, by providing certain advance notice. If we terminate either the Chautauqua or Shuttle America agreements without cause, Chautauqua or Shuttle America, respectively, has the right to (1) assign to us leased aircraft that the airline operates for us, provided we are able to continue the leases on the same terms the airline had prior to the assignment and (2) require us to purchase or lease any of the aircraft that the airline owns and operates for us at the time of the termination. If we are required to purchase aircraft owned by Chautauqua or Shuttle America, the purchase price would be equal to the amount necessary to (1) reimburse Chautauqua or Shuttle America for the equity it provided to purchase the aircraft and (2) repay in full any debt outstanding at such time that is not being assumed in connection with such purchase. If we are required to lease aircraft owned by Chautauqua or Shuttle America, the lease would have (1) a rate equal to the debt payments of Chautauqua or Shuttle America for the debt financing of the aircraft calculated as if 90% of the aircraft was debt financed by Chautauqua or Shuttle America and (2) other specified terms and conditions.

We estimate that the total fair values, determined as of June 30, 2008, of the aircraft that Chautauqua or Shuttle America could assign to us or require that we purchase if we terminate without cause our contract carrier agreements with those airlines (the “Put Right”) are approximately $470 million and $360 million, respectively. The actual amount that we may be required to pay in these circumstances may be materially different from these estimates. If the Chautauqua or Shuttle America Put Right is exercised, we must also pay to the exercising carrier 10% interest (compounded monthly) on the equity the carrier provided when it purchased the put aircraft. These equity amounts for Chautauqua and Shuttle America total $56 million and $34 million, respectively.

Legal Contingencies

We are involved in various legal proceedings relating to employment practices, environmental issues and other matters concerning our business. We cannot reasonably estimate the potential loss for certain legal proceedings because, for example, the litigation is in its early stages or the plaintiff does not specify the damages being sought.

Comair Flight 5191

On August 27, 2006, Comair Flight 5191 crashed shortly after take-off in a field near the Blue Grass Airport in Lexington, Kentucky. All 47 passengers and two members of the flight crew died in the accident. The third crew member survived with severe injuries. Lawsuits arising out of this accident have been filed against our wholly owned subsidiary, Comair, on behalf of 44 passengers. A number of lawsuits also name Delta, the Federal Aviation Administration (the “FAA”) and the third crew member, as a defendant. The lawsuits generally assert claims for wrongful death and related personal injuries, and seek unspecified damages, including punitive damages in most cases. As of July 8, 2008, settlements have been reached with the families of 17 of the 47 passengers. All the remaining passenger lawsuits are currently pending in the U.S. District Court for the Eastern District of Kentucky and have been consolidated as “In Re Air Crash at Lexington, Kentucky, August 27, 2006, Master File No. 5:06-CV-316.”

On July 8, 2008, the District Court granted Delta’s motion to dismiss all claims against Delta in the pending lawsuits. Comair continues to pursue settlement negotiations with the plaintiffs in these lawsuits. The settled cases have been dismissed with prejudice.

Comair has filed direct actions in the U.S. District Court for the Eastern District of Kentucky against the U.S. (based on the actions of the FAA), and in state court in Fayette County, Kentucky, against the Lexington Airport Board and certain other Lexington airport defendants. Comair has also filed third party complaints against these same parties in each of the pending passenger lawsuits. These actions seek to apportion liability for damages arising from this accident among all responsible parties.

During 2006, we recorded a long-term liability with a corresponding long-term receivable from our insurance carriers in other noncurrent liabilities and assets, respectively, on our Consolidated Balance Sheet relating to the Comair Flight 5191 accident. These amounts may be revised as additional information becomes available and as settlements are finalized. We carry aviation risk liability insurance and believe that this insurance is sufficient to cover any liability likely to arise from this accident.

Cincinnati Airport Settlement

On April 24, 2007, the Bankruptcy Court approved the Cincinnati Airport Settlement Agreement with the Kenton County Airport Board (“KCAB”) and UMB Bank, N.A., the trustee (the “Bond Trustee”) for the Series 1992 Bonds (as defined below), to restructure certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (the “Cincinnati Airport”). The Series 1992 Bonds include: (1) the $419 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series A (Delta Air Lines, Inc. Project), $397 million of which were then outstanding and (2) the $19 million Kenton County Airport Board Special Facilities Revenue Bonds, 1992 Series B (Delta Air Lines, Inc. Project), $16 million of which were then outstanding.

The Cincinnati Airport Settlement Agreement, among other things:

• provides for agreements under which we will continue to use certain facilities at the Cincinnati Airport at substantially reduced costs;

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• settles all disputes among us, the KCAB, the Bond Trustee and the former, present and future holders of the 1992 Bonds (the “1992 Bondholders”);

• gives the Bond Trustee, on behalf of the 1992 Bondholders, a $260 million allowed general, unsecured claim in our bankruptcy proceedings; and

• provides for our issuance of $66 million principal amount of senior unsecured notes to the Bond Trustee on behalf of the 1992 Bondholders.

On May 3, 2007, the parties to the Cincinnati Airport Settlement Agreement implemented that agreement in accordance with its terms. A small group of bondholders (the “Objecting Bondholders”) challenged the settlement in the U.S. District Court for the Southern District of New York. In August 2007, the District Court affirmed the Bankruptcy Court’s order approving the settlement. The Objecting Bondholders have appealed to the U.S. Court of Appeals for the Second Circuit.

Credit Card Processing Agreements

Visa/MasterCard Processing Agreement

In June 2007, we entered into an amended and restated Visa/MasterCard credit card processing agreement (the “Amended Processing Agreement”) that, among other things, resulted in the release by the credit card processor (“Processor”) of the Reserve (defined below) under the agreement and extended the term of the agreement to October 31, 2008.

The Amended Processing Agreement provides that no future cash reserve of an amount (“Reserve”) equal to the Processor’s potential liability for tickets purchased with Visa or MasterCard that had not yet been used for travel is required except in certain circumstances, including events that in the reasonable determination of the Processor would have a material adverse effect on us.

Further, if either we or the Processor determines not to extend the term of the Amended Processing Agreement beyond October 31, 2008, then the Processor may maintain a Reserve, if we do not maintain a certain amount of cash, during the period of 90 days before the expiration date of the agreement. The Reserve would equal approximately 100% of the value of tickets for which we had received payment under the Amended Processing Agreement, but which have not been used for travel. Such a Reserve would be released to us following termination of the Amended Processing Agreement as tickets are used for travel. There was no Reserve as of June 30, 2008.

American Express

Our American Express credit card processing agreement, entered into in 2004 and amended in 2005, provides that American Express is permitted to withhold our receivables in certain circumstances. These circumstances include a material increase in the risk that we will be unable to meet our obligations under the agreement or that our business undergoes a material adverse change that materially increases American Express’ risk of loss. No amounts were withheld as of June 30, 2008.

Other Contingencies

Regional Airports Improvement Corporation (“RAIC”)

We have obligations under a facilities agreement with the RAIC to pay the bond trustee amounts sufficient to pay the debt service on $47 million in Facilities Sublease Refunding Revenue Bonds. These bonds were issued in 1996 to refinance bonds that financed the construction of certain airport and terminal facilities we use at Los Angeles International Airport. We also provide a guarantee to the bond trustee covering payment of the debt service.

General Indemnifications

We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor’s related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at or in connection with the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence and their willful misconduct.

Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the condition, use or operation of the aircraft or such other equipment.

We believe that our insurance would cover most of our exposure to such liabilities and related indemnities associated with the types of lease and financing agreements described above, including real estate leases. However, our insurance does not typically cover environmental liabilities, although we have certain policies in place to meet the requirements of applicable environmental laws.

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Certain of our aircraft and other financing transactions include provisions, which require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes.

We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

Employees Under Collective Bargaining Agreements

At June 30, 2008, we had a total of 55,397 full-time equivalent employees. Approximately 17% of these employees, including all of our pilots, are represented by labor unions. The following table presents certain information concerning the union representation of our active domestic employees as of June 30, 2008.

Employee Group	Approximate Number of Employees Represented	Union		Date on which Collective Bargaining Agreement Becomes Amendable
Delta Pilots	6,590	ALPA		December 31, 2009
Delta Flight Superintendents	182	PAFCA	(1)	January 1, 2010
Comair Pilots	1,434	ALPA		March 2, 2011
Comair Maintenance Employees	528	IAM	(2)	December 31, 2010
Comair Flight Attendants	945	IBT	(3)	December 31, 2010

The table above was not subject to the review procedures of our Independent Registered Public Accounting Firm.

⁽¹⁾ PAFCA—Professional Airline Flight Controllers’ Association

⁽²⁾ IAM—International Association of Machinists and Aerospace Workers

⁽³⁾ IBT—International Brotherhood of Teamsters

In March 2008, the National Mediation Board authorized an election to determine whether to certify the Association of Flight Attendants/Communication Workers of America (“AFA”) as the collective bargaining representative for Delta’s over 13,000 flight attendants. In May 2008, the National Mediation Board announced that a substantial majority of eligible flight attendants rejected AFA representation.

War-Risk Insurance Contingency

As a result of the terrorist attacks on September 11, 2001, aviation insurers significantly reduced the maximum amount of insurance coverage available to commercial air carriers for liability to persons (other than employees or passengers) for claims resulting from acts of terrorism, war or similar events. At the same time, aviation insurers significantly increased the premiums for such coverage and for aviation insurance in general. Since September 24, 2001, the U.S. government has been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground damage) and the aircraft hull. The coverage currently extends through December 31, 2008. The withdrawal of government support of airline war-risk insurance would require us to obtain war-risk insurance coverage commercially, if available. Such commercial insurance could have substantially less desirable coverage than currently provided by the U.S. government, may not be adequate to protect our risk of loss from future acts of terrorism, may result in a material increase to our operating expenses or may not be obtainable at all, resulting in an interruption to our operations.

Fuel Inventory Supply Agreement

We have an agreement with J. Aron & Company (“Aron”), an affiliate of Goldman Sachs & Co., pursuant to which Aron is the exclusive jet fuel supplier for our operations at the Atlanta airport, the Cincinnati airport and the three major airports in the New York City area.

In August 2007, we and Aron amended and restated the agreement effective as of September 15, 2007. As amended, the agreement with Aron is effective through September 30, 2008 and automatically renews for a one year term thereafter unless terminated by either party thirty days prior to September 30, 2008. Upon termination of the agreement, we will be required to purchase, at market prices at the time of termination, all jet fuel inventory that Aron is holding in the storage facilities that support our operations at the Atlanta and Cincinnati airports and all jet fuel inventory that is in transit to these airports as well as to the three major New York City area airports. Our cost to purchase such inventory may be material. At termination of the agreement, Aron will return to us our rights to use the storage facilities in Atlanta and Cincinnati and our allocations in pipeline systems.

Other

We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.

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7. EMPLOYEE BENEFIT PLANS

Net Periodic Cost

Net periodic cost for the three and six months ended June 30, 2008, the two months ended June 30, 2007 and the one month and four months ended April 30, 2007 includes the following components:

	Pension Benefits
	Successor						Predecessor			Successor						Predecessor
(in millions)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007			One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007			Four Months Ended April 30, 2007
Service cost	$	—		$	—		$	—		$	—		$	—		$	—
Interest cost		114			74			36			228			74			145
Expected return on plan assets		(106	)		(70	)		(32	)		(211	)		(70	)		(129	)
Amortization of prior service cost		—			—			—			—			—			—
Recognized net actuarial loss		—			—			5			—			—			19
Settlement gain on termination		—			—			(30	)		—			—			(30	)
Revaluation of liability		—			—			(143	)		—			—			(143	)
Net periodic (benefit) cost	$	8		$	4		$	(164	)	$	17		$	4		$	(138	)
	Other Postretirement Benefits
	Successor						Predecessor			Successor						Predecessor
(in millions)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007			One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007			Four Months Ended April 30, 2007
Service cost	$	2		$	2		$	1		$	4		$	2		$	4
Interest cost		14			10			5			29			10			21
Amortization of prior service benefit		—			—			(8	)		—			—			(31	)
Recognized net actuarial loss		(1	)		—			2			(3	)		—			8
Revaluation of liability		—			—			49			—			—			49
Net periodic cost	$	15		$	12		$	49		$	30		$	12		$	51
	Other Postemployment Benefits
	Successor						Predecessor			Successor						Predecessor
(in millions)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007			One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007			Four Months Ended April 30, 2007
Service cost	$	7		$	5		$	3		$	14		$	5		$	8
Interest cost		32			21			10			63			21			41
Expected return on plan assets		(38	)		(26	)		(13	)		(75	)		(26	)		(51	)
Amortization of prior service benefit		—			—			—			—			—			(2	)
Recognized net actuarial loss		—			—			1			—			—			5
Revaluation of liability		—			—			(273	)		—			—			(273	)
Net periodic (benefit) cost	$	1		$	—		$	(272	)	$	2		$	—		$	(272	)

For additional information about our benefit plans, see Note 10 of the Notes to the Consolidated Financial Statements in our Form 10-K.

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8. COMPREHENSIVE (LOSS) INCOME

Comprehensive (loss) income primarily includes (1) our reported net (loss) income, (2) changes in our unrecognized pension, postretirement and postemployment benefit liabilities, (3) changes in the effective portion of our open fuel hedge contracts which qualify for hedge accounting and (4) changes in our deferred tax asset valuation allowance as a result of items (2) and (3) above.

The following table shows our comprehensive (loss) income for the three and six months ended June 30, 2008, the two months ended June 30, 2007 and the one month and four months ended April 30, 2007:

	Successor					Predecessor			Successor					Predecessor
(in millions)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007		One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007		Four Months Ended April 30, 2007
Net (loss) income	$	(1,044	)	$	164	$	1,428		$	(7,434	)	$	164	$	1,298
Gains on effective portion of our open fuel hedge contracts, net of tax effect		497			5		(8	)		621			5		69
Deferred tax asset valuation allowance		305			3		—			396			3		—
Other		(1	)		—		6			(1	)		—		6
Comprehensive (loss) income	$	(243	)	$	172	$	1,426		$	(6,418	)	$	172	$	1,373

9. RESTRUCTURING AND OTHER RESERVES

In March 2008, we announced two voluntary workforce reduction programs for U.S. non-pilot employees with the intent of reducing planned workforce levels by approximately 2,000 positions. Approximately 4,200 employees elected to participate in these programs, which have been accounted for in accordance with SFAS No. 112, “Employers’ Accounting for Postemployment Benefits—an amendment of Financial Accounting Standards Board Statements No. 5 and 43,” and SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.” We recorded $96 million and $112 million in restructuring and related items on our Consolidated Statement of Operations for the three and six months ended June 30, 2008 in connection with the workforce reduction programs. We expect any additional charges to be incurred in connection with the workforce reduction programs will be immaterial.

The following table shows charges recorded for restructuring and related items for the three and six months ended June 30, 2008 related to (1) severance and related costs under our 2008 voluntary workforce reduction program and (2) facility closures and other costs:

(in millions)	Three Months Ended June 30, 2008		Six Months Ended June 30, 2008
Severance and related costs	$	96	$	112
Facilities and other		6		6
Total	$	102	$	118

The following table shows our restructuring and related items balances as of June 30, 2008, and the activity for the six months then ended related to (1) severance and related costs under our 2008 voluntary workforce reduction programs and (2) facility closures and other costs:

(in millions)	Balance at December 31, 2007		Additional Costs and Expenses		Payments			Balance at June 30, 2008
Severance and related costs	$	—	$	112	$	(11	)	$	101
Facilities and other(1)		3		6		(1	)		8
Total	$	3	$	118	$	(12	)	$	109

⁽¹⁾ The facilities and other balance includes costs related primarily to (1) future lease payments on closed facilities and (2) contract termination fees. During the six months ended June 30, 2008, we recorded a $6 million charge related primarily to the closure of certain facilities.

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10. (LOSS) EARNINGS PER SHARE

We calculate basic (loss) earnings per share by dividing the net (loss) earnings attributable to common shareowners by the weighted average number of common shares outstanding. In accordance with SFAS No. 128, “Earnings per Share,” shares issuable upon the satisfaction of certain conditions pursuant to a contingent stock agreement, such as those contemplated by the Plan of Reorganization, are considered outstanding common shares and included in the computation of basic earnings per share. Accordingly, all 386 million shares contemplated by the Plan of Reorganization to be distributed to holders of allowed general, unsecured claims are included in the calculation of basic (loss) earnings per share for the three and six months ended June 30, 2008 and the two months ended June 30, 2007.

Diluted (loss) earnings per share includes the dilutive effects of stock options and restricted stock. To the extent stock options and restricted stock are anti-dilutive, they are excluded from the calculation of earnings per share. For the three and six months ended June 30, 2008, we excluded from our earnings per share calculations all common stock equivalents because their effect on earnings per share was anti-dilutive. For additional information regarding these shares, see Note 16 of the Notes to the Consolidated Financial Statements in our Form 10-K.

The following table shows our computation of basic and diluted (loss) earnings per share for the three and six months ended June 30, 2008, the two months ended June 30, 2007 and the one month and four months ended April 30, 2007:

	Successor					Predecessor			Successor					Predecessor
(in millions, except per share data)	Three Months Ended June 30, 2008			Two Months Ended June 30, 2007		One Month Ended April 30, 2007			Six Months Ended June 30, 2008			Two Months Ended June 30, 2007		Four Months Ended April 30, 2007
Basic:
Net (loss) income	$	(1,044	)	$	164	$	1,428		$	(7,434	)	$	164	$	1,298
Basic weighted average shares outstanding		395.7			393.6		197.3			395.7			393.6		197.3
Basic (loss) earnings per share	$	(2.64	)	$	0.42	$	7.24		$	(18.79	)	$	0.42	$	6.58
Diluted:
Net (loss) income	$	(1,044	)	$	164	$	1,428		$	(7,434	)	$	164	$	1,298
Gain recognized on the forgiveness of convertible debt		—			—		(216	)		—			—		(216	)
Net (loss) income assuming conversion	$	(1,044	)	$	164	$	1,212		$	(7,434	)	$	164	$	1,082
Basic weighted average shares outstanding		395.7			393.6		197.3			395.7			393.6		197.3
Additional shares assuming:
Restricted shares		—			0.2		—			—			0.2		—
Conversion of 8.0% Convertible Senior Notes		—			—		12.5			—			—		12.5
Conversion of 2 7/8% Convertible Senior Notes		—			—		23.9			—			—		23.9
Weighted average shares outstanding, as adjusted		395.7			393.8		233.7			395.7			393.8		233.7
Dilutive (loss) earnings per share	$	(2.64	)	$	0.42	$	5.19		$	(18.79	)	$	0.42	$	4.63

11. MERGER AND RELATED MATTERS

On April 14, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest whereby Northwest will become a wholly owned subsidiary of Delta. The merger has been approved by the Board of Directors of each company.

Under the terms of the Merger Agreement, each outstanding share of Northwest common stock (including those shares issuable pursuant to Northwest’s plan of reorganization under Chapter 11) will be exchanged for 1.25 shares of Delta common stock. Northwest stock options and other equity awards will generally convert upon completion of the merger into stock options and equity awards with respect to Delta common stock, after giving effect to the exchange ratio. In addition, we have agreed to issue common stock equal to 3.5% of our fully-diluted outstanding shares for Delta pilots and 2.38% of our fully-diluted outstanding shares for Northwest pilots (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to ratification by Delta and Northwest pilots of the tentative combined collective bargaining agreement, described below, and approval by Delta stockholders of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan. We have also announced our intention to issue to U.S. based non-pilot employees of Delta and Northwest shares of our common stock equal to 4% of our fully-diluted outstanding shares (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to shareholder approval of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan.

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Completion of the merger is subject to customary conditions, including approval by holders of common stock of Northwest and Delta and regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the applicable merger control laws of the European Commission. The Merger Agreement contains certain termination rights for both Delta and Northwest. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, Northwest may be required to pay to Delta, or Delta may be required to pay to Northwest, a termination fee of $165 million. We currently target the merger to close by the end of 2008.

Certain contracts, employee benefit arrangements and debt instruments of Delta and Northwest contain change in control provisions that may be triggered by the merger, resulting in changes to the terms or settlement amounts of the contracts, arrangements or instruments.

We have also reached a tentative combined collective bargaining agreement that would cover Delta’s pilots and Northwest’s pilots upon the closing of the merger. The tentative combined agreement is subject to separate ratification by Delta and Northwest pilots, would become effective on the closing of the merger and would become amendable on December 31, 2012. We cannot predict the outcome of the separate ratification votes by Delta or Northwest pilots. The Delta Master Executive Council (the “Delta MEC”), the governing body of the Delta unit of ALPA, the Northwest Master Executive Council (the “Northwest MEC”), the governing body of the Northwest Airlines, Inc. unit of ALPA, and ALPA have also agreed to adopt and be bound by a Process Agreement relating to the determination of an integrated seniority list, which would become effective upon the closing of the merger, for the combined Delta and Northwest pilot groups. The parties to the Process Agreement may not revise, waive any material right under, or terminate the Process Agreement without our consent.

If the stockholders of Delta do not approve an amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan, the Delta MEC and the Northwest MEC will separately have the ability, prior to the closing of the merger, to terminate the transaction framework agreement that we have entered into with the Delta MEC, the Northwest MEC and ALPA. Such a termination would cause the transaction framework agreement and the combined collective bargaining agreement to become void. If those agreements become void, we cannot assure you when or whether we could reach new agreements with the pilot groups.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Background

We are a major air carrier that provides scheduled air transportation for passengers and cargo throughout the United States (“U.S.”) and around the world. We offer service, including Delta Connection carrier service, to 327 destinations in 62 countries in July 2008. We are a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including our SkyTeam and worldwide codeshare partners, we offer flights to 499 worldwide destinations in 105 countries in July 2008.

On April 30, 2007 (the “Effective Date”), we and substantially all of our subsidiaries (collectively, the “Debtors”) emerged from bankruptcy as a competitive airline with a global network. Upon emergence from Chapter 11, we adopted fresh start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”). The adoption of fresh start reporting resulted in our becoming a new entity for financial reporting purposes. Accordingly, the Condensed Consolidated Financial Statements on or after May 1, 2007 are not comparable to the Condensed Consolidated Financial Statements prior to that date.

References in this Form 10-Q to “Successor” refer to Delta on or after May 1, 2007, after giving effect to (1) the cancellation of Delta common stock issued prior to the Effective Date, (2) the issuance of new Delta common stock and certain debt securities in accordance with the Debtors’ Joint Plan of Reorganization (the “Plan of Reorganization”) and (3) the application of fresh start reporting. References to “Predecessor” refer to Delta prior to May 1, 2007.

Combined Quarterly Financial Results of the Predecessor and Successor

Due to our adoption of fresh start reporting on April 30, 2007, the accompanying Consolidated Statements of Operations include the results of operations for (1) the one month and four months ended April 30, 2007 of the Predecessor and (2) the two months ended June 30, 2007 of the Successor.

For purposes of management’s discussion and analysis of the results of operations in this Form 10-Q, we combined the results of operations for (1) the one month ended April 30, 2007 of the Predecessor with the two months ended June 30, 2007 of the Successor and (2) the four months April 30, 2007 of the Predecessor with the two months ended June 30, 2007 of the Successor. We then compare the combined results of operations for the three and six months ended June 30, 2007 with the corresponding periods in the current year.

We believe the combined results of operations for the three and six months ended June 30, 2007 provide management and investors with a more meaningful perspective on Delta’s financial and operational performance than if we did not combine the results of operations of the Predecessor and the Successor in this manner. Similarly, we combine the financial results of the Predecessor and the Successor when discussing our sources and uses of cash for the six months ended June 30, 2007.

Recent Developments

Merger

On April 14, 2008, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northwest Airlines Corporation (“Northwest”) whereby Northwest will become a wholly owned subsidiary of Delta. The merger better positions us to manage through economic cycles and volatile fuel prices, to invest in our fleet and to improve services for customers. We believe the merger will generate approximately $2 billion in annual revenue and cost synergies by 2012 from more effective aircraft utilization, a more comprehensive and diversified route system and cost synergies from reduced overhead and improved operational efficiency. The merger has been approved by the Board of Directors of each company.

Under the terms of the Merger Agreement, each outstanding share of Northwest common stock (including those shares issuable pursuant to Northwest’s plan of reorganization under Chapter 11) will be exchanged for 1.25 shares of Delta common stock. Northwest stock options and other equity awards will generally convert upon completion of the merger into stock options and equity awards with respect to Delta common stock, after giving effect to the exchange ratio. In addition, we have agreed to issue common stock equal to 3.5% of our fully-diluted outstanding shares for Delta pilots and 2.38% of our fully-diluted outstanding shares for Northwest pilots (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to ratification by Delta and Northwest pilots of the tentative combined collective bargaining agreement, described below, and approval by Delta stockholders of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan. We have also announced our intention to issue to U.S. based non-pilot employees of Delta and Northwest shares of our common stock equal to 4% of our fully-diluted shares (after giving effect to the shares issued in connection with the merger), effective on the closing of the merger and subject to stockholder approval of the amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan.

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Completion of the merger is subject to customary conditions, including approval by holders of common stock of Northwest and Delta and regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the applicable merger control laws of the European Commission. The Merger Agreement contains certain termination rights for both Delta and Northwest. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, Northwest may be required to pay to Delta, or Delta may be required to pay to Northwest, a termination fee of $165 million. We currently target the merger to close by the end of 2008.

ALPA Matters

In connection with the Merger Agreement, we reached an agreement with the Air Line Pilots Association, International (“ALPA”) to modify the existing collective bargaining agreement covering Delta’s pilots, which was ratified by Delta pilots. Subsequently, we reached a tentative combined collective bargaining agreement that would cover Delta’s pilots and Northwest’s pilots upon the closing of the merger. The tentative combined agreement is subject to separate ratification by Delta and Northwest pilots, would become effective on the closing of the merger and would become amendable on December 31, 2012. The Delta Master Executive Council (the “Delta MEC”), the governing body of the Delta unit of ALPA, and the Northwest Master Executive Council (the “Northwest MEC”), the governing body of the Northwest Airlines, Inc. unit of ALPA, have each agreed to recommend that Delta and Northwest pilots, respectively, ratify the tentative combined agreement and use their reasonable best efforts to cause a ratification vote by August 25, 2008. We cannot predict the outcome of the ratification vote by Delta or Northwest pilots. The Delta MEC, the Northwest MEC and ALPA have also agreed to adopt and be bound by a Process Agreement relating to the determination of an integrated seniority list, which would become effective upon the closing of the merger, for the combined Delta and Northwest pilot groups. The parties to the Process Agreement may not revise, waive any material right under, or terminate the Process Agreement without our consent.

If the stockholders of Delta do not approve an amendment to the Delta 2007 Performance Compensation Plan to increase the number of shares of Delta common stock issuable under that plan, the Delta MEC and the Northwest MEC will separately have the ability, prior to the closing of the merger, to terminate the transaction framework agreement that we have entered into with the Delta MEC, the Northwest MEC and ALPA. Such a termination would cause the transaction framework agreement and the combined collective bargaining agreement to become void. If those agreements become void, we cannot assure you when or whether we could reach new agreements with the pilot groups.

Antitrust Immunity

On May 23, 2008, the U.S. Department of Transportation issued a final order granting antitrust immunity for alliance agreements allowing coordination of pricing, schedules, sales and other marketing activities in transatlantic markets between Delta, Northwest, Air France, KLM, Alitalia and CSA Czech Airlines. The order, effectively combines the preexisting antitrust immunity between (1) Northwest and KLM and (2) Delta, Air France, Alitalia, and CSA Czech Airlines in the transatlantic markets. The grant of immunity is subject to a number of conditions, including the implementation of a planned four-way transatlantic joint venture between Delta, Air France, Northwest and KLM, within 18 months of the date of the final order.

Overview of June 2008 Quarter Results

In the June 2008 quarter, we recorded a consolidated net loss of $1.0 billion, which includes a $1.2 billion non-cash charge ($1.1 billion after tax) from an impairment of goodwill and other intangible assets.

Business Initiatives

The rapid increase in fuel costs to record high levels (crude oil prices have increased from an average of $68 per barrel in June 2007 to an average of $134 per barrel in June 2008) and the weakening U.S. economy continue to place significant pressure on the airline industry and our business. Fuel prices for the June 2008 quarter, including those of our contract carriers, accounted for over $1.0 billion of the increase in total operating expense (offset by $313 million in effective fuel hedges) as compared to the June 2007 quarter.

In March 2008, we announced we had recalibrated our 2008 business plan with a focus on preserving liquidity in light of the significant increase in crude oil prices. During the June 2008 quarter, as fuel prices continued to rise, we reevaluated our flight schedule, targeting additional reductions in capacity. We now expect system capacity for the second half of 2008 to be down 4% compared to 2007, with domestic capacity down 13% and international capacity up 14%. We have also implemented revenue and productivity initiatives as well as continued to build our fuel hedging portfolio to help address high fuel costs. As a result of our actions, we mitigated nearly 80% of the impact of higher fuel prices during the June 2008 quarter.

Results of Operations—June 2008 and 2007 Quarters

Net (Loss) Income

We had a consolidated net loss of $1.0 billion for the June 2008 quarter and consolidated net income of $1.6 billion for the June 2007 quarter. The results for the June 2008 quarter reflect (1) a $1.2 billion non-cash charge ($1.1 billion after tax) from an impairment of goodwill and other intangible assets, (2) the impact of increased jet fuel prices to record high levels and (3) a weakening domestic economy. The June 2007 quarter results include a $1.3 billion gain to reorganization items, net, primarily reflecting a $2.1 billion gain in connection with our emergence from bankruptcy.

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Operating Revenue

	Successor		Combined
(in millions)	Three Months Ended June 30, 2008		Three Months Ended June 30, 2007		Increase (Decrease)		% Increase (Decrease)
Operating Revenue:
Passenger:
Mainline	$	3,627	$	3,384	$	243	7	%
Regional affiliates		1,143		1,109		34	3	%
Total passenger revenue		4,770		4,493		277	6	%
Cargo		160		118		42	36	%
Other, net		569		392		177	45	%
Total operating revenue	$	5,499	$	5,003	$	496	10	%

Operating revenue totaled $5.5 billion for the June 2008 quarter, a $496 million, or 10%, increase compared to the June 2007 quarter. Passenger revenue increased 6% on a 2% increase in available seat miles (“ASMs”), or capacity, and a 0.5 point increase in load factor. The increase in passenger revenue reflects a rise of 4% and 5% in passenger mile yield and passenger revenue per available seat mile (“PRASM”), respectively. Mainline passenger revenue increased primarily due to (1) our increased service to international destinations, (2) yield management and (3) increased SkyMiles revenue, including changes made to the accounting for our SkyMiles program upon our adoption of fresh start reporting. Passenger revenue of regional affiliates increased primarily due to higher yield and a higher load factor, despite a 2% decrease in RPMs on a 3% decline in capacity. Other, net revenue increased primarily due to (1) increased administrative service charges and baggage handling fees, (2) growth in aircraft maintenance and repair services provided to third parties and (3) higher SkyMiles revenue primarily associated with an increase in fees related to the SkyMiles program.

	Successor		Increase (Decrease) Three Months Ended June 30, 2008 vs. 2007
(in millions)	Three Months Ended June 30, 2008		Passenger Revenue		RPMs		ASMs		Passenger Mile Yield		PRASM		Load Factor
Passenger Revenue:
North America	$	3,163	(1	)%	(5	)%	(6	)%	4	%	5	%	0.7pts
International		1,583	26	%	17	%	16	%	7	%	8	%	0.7pts
Charter		24	(3	)%	(26	)%	—		31	%	(3	)%	(9.9)pts
Total passenger revenue	$	4,770	6	%	2	%	2	%	4	%	5	%	0.5pts

North American Passenger Revenue. North American passenger revenue decreased by $45 million, or 1%, driven by a 5% decline in RPMs on a 6% decline in capacity. The passenger mile yield increased 4%. The decline in passenger revenue reflects the weakening domestic economy and the continued restructuring of our route network to reduce less productive short haul domestic flights and reallocate widebody aircraft to international routes.

International Passenger Revenue. International passenger revenue increased $323 million, or 26%, generated by a 17% increase in RPMs on a 16% increase in capacity and an 8% increase in PRASM. The passenger mile yield increased 7%. These results reflect increases in service to international destinations, primarily in the Atlantic and Latin American markets, from the restructuring of our route network, combined with pricing initiatives implemented in response to the increasing cost of fuel. Our mix of domestic versus international capacity was 62% and 38%, respectively, in the three months ended June 30, 2008, compared to 66% and 34%, respectively, for the three months ended June 30, 2007.

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Operating Expense

	Successor		Combined
(in millions)	Three Months Ended June 30, 2008		Three Months Ended June 30, 2007		Increase (Decrease)			% Increase (Decrease)
Operating Expense:
Aircraft fuel and related taxes	$	1,678	$	1,112	$	566		51	%
Salaries and related costs		1,092		1,039		53		5	%
Contract carrier arrangements		931		769		162		21	%
Depreciation and amortization		302		288		14		5	%
Aircraft maintenance materials and outside repairs		295		247		48		19	%
Contracted services		257		243		14		6	%
Passenger commissions and other selling expenses		248		253		(5	)	(2	)%
Landing fees and other rents		185		182		3		2	%
Passenger service		105		85		20		24	%
Aircraft rent		67		56		11		20	%
Impairment of goodwill		839		—		839		NM
Impairment of intangible assets		357		—		357		NM
Restructuring and related items		104		—		104		NM
Profit sharing		—		79		(79	)	NM
Other		126		160		(34	)	(21	)%
Total operating expense	$	6,586	$	4,513	$	2,073		46	%

Operating expense was $6.6 billion for the June 2008 quarter, a $2.1 billion, or 46%, increase compared to the June 2007 quarter. Operating expense increased primarily due to (1) a $1.2 billion non-cash charge from an impairment of goodwill and other intangible assets, (2) higher fuel prices, including those of our contract carriers, which increased operating expense by more than $1.0 billion (partially offset by $313 million in fuel hedge gains), and (3) increased capacity. Operating capacity increased 2% to 38.7 billion ASMs due mainly to increases in service to international destinations, primarily in the Atlantic and Latin American markets and from the restructuring of our route network.

Aircraft fuel and related taxes. Aircraft fuel and related taxes increased primarily due to higher average fuel prices. These increases were partially offset by gains on our fuel hedge derivatives. Fuel prices averaged $3.13 per gallon, including fuel hedge gains of $313 million, for the June 2008 quarter, compared to $2.09 per gallon, including fuel hedge gains of $14 million, for the June 2007 quarter.

Salaries and related costs. The increase in salaries and related costs reflects (1) a 4% increase in average Mainline headcount (primarily incurred prior to the departures under the voluntary workforce reduction programs) due to our assumption of Atlantic Southeast Airlines, Inc. (“ASA”) ramp operations in Atlanta and the hiring of pilots and flight attendants to staff our increased international flights, (2) increases in group insurance rates and (3) expense associated with share-based compensation.

Contract carrier arrangements. Contract carrier arrangements expense increased primarily due to higher average fuel prices and an increase in passenger handling fees from higher contract rates. Fuel prices for our contract carriers averaged $3.85 per gallon for the June 2008 quarter, compared to $2.24 per gallon for the June 2007 quarter. These increases were partially offset by an adjustment associated with reimbursement for maintenance and crew related interrupted operations.

Aircraft maintenance materials and outside repairs. The increase in aircraft maintenance materials and outside repairs is primarily due to the cost of sales associated with growth in our maintenance and repair business.

Impairment of goodwill. During the March 2008 quarter, we experienced a significant decline in market capitalization driven primarily by record fuel prices and overall airline industry conditions. In addition, the announcement of our intention to merge with Northwest established a stock exchange ratio based on the relative valuation of Delta and Northwest. As a result of these indicators, we determined that goodwill was impaired and recorded a non-cash charge of $6.1 billion based on a preliminary assessment. We finalized the second step of the impairment test during the June 2008 quarter and recorded an additional non-cash charge of $839 million for a total impairment charge of $6.9 billion.

Impairment of intangible assets. In addition to the goodwill impairment charge, we recorded a non-cash charge of $357 million to reduce the carrying value of certain intangible assets based on their revised estimated fair values.

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Restructuring and related items. In March 2008, we announced two voluntary workforce reduction programs for U.S. non-pilot employees. We recorded $96 million in restructuring and related charges for the June 2008 quarter in connection with these programs. In addition, we recorded $8 million in charges related to the closure of certain facilities and merger-related expenses.

Other. The decrease in other operating expense is primarily due to (1) a gain on sales of aircraft and (2) impairment charges recorded in 2007 on flight simulators.

Operating (Loss) Income and Operating Margin

We reported an operating loss of $1.1 billion and operating income of $490 million for the June 2008 and 2007 quarters, respectively. Operating margin, which is the ratio of operating (loss) income to operating revenues, was (20%) and 10% for the June 2008 and 2007 quarters, respectively.

Other (Expense) Income

Other expense, net for the June 2008 quarter was $76 million, compared to $138 million for the June 2007 quarter. This change is substantially attributable to (1) a $41 million, or 23%, decrease in interest expense primarily due to the repayment in 2007 of our debtor-in-possession financing facilities and other higher floating rate debt in connection with our emergence from Chapter 11 and the amortization of premiums associated with the revaluation of our debt and capital lease obligations in connection with our adoption of fresh start reporting, partially offset by interest expense on incremental borrowings and (2) a $33 million increase to miscellaneous, net associated with marking our fuel hedge derivatives to fair value. These improvements were partially offset by a $12 million decrease to interest income primarily due to lower interest rates.

Reorganization Items, Net

Reorganization items, net totaled a $1.3 billion gain for the June 2007 quarter, primarily consisting of the following:

• Emergence gain. A net $2.1 billion gain due to our emergence from bankruptcy, comprised of (1) a $4.4 billion gain related to the discharge of liabilities subject to compromise in connection with the settlement of claims, (2) a $2.6 billion charge associated with the revaluation of our SkyMiles frequent flyer obligation and (3) a $238 million gain from the revaluation of our remaining assets and liabilities to fair value. For additional information regarding this gain, see Note 1 of the Notes to the Condensed Consolidated Financial Statements.

• Aircraft financing renegotiations and rejections. $438 million of estimated claims primarily associated with the restructuring of the financing arrangements of 127 aircraft and adjustments to prior claims estimates.

• Emergence compensation. In accordance with the Plan of Reorganization, we made $130 million in lump-sum cash payments to approximately 39,000 eligible non-contract, non-management employees. We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan of Reorganization, of approximately 14 million shares of common stock to those employees.

• Facility leases. A net $80 million charge from an allowed general, unsecured claim in connection with the settlement relating to the restructuring of certain of our lease and other obligations at the Cincinnati-Northern Kentucky International Airport (“CVG”).

Income Taxes

We recorded an income tax benefit of $119 million for the June 2008 quarter as a result of the impairment of our indefinite-lived intangible assets. The impairment of goodwill did not result in an income tax benefit as goodwill is not deductible for income tax purposes. We did not record an income tax benefit for the remainder of our June 2008 quarter loss. The deferred tax asset resulting from such net operating losses is fully reserved by a valuation allowance.

For the June 2007 quarter, we recorded an income tax provision totaling $99 million. We have recorded a full valuation allowance against our net deferred tax assets, excluding the effect of the deferred tax liabilities that are unable to be used as a source of income against these deferred tax assets, based on our belief that it is more likely than not that the asset will not be realized in the future. We will continue to assess the need for a full valuation allowance in future periods. In accordance with SOP 90-7, the reduction of the valuation allowance associated with the realization of pre-emergence deferred tax assets will sequentially reduce the value of our recorded goodwill followed by other indefinite-lived intangible assets until the net carrying cost of these assets is zero. Accordingly, during the June 2007 quarter, we reduced goodwill by $103 million with respect to the realization of pre-emergence deferred tax assets.

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Combined Results of Operations — Six Months Ended June 2008 and 2007

Net (Loss) Income

We had a consolidated net loss of $7.4 billion for the six months ended June 30, 2008, and consolidated net income of $1.5 billion for the six months ended June 30, 2007. The results for the six months ended June 30, 2008 reflect (1) a $7.3 billion non-cash charge ($7.2 billion after tax) from an impairment of goodwill and other intangible assets, (2) the impact of increased jet fuel prices to record high levels and (3) a weakening domestic economy. The results for the six months ended June 30, 2007 include a $1.2 billion gain to reorganization items, net, primarily reflecting a $2.1 billion gain in connection with our emergence from bankruptcy.

Operating Revenue

	Successor		Combined
(in millions)	Six Months Ended June 30, 2008		Six Months Ended June 30, 2007		Increase (Decrease)		% Increase (Decrease)
Operating Revenue:
Passenger:
Mainline	$	6,688	$	6,167	$	521	8	%
Regional affiliates		2,182		2,056		126	6	%
Total passenger revenue		8,870		8,223		647	8	%
Cargo		294		230		64	28	%
Other, net		1,101		791		310	39	%
Total operating revenue	$	10,265	$	9,244	$	1,021	11	%

Operating revenue totaled $10.3 billion for the six months ended June 30, 2008, a $1.0 billion, or 11%, increase compared to the six months ended June 30, 2007. Passenger revenue increased 8% on a 3% increase in capacity and 0.7 point increase in load factor. The increase in passenger revenue is primarily due to a rise of 5% and 6% in passenger mile yield and PRASM, respectively. Mainline passenger revenue increased primarily due (1) our increased service to international destinations, (2) yield management and (3) increased SkyMiles revenue, including changes made to the accounting for our SkyMiles program upon our adoption of fresh start reporting. Passenger revenue of regional affiliates increased primarily due to higher yield and a higher load factor, which resulted in a 7% increase in PRASM on a 1% decline in capacity. Other, net revenue increased primarily due to (1) increased administrative service charges and baggage handling fees, (2) growth in aircraft maintenance and repair services provided to third parties and (3) higher SkyMiles revenue primarily associated with an increase in fees related to the SkyMiles program and increased purchases of SkyMiles by participating companies.

	Successor		Increase (Decrease) Six Months Ended June 30, 2008 vs. 2007
(in millions)	Six Months Ended June 30, 2008		Passenger Revenue		RPMs		ASMs		Passenger Mile Yield		PRASM		Load Factor
Passenger Revenue:
North America	$	6,084	1	%	(3	)%	(4	)%	4	%	6	%	0.9pts
International		2,729	25	%	15	%	14	%	9	%	10	%	0.7pts
Charter		57	13	%	11	%	10	%	1	%	3	%	0.5pts
Total passenger revenue	$	8,870	8	%	3	%	2	%	5	%	6	%	0.7pts

North American Passenger Revenue. North American passenger revenue increased $88 million, or 1%, driven by a 0.9 point increase in load factor and 6% increase in PRASM on a 4% decline in capacity. The passenger mile yield increased 4%. The increases in passenger revenue and PRASM reflect the continued restructuring of our route network to reduce less productive short haul domestic flights and reallocate widebody aircraft to international routes.

International Passenger Revenue. International passenger revenue increased $553 million, or 25%, generated by a 15% increase in RPMs from a 14% increase in capacity. The passenger mile yield and PRASM increased 9% and 10%, respectively. These results reflect increases in service to international destinations, primarily in the Atlantic and Latin American markets, from the restructuring of our route network, combined with pricing initiatives implemented in response to the increasing cost of fuel. Our mix of domestic versus international capacity was 64% and 36%, respectively, in the six months ended June 30, 2008, compared to 68% and 32%, respectively, for the six months ended June 30, 2007.

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Operating Expense

	Successor		Combined
(in millions)	Six Months Ended June 30, 2008		Six Months Ended June 30, 2007		Increase (Decrease)			% Increase (Decrease)
Operating Expense:
Aircraft fuel and related taxes	$	3,100	$	2,060	$	1,040		50	%
Salaries and related costs		2,183		2,010		173		9	%
Contract carrier arrangements		1,827		1,486		341		23	%
Depreciation and amortization		599		579		20		3	%
Aircraft maintenance materials and outside repairs		563		485		78		16	%
Contracted services		511		486		25		5	%
Passenger commissions and other selling expenses		473		473		—		—	%
Landing fees and other rents		364		372		(8	)	(2	)%
Passenger service		189		156		33		21	%
Aircraft rent		131		126		5		4	%
Impairment of goodwill		6,939		—		6,939		NM
Impairment of intangible assets		357		—		357		NM
Restructuring and related items		120		—		120		NM
Profit sharing		—		79		(79	)	NM
Other		257		287		(30	)	10	%
Total operating expense	$	17,613	$	8,599	$	9,014		105	%

Operating expense was $17.6 billion for the six months ended June 30, 2008, a $9.0 billion, or 105%, increase compared to the six months ended June 30, 2007. As discussed below, the increase in operating expense was primarily due to (1) a $7.3 billion non-cash charge from an impairment of goodwill and other intangible assets, (2) higher fuel prices, including those of our contract carriers, which increased operating expense by more than $1.7 billion (partially offset by $354 million in fuel hedge gains), and (3) increased capacity. Operating capacity increased 2% to 74.8 billion ASMs primarily due to higher contract carrier flying from our business plan initiatives to right-size capacity.

Aircraft fuel and related taxes. Aircraft fuel and related taxes increased primarily due to higher average fuel prices. These increases were partially offset by gains on our fuel hedge derivatives. Fuel prices averaged $2.99 per gallon, including fuel hedge gains of $354 million, for the six months ended June 30, 2008, compared to $2.02 per gallon, including fuel hedge losses of $4 million, for the six months ended June 30, 2007.

Salaries and related costs. The increase in salaries and related costs reflects (1) a 6% increase in average Mainline headcount (primarily incurred prior to the departures under the workforce reduction programs) due to our assumption of ASA ramp operations in Atlanta and the hiring of pilots and flight attendants to staff our increased international flights, (2) increases in group insurance rates and (3) expense associated with share-based compensation.

Contract carrier arrangements. Contract carrier arrangements expense increased primarily due to higher average fuel prices and an increase in passenger handling fees from higher contract rates. Fuel prices for our contract carriers averaged $3.49 per gallon for the six months ended June 30, 2008, compared to $2.07 per gallon for the six months ended June 30, 2007.

Aircraft maintenance materials and outside repairs. The increase in aircraft maintenance materials and outside repairs is primarily due to the cost of sales associated with growth in our maintenance and repair business.

Passenger Service. The increase in passenger service is primarily due to the increased cost of catering to international passengers and upgrades in our Business Elite cabins.

Impairment of goodwill. During the March 2008 quarter, we experienced a significant decline in market capitalization driven primarily by record fuel prices and overall airline industry conditions. In addition, the announcement of our intention to merge with Northwest established a stock exchange ratio based on the relative valuation of Delta and Northwest. As a result of these indicators, we determined that goodwill was impaired and recorded a non-cash charge of $6.9 billion.

Impairment of intangible assets. In addition to the goodwill impairment charge, we recorded a non-cash charge of $357 million to reduce the carrying value of certain intangible assets based on their revised estimated fair values.

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Restructuring and related items. In March 2008, we announced two voluntary workforce reduction programs for U.S. non-pilot employees. We recorded $112 million in restructuring and related charges for the six months ended June 30, 2008 in connection with these programs. In addition, we recorded $8 million in charges related to the closure of certain facilities and merger-related expenses.

Profit sharing. Our broad-based employee profit sharing plan provides that, for each year in which we have an annual pre-tax profit (as defined), we will pay at least 15% of that profit to eligible employees. Based on our pre-tax earnings for 2007, we accrued $79 million under the profit sharing plan. No accrual has been recorded for 2008.

Other. The decrease in other operating expense is primarily due to (1) credits for services provided for ASA ramp operations, (2) a gain on sales of aircraft and (3) impairment charges recorded in 2007 on flight simulators. These decreases were partially offset by increased navigation charges from our increased international operations and a prior year frequent flyer liability benefit.

Operating (Loss) Income and Operating Margin

We reported an operating loss of $7.3 billion for the six months ended June 30, 2008 and operating income of $645 million for the six months ended June 30, 2007. Operating margin, which is the ratio of operating income (loss) to operating revenues, was (72)% and 7% for the six months ended June 30, 2008 and 2007, respectively.

Other (Expense) Income

Other expense, net for the six months ended June 30, 2008 was $205 million, compared to $299 million for the six months ended June 30, 2007. This change is substantially attributable to a 25%, or $94 million, decrease in interest expense primarily due to the repayment of our debtor-in-possession financing facilities and other higher floating rate debt in connection with our emergence from Chapter 11 and the amortization of premiums associated with the revaluation of our debt and capital lease obligations in connection with our adoption of fresh start reporting, partially offset by interest expense on incremental borrowings.

Reorganization Items, Net

Reorganization items, net totaled a $1.2 billion gain for the six months ended June 30, 2007, primarily consisting of the following:

• Emergence gain. A net $2.1 billion gain due to our emergence from bankruptcy. For additional information regarding this gain, see “Results of Operations - - June 2008 and 2007 Quarters - Reorganization Items, Net” above.

• Aircraft financing renegotiations and rejections. $440 million of estimated claims primarily associated with the restructuring of the financing arrangements for 143 aircraft and adjustments to prior claims estimates.

• Contract carrier agreements. A net charge of $163 million in connection with amendments to certain contract carrier agreements.

• Emergence compensation. In accordance with the Plan of Reorganization, we made $130 million in lump-sum cash payments to approximately 39,000 eligible non-contract, non-management employees. We also recorded an additional charge of $32 million related to our portion of payroll related taxes associated with the issuance, as contemplated by the Plan of Reorganization, of approximately 14 million shares of common stock to those employees.

• Pilot collective bargaining agreement. An $83 million allowed general, unsecured claim in connection with Comair’s agreement with ALPA to reduce Comair’s pilot labor costs.

• Facility leases. A net $43 million gain, which primarily reflects (1) a $126 million net gain related to our settlement agreement with the Massachusetts Port Authority offset by (2) a net $80 million charge from an allowed general, unsecured claim in connection with the settlement relating to the restructuring of certain of our lease and other obligations at CVG.

Income Taxes

We recorded an income tax benefit of $119 million for the six months ended June 30, 2008 as a result of the impairment of our indefinite-lived intangible assets. The impairment of goodwill did not result in an income tax benefit as goodwill is not deductible for income tax purposes. We did not record an income tax benefit for the remainder of our loss for the six months ended June 30, 2008. The deferred tax asset resulting from such net operating losses is fully reserved by a valuation allowance.

For the six months ended June 30, 2007, we recorded an income tax provision totaling $99 million. We have recorded a full valuation allowance against our net deferred tax assets, excluding the effect of the deferred tax liabilities that are unable to be used as a source of income against these deferred tax assets, based on our belief that it is more likely than not that the asset will not be realized in the future. We will continue to assess the need for a full valuation allowance in future periods. In accordance with SOP 90-7, the reduction of the valuation allowance associated with the realization of pre-emergence deferred tax assets will sequentially

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reduce the value of our recorded goodwill followed by other indefinite-lived intangible assets until the net carrying cost of these assets is zero. Accordingly, during the six months ended June 30, 2007, we reduced goodwill by $103 million with respect to realization of pre-emergence deferred tax assets.

Operating Statistics

The following table sets forth our operating statistics for the three and six months ended June 30, 2008 and 2007.

	Successor			Combined			Successor			Combined
	Three Months Ended June 30, 2008			Three Months Ended June 30, 2007			Six Months Ended June 30, 2008			Six Months Ended June 30, 2007
Consolidated Combined:
RPMs (millions) (1)		32,269			31,578			60,473			58,790
ASMs (millions) (1)		38,736			38,127			74,827			73,407
Passenger Mile Yield (1)		14.78	¢		14.23	¢		14.67	¢		13.99	¢
PRASM (1)		12.31	¢		11.78	¢		11.85	¢		11.20	¢
Operating Cost Per Available Seat Mile (1) (2)		17.00	¢		11.84	¢		23.54	¢		11.71	¢
Passenger Load Factor (1)		83.3	%		82.8	%		80.8	%		80.1	%
Fuel Gallons Consumed (millions)		535			531			1,035			1,022
Average Price Per Fuel Gallon, Net of Hedging activity	$	3.13		$	2.09		$	2.99		$	2.02
Number of Aircraft in Fleet, End of Period		579			573			579			573
Full-Time Equivalent Employees, End of Period		55,397			55,542			55,397			55,542
Mainline:
RPMs (millions)		27,558			26,776			51,353			49,769
ASMs (millions)		32,902			32,130			63,172			61,684
Operating Cost Per Available Seat Mile		16.10	¢		10.69	¢		23.85	¢		10.53	¢
Number of Aircraft in Fleet, End of Period		450			440			450			440

⁽¹⁾ Includes the operations under contract carrier agreements with unaffiliated regional air carriers:

• ASA, SkyWest Airlines, Inc., Chautauqua Airlines, Inc., Freedom Airlines, Inc. and Shuttle America Corporation for all periods presented;

• ExpressJet for the three and six months ended June 30, 2008 and from June 1 to June 30, 2007; and

• Pinnacle for the three and six months ended June 30, 2008.

⁽²⁾ Includes the operations of our ancillary businesses, Delta TechOps, which provides aircraft maintenance and repair to aviation and airline customers, and Delta Global Services, LLC, which provides general and aviation services, training and technical services and staffing to airlines.

For additional information about our contract carrier agreements, see Note 6 of the Notes to the Condensed Consolidated Financial Statements.

Financial Condition and Liquidity

We expect to meet our cash needs for 2008 from cash flows from operations, cash and cash equivalents and short-term investments and financing arrangements. We also have an undrawn $1.0 billion revolving credit facility that is a part of our senior secured exit financing facility. Our cash and cash equivalents and short-term investments were $3.3 billion at June 30, 2008, compared to $3.4 billion at June 30, 2007.

Significant Liquidity Events

Significant liquidity events during the six months ended June 30, 2008 are as follows:

• As of June 30, 2008, our open fuel hedge contracts had an estimated fair value gain of $1.2 billion. In accordance with our fuel hedge agreements, (1) we may require counterparties to fund the margin associated with our gain position on fuel hedge contracts, and (2) counterparties may require us to fund the margin associated with our loss position on these contracts. At June 30, 2008, we held $973 million of fuel hedge margin from counterparties, $671 million of which is recorded in cash and cash equivalents and $302 million of which is recorded in restricted cash on our Consolidated Balance Sheet. At June 30, 2008, we were not required to fund any fuel hedge margin with counterparties.

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• In February 2008, we entered into a facility to refinance debt that matured in January 2008 and finance two B-777-200LR aircraft deliveries in the March 2008 quarter. Borrowings under this facility are secured by certain aircraft, including the two B-777-200LR aircraft described above, that we own. At June 30 2008, total borrowings under this facility were $518 million. Our obligations under this facility will be paid in installments through February 20, 2020.

• In December 2007, we entered into a facility to borrow up to $233 million to finance certain pre-delivery payments payable by us to The Boeing Company (“Boeing”) for future deliveries of 10 B-737-700 aircraft and eight B-777-200LR aircraft. During the six months ended June 30, 2008, we borrowed $47 million under this facility, net of repayments by us upon the delivery of covered aircraft. As of June 30, 2008, $203 million of borrowings were outstanding under this facility.

• In September 2007, we and our wholly owned subsidiary, Comair, each entered into separate agreements to borrow up to $290 million with respect to future deliveries of CRJ-900 aircraft. We guarantee payment on behalf of Comair. Our obligations under these debt agreements are secured by the underlying aircraft. A separate loan for each CRJ-900 aircraft is issued upon delivery of that aircraft to us. Our obligations under these agreements will be paid in installments over 15-years after delivery. The loans under these agreements will have various maturity dates and bear interest at a floating rate based on LIBOR plus a margin. As of June 30, 2008, a total of $397 million of borrowings were outstanding under these agreements.

Sources and Uses of Cash

Cash flows from operating activities

Cash provided by operating activities was $1.3 billion and $815 million for the six months ended June 30, 2008 and 2007, respectively. Cash provided by operating activities was higher for the six months ended June 30, 2008 compared to the six months ended June 30, 2007 primarily due to (1) a $970 million decrease in short-term investments primarily from sales of auction rate securities, (2) $671 million of unrestricted fuel hedge margin we received from counterparties related to open fuel hedge contracts, (3) a $303 million reduction in restricted cash that had been set aside as collateral by credit card processors in 2007 and (4) a $195 million increase in advance ticket sales. These increases were partially offset by (1) an increase in fuel payments from the impact of record high fuel prices, as discussed above, (2) the payment of $175 million in premiums for fuel hedge derivatives entered into during 2008, (3) the payment of $158 million under our broad-based employee profit sharing plan and (4) a $127 million increase in accounts receivable associated with advance ticket sales and the timing of settlements of these receivables.

Cash flows from investing activities

Cash used in investing activities totaled $809 million and $153 million for the six months ended June 30, 2008 and 2007, respectively. Cash used in investing activities was higher for the six months ended June 30, 2008 compared to the six months ended June 30, 2007 primarily due to (1) an increase in investment of $537 million for flight equipment and advanced payments for aircraft commitments and $41 million for ground property and equipment and (2) a $108 million reduction in the amount of cash released from restriction. These increases were partially offset by $56 million in proceeds from the sale of aircraft and other flight equipment.

Cash flows from financing activities

Cash provided by financing activities totaled $128 million for the six months ended June 30, 2008, compared to cash used in financing activities of $866 million for the six months ended June 30, 2007. Cash provided by financing activities for the six months ended June 30, 2008 primarily reflects $848 million in proceeds from aircraft financing, including those discussed above, partially offset by the repayment of $400 million of Series 2003-1 Enhanced Equipment Trust Certificates and scheduled principal payments on long-term debt and capital lease obligations.

Contractual Obligations

The following is a summary of significant changes in our contractual obligations since December 31, 2007:

• Contract carrier obligations. As of June 30, 2008, the estimated payments under our capacity purchase agreements with contract carriers increased by a total of $5.2 billion for the period beginning in July 2008 and ending in 2020 compared to the estimate included in our Form 10-K. This increase is primarily associated with increases in fuel prices to record high levels. The estimated payments assume certain levels of flying under the capacity purchase agreements, but this flying is subject to change in accordance with the terms of the agreements between us and the contract carriers and other factors. The payments also reflect assumptions regarding certain costs such as fuel, labor, maintenance, insurance, catering, property tax and landing fees. Accordingly, our actual payments under these agreements could differ materially from these estimated payments.

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Application of Critical Accounting Policies

Critical Accounting Estimates

Goodwill and Other Intangible Assets

Goodwill reflects the excess of the reorganization value of the Successor over the fair value of tangible and identifiable intangible assets, reduced by liabilities, from the adoption of fresh start reporting, adjusted for impairment. The following table reflects the change in the carrying amount of goodwill at June 30, 2008:

(in millions)	Total
Balance at December 31, 2007	$	12,104
Impairment charge		(6,939	)
Adjustment to pre-emergence deferred tax assets and reserves		4
Balance at June 30, 2008	$	5,169

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), we apply a fair value-based impairment test to the net book value of goodwill and indefinite-lived intangible assets on an annual basis and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The analysis of potential impairment of goodwill requires a two-step process. The first step is the estimation of fair value. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value.

During the three months ended March 31, 2008, we experienced a significant decline in market capitalization driven primarily by record fuel prices and overall airline industry conditions. In addition, the announcement of our intention to merge with Northwest established a stock exchange ratio based on the relative valuation of Delta and Northwest (see Note 11 of the Notes to the Condensed Consolidated Financial Statements). We determined that these factors combined with further increases in fuel prices were an indicator that a goodwill impairment test was required pursuant to SFAS 142. As a result, we estimated fair value based on a discounted projection of future cash flows, supported with a market-based valuation. We determined that goodwill was impaired and recorded a non-cash charge of $6.1 billion based on a preliminary assessment. We finalized the second step of the impairment test during the June 2008 quarter and recorded an additional non-cash charge of $839 million due to the net increase in the fair value of our other assets and liabilities for a total impairment charge to $6.9 billion. In estimating fair value under this second step, we based our estimates and assumptions on the same valuation techniques employed and levels of inputs used to estimate the fair value of goodwill upon adoption of fresh start reporting.

In accordance with SOP 90-7, a reduction in the valuation allowance associated with the realization of pre-emergence deferred tax assets will sequentially reduce the value of recorded goodwill followed by other indefinite-lived intangible assets until the net carrying cost of these assets is zero. During the six months ended June 30, 2008, we increased goodwill by $4 million associated with adjustments to pre-emergence deferred tax assets and reserves.

In addition to the goodwill impairment charge, we recorded a non-cash charge of $357 million ($238 million after tax) to reduce the carrying value of certain intangible assets based on their revised estimated fair values. This charge was recorded to impairment of intangible assets on our Consolidated Statement of Operations for the three and six months ended June 30, 2008. The following tables reflect the change in the carrying amount of intangible assets at June 30, 2008:

Indefinite-Lived Intangible Assets

(in millions)	Carrying Amount December 31, 2007		Impairment			Carrying Amount June 30, 2008
Trade name	$	880	$	(30	)	$	850
Takeoff and arrival slots		635		(85	)		550
SkyTeam alliance		480		(199	)		281
Other		2		—			2
Total	$	1,997	$	(314	)	$	1,683

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Definite-Lived Intangible Assets

(in millions)	Net Carrying Amount December 31, 2007		Amortization			Impairment			Net Carrying Amount June 30, 2008
Marketing agreements	$	581	$	(97	)	$	—		$	484
Contracts		195		(8	)		(12	)		175
Customer relationships		33		(2	)		(31	)		—
Total	$	809	$	(107	)	$	(43	)	$	659

Changes in assumptions or circumstances could result in an additional impairment in the period in which the change occurs and in future years. Factors which could cause impairment include, but are not limited to, (1) long-term negative trends in our market capitalization, (2) continued high fuel prices, (3) declining passenger mile yields, (4) lower demand as a result of the weakening U.S. economy, (5) interruption to our operations due to an employee strike, terrorist attack, or other reasons and (6) consolidation of competitors within the industry. For additional information about our accounting policy for goodwill and other intangible assets, see Notes 2 and 5 of the Notes to the Consolidated Financial Statements in our Form 10-K.

For information regarding our other Critical Accounting Estimates, see the “Application of Critical Accounting Policies” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in the “Market Risks Associated with Financial Instruments” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K other than those discussed below.

Aircraft Fuel Price Risk

Our results of operations are materially impacted by changes in the price of aircraft fuel. In an effort to manage our exposure to change in aircraft fuel prices, we periodically enter into derivative contracts comprised of crude oil, heating oil and jet fuel swap, collar and call option contracts to hedge a portion of our projected aircraft fuel requirements, including those of our contract carriers under capacity purchase agreements. As of June 30, 2008, our open fuel hedge contracts had an estimated fair value gain of $1.2 billion, which is recorded in fuel hedge derivatives within both current and other assets on our Consolidated Balance Sheet.

In accordance with our fuel hedge agreements, (1) we may require counterparties to fund the margin associated with our gain position on fuel hedge contracts, and (2) counterparties may require us to fund the margin associated with our loss position on these contracts. At June 30, 2008, we held $973 million of fuel hedge margin from counterparties, $671 million of which is recorded in cash and cash equivalents and $302 million of which is recorded in restricted cash on our Consolidated Balance Sheet. At June 30, 2008, we were not required to fund any fuel hedge margin with counterparties.

For the six months ended June 30, 2008, aircraft fuel and related taxes accounted for 18% of our total operating expenses. Aircraft fuel and related taxes for the six months ended June 30, 2008 increased 50% compared to the six months ended June 30, 2007 primarily due to higher average fuel prices. Fuel prices averaged $2.99 per gallon, including fuel hedge gains of $354 million, for the six months ended June 30, 2008, compared to $2.02 per gallon, including fuel hedge losses of $4 million, for the six months ended June 30, 2007.

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As of June 30, 2008, our fuel hedging position for the six months ending December 31, 2008 and the years ending December 31, 2009 and 2010 is as follows:

(in millions, unless otherwise stated)	Weighted Average Contract Strike Price per Gallon		Percentage of Projected Fuel Requirements Hedged		Contract Fair Value at June 30, 2008		Contract Fair Value Based Upon 10% Rise in Futures Prices(1)		Increase in Aircraft Fuel Expense Due to 10% Rise in Jet Fuel Price(2)
Six months ending December 31, 2008
Heating oil
Call options	$	2.41	17	%	$	335	$	421	$	190
Swaps		2.72	5			78		102		55
Collars—cap/floor		2.98/2.90	3			32		45		28
Crude Oil
Collars—cap/floor		3.05/2.81	8			39		87		91
Jet Fuel
Swaps		2.92	11			144		197		114
Total			44	%	$	628	$	852	$	478
2009
Heating oil
Collars—cap/floor	$	3.68/3.45	3	%	$	24	$	71	$	196
Crude oil
Swaps		2.57	1			12		18		49
Call options		2.05	10			325		408		771
Collars—cap/floor		2.97/2.76	8			94		209		656
Total			22	%	$	455	$	706	$	1,672
2010
Crude oil
Call options	$	2.16	5	%	$	146	$	188	$	1,714
Total			5	%	$	146	$	188	$	1,714

⁽¹⁾ Projection based upon average futures prices per gallon by contract settlement month.

⁽²⁾ Projection based upon estimated jet fuel price per gallon of $3.85, $4.22 and $4.46 for the six months ending December 31, 2008 and the years ending December 31, 2009 and 2010, respectively, and estimated aircraft fuel consumption of 1.2 billion gallons, 2.4 billion gallons and 2.5 billion gallons for the six months ending December 31, 2008 and the years ending December 31, 2009 and 2010, respectively.

Interest Rate Risk

Our exposure to market risk from volatility in interest rates is primarily associated with our long-term debt obligations. Market risk associated with our fixed and variable rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. During June 2008, we entered into interest rate swap agreements converting our interest rate exposure on a portion of our debt portfolio from a fixed rate to a floating rate. The interest rate swap agreements have an aggregate notional amount of $1 billion maturing September 2011 through July 2012. The floating rates are based on three month LIBOR plus a margin.

At June 30, 2008, our interest rate swap agreements had a fair value of $3 million, which was recorded in other noncurrent assets on our Consolidated Balance Sheet. In accordance with fair value hedge accounting, the carrying value of our long-term debt at June 30, 2008 included $3 million of fair value adjustments.

ITEM 4. Controls and Procedures

Management, including our Chief Executive Officer and President and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to effectively identify and timely disclose important information. Management, including our Chief Executive Officer and President and Chief Financial Officer, concluded that the controls and procedures were effective as of June 30, 2008 to ensure that material information was accumulated and communicated to management, including our Chief Executive Officer and President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the June 2008 quarter, we made no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Delta Air Lines, Inc.

We have reviewed the consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of June 30, 2008 (Successor), and the related consolidated statements of operations for the three-month and six-month periods ended June 30, 2008 (Successor), the two-month period ended June 30, 2007 (Successor), the one-month and four-month periods ended April 30, 2007 (Predecessor), and the condensed consolidated statements of cash flows for the six-month period ended June 30, 2008 (Successor), the two-month period ended June 30, 2007 (Successor) and the four-month period ended April 30, 2007 (Predecessor). These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Delta Air Lines, Inc. as of December 31, 2007 (Successor), and the related consolidated statements of operations, shareowners’ equity, and cash flows for the eight-month period ended December 31, 2007 (Successor), and the four-month period ended April 30, 2007 (Predecessor) of Delta Air Lines, Inc. and in our report dated February 13, 2008, we expressed an unqualified opinion on those consolidated financial statements.

/s/ Ernst & Young LLP

Atlanta, Georgia

July 16, 2008

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PART II.     OTHER INFORMATION

ITEM 1. Legal Proceedings

D’Augusta, et al. Antitrust Litigation

In June 2008, an antitrust lawsuit was filed in the U.S. District Court for the Northern District of California against us and Northwest Airlines Corporation in connection with our proposed merger with Northwest. The plaintiffs allege, among other things, that Delta and Northwest are substantial competitors on routes operated in the United States and that the proposed merger between Delta and Northwest would harm consumers through higher ticket prices and diminished airline services. The plaintiffs claim the merger, if consummated, would substantially lessen competition or create a monopoly in the transportation of airline passengers in the United States in violation of Section 7 of the Clayton Act. Plaintiffs seek a determination that the merger violates Section 7 of the Clayton Act, a preliminary and permanent injunction to prohibit the merger, costs and attorneys’ fees. The District Court has not scheduled a trial date for this lawsuit. We believe that the plaintiffs’ claims are without merit, and we intend to vigorously defend this lawsuit.

Comair Flight 5191

On August 27, 2006, Comair Flight 5191 crashed shortly after take-off in a field near the Blue Grass Airport in Lexington, Kentucky. All 47 passengers and two members of the flight crew died in the accident. The third crew member survived with severe injuries. Lawsuits arising out of this accident have been filed against our wholly owned subsidiary, Comair, on behalf of 44 passengers. A number of lawsuits also name Delta, the Federal Aviation Administration (the “FAA”) and the third crew member as a defendant. The lawsuits generally assert claims for wrongful death and related personal injuries, and seek unspecified damages, including punitive damages in most cases. As of July 8, 2008, settlements have been reached with the families of 17 of the 47 passengers. All the remaining passenger lawsuits are currently pending in the U.S. District Court for the Eastern District of Kentucky and have been consolidated as “In Re Air Crash at Lexington, Kentucky, August 27, 2006, Master File No. 5:06-CV-316.”

On July 8, 2008, the District Court granted Delta’s motion to dismiss all claims against Delta in the pending lawsuits. Comair continues to pursue settlement negotiations with the plaintiffs in these lawsuits. The settled cases have been dismissed with prejudice.

Comair has filed direct actions in the U.S. District Court for the Eastern District of Kentucky against the U.S. (based on the actions of the FAA), and in state court in Fayette County, Kentucky, against the Lexington Airport Board and certain other Lexington airport defendants. Comair has also filed third party complaints against these same parties in each of the pending passenger lawsuits. These actions seek to apportion liability for damages arising from this accident among all responsible parties.

We carry aviation risk liability insurance and believe that this insurance is sufficient to cover any liability likely to arise from this accident.

*            *            *

Item 3. Legal Proceedings,” of our Form 10-K includes a discussion of other legal proceedings.

ITEM 1A. Risk Factors

“Item 1A. Risk Factors” of our Form 10-K includes a discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Form 10-K. Except as presented below, there have been no material changes from the risk factors described in our Form 10-K

Risk Factors Relating to Delta

Our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes is subject to limitation and may be limited further as a result of the merger with Northwest and the employee equity issuance.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses (“NOLs”), to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years). The amount of the annual limitation generally is equal to the value of the stock of the corporation immediately prior to the ownership change multiplied by the adjusted federal tax-exempt rate, set by the Internal Revenue Service.

As of December 31, 2007, we had approximately $9.1 billion of federal and state NOL carryforwards. We experienced an ownership change in 2007 as a result of our plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. Pursuant to the merger agreement, we will elect out of Section 382(l)(5) of the Code, in which case Section 382(l)(6) of the Code will be applicable to the ownership changes that occurred pursuant to our plan of reorganization. Under Section 382(l)(6) of the Code, the determination of the value of the corporation, for purposes of determining the Section 382 limitation, includes any increase in the value of the

36

corporation resulting from the surrender or cancellation of creditors’ claims in the reorganization. Nonetheless, a second ownership change could further limit our ability to utilize NOL carryforwards for taxable years including or following the subsequent “ownership change.”

It is currently anticipated that the merger and the employee equity issuance, together with certain other transactions involving the sale of Delta common stock within the testing period, will result in a second ownership change of Delta. Even if the merger and the employee equity issuance did not result in an ownership change, the merger and the employee equity issuance would increase the risk that there would be an additional ownership change in the future (which ownership change could occur as a result of transactions involving Delta stock that are outside of our control).

The occurrence of a second ownership change could limit the ability to utilize pre-change NOLs that are not currently subject to limitation, and could further limit the ability to utilize NOLs that are currently subject to limitation. Limitations imposed on the ability to use NOLs to offset future taxable income could cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. Similar rules and limitations may apply for state income tax purposes.

ITEM 2. Issuer Purchases of Equity Securities

The following shares of Common Stock were withheld to satisfy tax withholding obligations during the June 2008 quarter from the distributions described below. These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item.

Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Programs
April 1-30, 2008	24,845	$	9.09	24,845		(2)
May 1-31, 2008	6,489		7.57	6,489		(2)
June 1-30, 2008	7,672		5.66	7,672		(2)
Total	39,006	$	8.16	39,006

⁽¹⁾ Shares were withheld from employees to satisfy certain tax withholding obligations due in connection with grants of stock under our 2007 Performance Compensation Plan (“Performance Compensation Plan”) and in connection with bankruptcy claims. We disclosed these matters generally in our Disclosure Statement dated February 7, 2007, as amended, and the Plan of Reorganization, which were filed with the Securities and Exchange Commission under Form 8-K.

⁽²⁾ The Performance Compensation Plan and the Plan of Reorganization provide for the withholding of shares to satisfy tax withholding obligations. Neither specifies a maximum number of shares that can be withheld for this purpose. For additional information about the Plan of Reorganization and the Performance Compensation Plan, see Notes 1 and 12 of the Notes to the Consolidated Financial Statements in our Form 10-K.

ITEM 4. Submission of Matters to a Vote of Security Holders

Delta’s Annual Meeting of Stockholders was held on June 3, 2008 in New York City, New York (“Annual Meeting”). At the Annual Meeting, the holders of common stock took the following actions:

1. Elected the persons named below to our Board of Directors by the following vote:

NOMINEES	FOR	AGAINST	ABSTENTIONS
Richard H. Anderson	220,416,084	2,522,318	46,122
John S. Brinzo	220,747,137	2,196,281	41,107
Daniel A. Carp	220,707,811	2,252,715	23,998
Eugene I. Davis	180,285,122	42,658,022	41,380
Richard Karl Goeltz	220,790,122	2,153,040	41,363
David R. Goode	220,610,669	2,348,924	24,931
Victor L. Lund	213,937,453	9,022,980	24,090
Walter E. Massey	220,536,533	2,406,091	41,899
Paula Rosput Reynolds	218,316,900	4,626,277	41,347
Kenneth C. Rogers	220,686,063	2,261,168	37,293
Kenneth B. Woodrow	220,571,985	2,382,987	29,552

There were no broker non-votes on this matter.

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2. Ratified the appointment of Ernst & Young as independent auditors for the year ending December 31, 2008 by the following vote of:

FOR	AGAINST	ABSTENTIONS
221,572,482	1,240,293	171,748

There were no broker non-votes on this matter.

ITEM 6. Exhibits

(a) Exhibits

10	Transaction Framework Agreement among Delta, Delta Master Executive Council, Northwest Master Executive Council and Air Line Pilots Association, International dated as of June 26, 2008.
15	Letter from Ernst & Young LLP regarding unaudited interim financial information
31.1	Certification by Delta’s Chief Executive Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008
31.2	Certification by Delta’s President and Chief Financial Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008
32	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta’s Chief Executive Officer and President and Chief Financial Officer with respect to Delta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008

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SIGNATURE

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 thereunto duly authorized.

Delta Air Lines, Inc. (Registrant)
By:	/s/    EDWARD H. BASTIAN
	Edward H. Bastian President and Chief Financial Officer (Principal Financial and Accounting Officer)

July 17, 2008

39

EX-10

Exhibit 10

TRANSACTION FRAMEWORK AGREEMENT

among

DELTA AIR LINES, INC.,

DELTA MASTER EXECUTIVE COUNCIL,

NORTHWEST MASTER EXECUTIVE COUNCIL

and

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL

Dated as of June 26, 2008

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS
Section 1.01.	Certain Defined Terms	2
Section 1.02.	Terms Generally	5
ARTICLE II
COLLECTIVE BARGAINING AGREEMENT
Section 2.01.	Entry into the new PWA	6
Section 2.02.	Pilot Equity Issuance	7
Section 2.03.	Original TFA	7
ARTICLE III
SALE AND PURCHASE OF SHARES
Section 3.01.	Sale and Purchase of Common Shares	7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DELTA
Section 4.01.	Organization and Qualification	10
Section 4.02.	Authority for this Agreement; Board Action	10
Section 4.03.	Consents and Approvals; No Violation	10
Section 4.04.	Shares	11
Section 4.05.	Proxy Statement	11
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ALPA, THE DELTA MEC AND THE NORTHWEST MEC
Section 5.01.	Authority for this Agreement	12
Section 5.02.	Consents and Approvals; No Violation	12
Section 5.03.	Proxy Statement	13
ARTICLE VI
OTHER COVENANTS
Section 6.01.	Support of Merger	13
Section 6.02.	No Prejudice	14
Section 6.03.	Fees and Expenses	14
Section 6.04.	Press Release	14
Section 6.05.	Reasonable Best Efforts	14

i

TABLE OF CONTENTS

(continued)

		Page
Section 6.06.	Proxy Statement; Stockholder Approval	15
Section 6.07.	Pilot Directors	15
Section 6.08.	Indemnity	16
ARTICLE VII
CONDITIONS
Section 7.01.	Conditions to Each Party’s Obligations	17
Section 7.02.	Conditions to Obligations of ALPA, the Delta MEC and the Northwest MEC	17
Section 7.03.	Conditions to Obligations of Delta	18
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.01.	Termination	18
Section 8.02.	Effect of Termination	19
Section 8.03.	Fees and Expenses	19
Section 8.04.	Amendment	20
Section 8.05.	Extension; Waiver; Remedies	20
ARTICLE IX
MISCELLANEOUS
Section 9.01.	Representations and Warranties	20
Section 9.02.	Entire Agreement; Assignment	20
Section 9.03.	Jurisdiction; Venue	20
Section 9.04.	Validity; Specific Performance	21
Section 9.05.	Capacity of the Delta MEC and the Northwest MEC	21
Section 9.06.	Notices	21
Section 9.07.	Governing Law	23
Section 9.08.	Descriptive Headings	23
Section 9.09.	Parties in Interest	23
Section 9.10.	Waiver	23
Section 9.11.	Counterparts	23
Exhibits
Exhibit A	Registration Rights Procedures

ii

TRANSACTION FRAMEWORK AGREEMENT

THIS TRANSACTION FRAMEWORK AGREEMENT (this “Agreement”), dated as of June 26, 2008, by and among DELTA AIR LINES, INC., a Delaware corporation (“Delta”), DELTA MASTER EXECUTIVE COUNCIL (“Delta MEC”), NORTHWEST MASTER EXECUTIVE COUNCIL (“Northwest MEC”) and the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (“ALPA”) (collectively, the “Parties”).

RECITALS

WHEREAS, it is proposed that, on the Merger Agreement Effective Date (as defined below), pursuant to the Agreement and Plan of Merger by and among Delta, Nautilus Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Delta (“Merger Sub”) and Northwest Airlines Corporation, a Delaware corporation (“NWA”), dated as of April 14, 2008 (the “Merger Agreement”), Delta will acquire NWA (the “Merger”), including the operations of Northwest Airlines, Inc., a Minnesota corporation and a wholly-owned Subsidiary of NWA (“Northwest Airlines” and collectively with NWA, “Northwest”), through the merger of Merger Sub with and into NWA, with NWA as the surviving corporation and a direct wholly-owned subsidiary of Delta (Delta or any other ultimate publicly-held parent company of Delta and Northwest after giving effect to the Merger being referred to herein as the “Merged Company”);

WHEREAS, Delta, the Delta MEC and ALPA entered into the Transaction Framework Agreement, dated as of April 14, 2008 (the “Original TFA”);

WHEREAS, it is intended that, upon the DCC (as defined below), the air carriers (the “Merged Airline”) employing the Merged Company Pilots (as defined below) will operate pursuant to the new PWA (as defined below), except as otherwise provided therein;

WHEREAS, the Parties have agreed to a process for the determination of an integrated seniority list applicable to the Merged Company Pilots;

WHEREAS, the Parties wish to secure the benefits of an agreement as provided herein, in connection with the entry into the Merger Agreement;

WHEREAS, Delta has agreed to cause the Merged Company to issue to the Eligible Pilots (as defined below) equity interests in the Merged Company on the Pilot Equity Issuance Date (as defined below) on the terms and subject to the conditions contained, and approvals contemplated, herein;

WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms have the following meanings:

“Agreement” has the meaning specified in the Preamble.

“ALPA” has the meaning specified in the Preamble.

“Ancillary TFA” means the Ancillary Transaction Framework Agreement among NWA, Northwest Airlines, the Northwest MEC and ALPA, dated as of the date hereof.

“Announcement Date” means April 14, 2008.

“Claim” has the meaning specified in Section 6.08.

“Code” means the Internal Revenue Code of 1986, as amended.

“Contract” has the meaning specified in Section 4.03(a).

“Date of Corporate Closing” or “DCC” has the meaning specified in Section 2.01(a).

“Delta” has the meaning specified in the Preamble.

“Delta MEC” has the meaning specified in the Preamble.

“Delta Pilot Group” means the airline pilots in the service of Delta, as represented by ALPA and, for purposes of clarity, excluding (x) the airline pilots in the service of any Subsidiary of Delta, and (y) the airline pilots in the service of Northwest.

“Designee” means Athena Advisory Group, LLC.

“Eligible Pilots” mean those pilots who are on either the Delta pilot seniority list or the Northwest Airlines pilot seniority list on the DCC.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, as well as, in respect of the provisions of Section 3.01(f) hereof, no action letters related to the matters described therein, including the no-action letter dated January 12, 1999, issued by the SEC regarding such matters, all as the same shall be in effect from time to time.

“Existing Delta PWA” means the collective bargaining agreement applicable to the Delta Pilot Group in effect as of the date hereof, including, without limitation, as modified by the Letter of Agreement titled Mid-Contract Improvements Related to the Delta Merger (“LOA #19”), as it may be further modified.

2

“Existing Northwest CBA” means the collective bargaining agreement applicable to the Northwest Pilot Group in effect as of the date hereof, as it may be modified.

“Force Majeure Event” means an event (i) over which Delta does not have control and (ii) which involuntarily prevents Delta from conducting a substantial portion of its operations. Such event includes but is not limited to the grounding of a substantial number of Delta’s aircraft by a government agency, unavailability of fuel to Delta or a natural disaster with respect to Delta, in each case involuntarily preventing Delta from conducting a substantial portion of its operations.

“fully-diluted basis” has the meaning specified in Section 3.01(a).

“Governmental Entity” has the meaning specified in Section 4.03(b).

“Governmental Filings” has the meaning specified in Section 6.05.

“HSR Act” has the meaning specified in Section 4.03(b).

“Indemnitee” has the meaning specified in Section 6.08.

“Initial Holder” means one or more trusts (which may be tax qualified or non-qualified) or other entities not required to be registered under the Investment Company Act of 1940 for the benefit of the Eligible Pilots or the retirement accounts of the Eligible Pilots, with the structure of such trust(s) or entity to be determined by the Delta MEC and the Northwest MEC, acting jointly, with the consent of Delta, not to be unreasonably withheld.

“Law” has the meaning specified in Section 4.03(a).

“LOA #19” has the meaning specified in definition of “Existing Delta PWA”.

“MEC Successor” means any successor to the Delta MEC, the Northwest MEC or the Merged Company MEC, including as a result of merger or reorganization of Delta (including the Merger) or otherwise.

“Merged Airline” has the meaning specified in the Recitals.

“Merged Company” has the meaning specified in the Recitals.

“Merged Company MEC” means the ALPA Master Executive Council of the Merged Airline, when and as constituted from time to time on or after the DCC.

“Merged Company Pilots” means the Delta Pilot Group and the Northwest Pilot Group, collectively.

“Merger” has the meaning specified in the Recitals.

3

“Merger Agreement” has the meaning specified in the Recitals.

“Merger Agreement Effective Date” is the date and time on which the Merger becomes effective under applicable law in accordance with the Merger Agreement.

“Merger Sub” has the meaning specified in the Recitals.

“new PWA” has the meaning specified in Section 2.01(a).

“Nomination Letter Agreement” means that certain Letter of Agreement dated as of the Announcement Date among Delta, the Delta MEC and ALPA with respect to the nomination of the “Pilot Nominee” (as defined therein) to the Board of Directors of Delta.

“Northwest” has the meaning specified in the Recitals.

“Northwest Airlines” has the meaning specified in the Recitals.

“Northwest Board” has the meaning specified in Section 6.07.

“Northwest MEC” has the meaning specified in the Preamble.

“Northwest Pilot Group” means the airline pilots in the service of Northwest Airlines, as represented by ALPA and, for purposes of clarity, excluding the airline pilots in the service of any subsidiary of Northwest Airlines or NWA other than Northwest Airlines.

“NYSE” has the meaning specified in Section 3.01(a).

“NWA” has the meaning specified in the Recitals.

“Original TFA” has the meaning specified in the Recitals.

“Parties” has the meaning specified in the Preamble.

“Person” means any individual, corporation, limited liability company, partnership, association, trust, estate or other entity or organization, including any Governmental Entity.

“Pilot Director” means a member of the Board of Directors of Delta (or any successor), who has been nominated in accordance with the Nomination Letter Agreement (including after giving effect to Section 6.07 of this Agreement).

“Pilot Equity Issuance” has the meaning set forth in Section 2.02.

“Pilot Equity Issuance Date” has the meaning set forth in Section 2.02.

“Pilot Shares” has the meaning specified in Section 3.01(a).

“Proxy Statement” has the meaning specified in Section 4.05.

4

“Process Agreement” has the meaning specified in Section 2.01(a).

“Reimbursement Cap” has the meaning specified in Section 6.03.

“Representatives” means, when used (w) with respect to a Party, the directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers, and other agents, advisors and representatives of such Party, as applicable, and its Subsidiaries, (x) with respect to the Delta Pilot Group, the Delta MEC, unless the Merged Company MEC is then in existence, (y) with respect to the Northwest Pilot Group, the Northwest MEC, unless the Merged Company MEC is then in existence, and (z) with respect to the Merged Company Pilots, the Merged Company MEC, if then in existence.

“Requisite Stockholder Approval” means the affirmative vote of at least the minimum number of stockholders of Delta required by the certificate of incorporation or bylaws of Delta, as the case may be, by Law or the rules and regulations of the NYSE necessary to approve the Pilot Equity Issuance (either alone or as part of another equity plan or plans) and the plan for the distribution of proceeds related thereto, each as contemplated in Section 3.01, and to complete the Pilot Equity Issuance.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, and any similar or successor federal statute, and the rules and regulations promulgated thereunder, all as amended, and as the same may be in effect from time to time.

“Shelf Registration” has the meaning specified in Section 3.01(d).

“Shelf Registration Statement” has the meaning specified in Section 3.01(d).

“Special Meeting” has the meaning specified in Section 6.06(b).

“Subsidiary” means, when used with reference to a Person, any other Person (other than natural persons) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions, or a majority of the outstanding voting securities of which, are owned directly or indirectly by such first Person.

“Takedown” has the meaning specified in Section 3.01(d).

“transactions contemplated hereby” means, for purposes of this Agreement, all of the transactions contemplated by this Agreement, excluding the Merger.

SECTION 1.02. Terms Generally. (a) Words in the singular shall include the plural and vice versa, and words of one gender shall include the other genders, in each case, as the context requires, (b) the term “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, and Article, Section, paragraph, Exhibit and Schedule references are to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified.

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ARTICLE II

COLLECTIVE BARGAINING AGREEMENT

SECTION 2.01. Entry into the new PWA. (a) Upon the terms and subject to the conditions hereof, the Parties have tentatively agreed to the collective bargaining agreement approved by the Delta MEC on or prior to the date hereof and by the Northwest MEC on or prior to the date hereof, governing the Merged Company Pilots (the “new PWA”), effective as of 12:01 a.m. New York time on the day following the Merger Agreement Effective Date (the “Date of Corporate Closing” or “DCC”), subject to the provisions of this Agreement and ratification thereof as provided herein. The Northwest MEC, the Delta MEC and ALPA shall adopt and be bound by the Process Agreement, dated on or prior to the date hereof, between the Northwest MEC and the Delta MEC, and approved by ALPA (the “Process Agreement”), relating to the determination of an integrated seniority list and shall not revise, waive any material right under, or terminate the Process Agreement without the consent of Delta.

(b) The Delta MEC and the Northwest MEC have each agreed to recommend ratification by the Delta Pilot Group and the Northwest Pilot Group, respectively, of the new PWA and to submit the new PWA, as promptly as practicable after the date hereof, to the Delta Pilot Group and the Northwest Pilot Group, respectively, for separate ratification, within the time limits set forth in Section 6.01 hereof.

(c) Promptly upon separate ratification by the Delta Pilot Group and the Northwest Pilot Group as provided for in Section 2.01(b), the Delta MEC and the Northwest MEC will deliver the new PWA to the president of ALPA for his signature, and each of the Parties shall, and, on or promptly following the Merger Agreement Effective Date, Delta shall cause the Merged Company to, execute the new PWA to be effective subject to Section 2.01(d) hereof.

(d) Until the DCC, the Delta Pilot Group and the Northwest Pilot Group will remain separate and covered by the Existing Delta PWA and the Existing Northwest CBA, respectively, and the new PWA shall not become effective until the DCC. Upon the DCC, the Merged Airline will operate pursuant to the new PWA, if separately ratified by both the Delta Pilot Group and the Northwest Pilot Group as provided herein. Each of Delta and the Merged Company will support ALPA’s application to the National Mediation Board in respect of the Merged Airline for recognition of a single transportation system and single pilot craft or class.

(e) Delta shall not, prior to the Merger Agreement Effective Date, swap or transfer orders or options for new aircraft existing prior to the Announcement Date with Northwest. Between the date hereof and the DCC, no pilot on the Delta seniority list as of the Announcement Date will be placed on furlough as a result of the Merger Agreement, except and only to the extent that a Force Majeure Event has occurred and is continuing during the period in which such furlough takes place and is the cause of any such furlough.

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SECTION 2.02. Pilot Equity Issuance. Subject to the terms and conditions of this Agreement, the issuance of the Pilot Shares (the “Pilot Equity Issuance” and the date on which the Pilot Equity Issuance actually occurs, the “Pilot Equity Issuance Date”) will take place at the same time and at the same place as the closing of the Merger Agreement on the Merger Agreement Effective Date; provided, however, that notwithstanding the satisfaction or waiver of the conditions set forth in Article VII, this Agreement may be terminated pursuant to and in accordance with Section 8.01 hereof such that the Parties shall not be required to effect the Pilot Equity Issuance. Notwithstanding the occurrence of the Pilot Equity Issuance Date, it is agreed that the Designee may elect to cause the Merged Company to issue any or all of the Pilot Shares on one or more dates occurring on or after the Pilot Equity Issuance Date, by providing reasonable written notice thereof to the Merged Company and each such notice shall specify the number of Pilot Shares to be issued on any such date.

SECTION 2.03. Original TFA. Each of Delta, the Delta MEC and ALPA agrees that, from the date hereof until such time (if any) that this Agreement is terminated pursuant to Section 8.01 for any reason, the Original TFA shall be superseded in all respects by this Agreement; provided, however, that upon a termination of this Agreement for any reason, the Original TFA and the rights and obligations thereunder shall remain in full force and effect, subject to and in accordance with the terms thereof as if this Agreement had never been entered into; provided, further that any action constituting a breach of this Agreement that would have constituted a breach of the Original TFA, had the Original TFA been in effect as of the date of the breach of this Agreement, shall constitute, and result in, a breach of the Original TFA. For the avoidance of doubt, there shall be no duplication of the benefits, including with respect to (i) the issuance of Pilot Shares, (ii) the payment of fees and expenses, (iii) registration rights, and (iv) the right to appoint a Pilot Director pursuant to the Nomination Letter Agreement, provided under the Original TFA and this Agreement.

ARTICLE III

SALE AND PURCHASE OF SHARES

SECTION 3.01. Sale and Purchase of Common Shares. (a) Subject to the terms and conditions of this Agreement, on the Pilot Equity Issuance Date, in consideration for the undertakings of ALPA, the Delta MEC and the Northwest MEC contained herein, Delta will cause the Merged Company to issue (i) for the benefit of the members of the Delta Pilot Group who are Eligible Pilots, shares of common stock in the Merged Company in an amount equal, in the aggregate, to 3.5% of the outstanding equity capitalization of the Merged Company on the Merger Agreement Effective Date and (ii) for the benefit of the members of the Northwest Pilot Group who are Eligible Pilots, shares of common stock in the Merged Company in an amount equal, in the aggregate, to 2.38% of the outstanding equity capitalization of the Merged Company on the Merger Agreement Effective Date (the shares issued pursuant to clauses (i) and (ii), collectively, the “Pilot Shares”), in each case determined on a fully-diluted basis. (For purposes of this Agreement, “fully-diluted basis” means taking into account the maximum number of shares issued or issuable in respect of obligations outstanding as of the Merger Agreement Effective Date, whether voting or non-voting, whether restricted or unrestricted, whether issuable pursuant to options, warrants, convertible securities or exchangeable securities or otherwise, without regard to vesting, including any such shares that may be issued, issuable or

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reserved for issuance pursuant to the respective plans of reorganization of Delta and NWA, provided, however, that the number of shares issuable pursuant to options, warrants, or securities convertible or exchangeable into shares of common stock shall be calculated based on the “treasury stock method” of calculating diluted earnings per share under Statement of Financial Accounting Standards No. 128 as in effect as of the date hereof ). Delta will use reasonable best efforts to cause the Pilot Shares to be authorized for listing on the New York Stock Exchange (“NYSE”), upon official notice of issuance, by no later than the Merger Agreement Effective Date.

(b) The Pilot Shares may be issued to the Initial Holder and/or the Eligible Pilots (or certain retirement accounts of the Eligible Pilots in accordance with subsection (e) of this Section 3.01) as may be determined by the Designee. The Pilot Shares or the cash proceeds from the resale thereof as provided herein shall be distributed among the Eligible Pilots or their pilot accounts as provided in Paragraph E of LOA#19 in respect of members of the Delta Pilot Group and as provided in Attachment A, “Pilot Shares (NW) and Proceeds of Pilots Shares (NW)” to the new PWA in respect of members of the Northwest Pilot Group.

(c) Delta agrees to file with the SEC, no later than the Merger Agreement Effective Date, a registration statement on Form S-8 (or any successor form) to register the issuance of the Pilot Shares (and the participants’ interests in the relevant plans) to permit the Pilot Shares to be distributed in kind to the Eligible Pilots and to be freely-transferable (including, if requested by the Designee, a separate resale prospectus included therein to permit resales by holders who may be deemed to be affiliates of the Merged Company) and will maintain the effectiveness of such registration statement for as long as necessary to permit such resales of such Pilot Shares by such holders.

(d) At any time prior to, on or after the Pilot Equity Issuance Date, the Designee may require the Merged Company to file a shelf registration statement under the Securities Act in respect of all or a portion of the Pilot Shares (a “Shelf Registration”) by delivering to the Merged Company a written notice stating that such right is being exercised, specifying the number of Pilot Shares to be included in such shelf registration and describing the intended method of distribution thereof, which may include an underwritten offering. Upon receiving such a request, the Merged Company shall (i) use all reasonable efforts to file as promptly as reasonably practicable a shelf registration statement on Form S-3 (or any successor form) (the “Shelf Registration Statement”) to permit resale of the Pilot Shares by the Initial Holder for the benefit of the members of the Eligible Pilots pursuant to one or more registered secondary offerings (which may include underwritten offerings) on or after the Pilot Equity Issuance Date (“Takedowns”), including, if eligible, filing such registration statement as an automatic shelf registration statement so that it is effective upon filing, (ii) after the filing of an initial version of the Shelf Registration Statement (other than an automatic Shelf Registration Statement), use all reasonable efforts to cause such registration statement to be declared effective under the Securities Act, and (iii) after the Shelf Registration Statement becomes effective, maintain its effectiveness under the Securities Act for not less than one year, subject to extension as provided in Exhibit A. The Initial Holder (or the Designee acting on behalf of the Initial Holder) may effect as many as three (3) Takedowns pursuant to the Shelf Registration Statement (subject to the provisions of Exhibit A) and the Parties agree to comply with the registration procedures provided on Exhibit A for any such Takedowns.

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(e) In connection with any disposition of Pilot Shares to the participating pilots or pursuant to a Shelf Registration, the Parties will work together to develop a program that allows all or a portion of the distributions in respect of the Pilot Shares (in kind in the case of a disposition to the participating pilots or, in the case of resale pursuant to a Shelf Registration, the resulting proceeds in cash) to the participating pilots to be made, to the maximum extent permitted by law (including but not limited to Section 415 of the Code and other restrictions on contributions or additions to qualified plans under the Code or ERISA), in the form of a contribution to the Delta Pilots Defined Contribution Plan or the Delta Pilots Savings Plan (or any successor to either) or any defined contribution plan or savings plan applicable to the Northwest Pilot Group, as the case may be, and treated as an “employer” contribution for U.S. federal income tax purposes.

(f) In connection with the Pilot Equity Issuance, Delta agrees to cause the Merged Company’s Board of Directors to adopt, prior to the Merger Agreement Effective Date, resolutions as may be reasonably requested by the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor) or ALPA, providing that the direct or indirect acquisition by the Initial Holder, the Pilot Director, the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor) or any of their respective members, ALPA, or any of the Merged Company Pilots of Pilot Shares is to the maximum extent permitted by law exempt under Rule 16b-3 under the Exchange Act. Such resolutions shall include the approval of the Pilot Equity Issuance and language stating that such approval is granted to provide an exemption to the Pilot Director, if a participant in such issuance, under Rule 16b-3 of the Exchange Act and, insofar (if at all) as the Pilot Director may be deemed to be a designee of the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor), ALPA or any of the Merged Company Pilots, that the Merged Company acknowledges that the Pilot Director may be such a designee and that such approval is intended to extend to the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor), or any of their respective members, ALPA and the Merged Company Pilots, as the case may be. After the date hereof, in the event that Delta is the Merged Company, at the request of any of the Delta MEC, the Northwest MEC, the Merged Company MEC or ALPA, Delta agrees to cause Delta’s Board of Directors to adopt, prior to the Pilot Equity Issuance Date, a resolution reconfirming the resolutions of Delta’s Board of Directors adopted pursuant to Section 4.02(ii) hereof. Delta also agrees to cause the Merged Company’s Board of Directors to adopt, prior to the Merger Agreement Effective Date, resolutions as may be reasonably requested by the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor) or ALPA, consistent with Section 5.14 of the Merger Agreement, in respect of the acquisition by the Delta MEC, the Northwest MEC, the Merged Company MEC (or any MEC Successor) or any of their respective members, ALPA, or any of the members of the Merged Company Pilots of shares of common stock of the Merged Company constituting Merger Consideration (as defined in the Merger Agreement).

(g) Delta agrees to cause the Merged Company’s Board of Directors to adopt, prior to the Merger Agreement Effective Date, resolutions to waive compliance with any ownership limits and restrictions on transfer contained in the Merged Company’s certificate of incorporation similar to those contained in Article Twelve of Delta’s certificate of incorporation to the same effect as the resolutions adopted by Delta’s Board of Directors on or prior to the date hereof as referred to in Section 4.02(i) hereof.

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(h) The Merged Company and its subsidiaries shall be entitled to deduct and withhold from the Pilot Shares or the cash proceeds from the resale thereof such amounts as it is required to deduct and withhold with respect to such issuance or payment under the Code, and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax Law. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person or Persons in respect of which such deduction and withholding was made.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF DELTA

Delta hereby represents and warrants to ALPA, the Delta MEC and the Northwest MEC as follows:

SECTION 4.01. Organization and Qualification. Delta is a duly organized and validly existing entity in good standing under the Laws of its jurisdiction of organization, with all requisite entity power and authority to own its properties and conduct its business as currently conducted.

SECTION 4.02. Authority for this Agreement; Board Action. Delta has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Delta and the consummation by Delta of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action of Delta, including by (i) a resolution of Delta’s Board of Directors waiving compliance with the ownership limits and restrictions on transfer and other provisions of Article Twelve of the Delta’s certificate of incorporation substantially in the form agreed to by the Parties, and (ii) a resolution of Delta’s Board of Directors consistent with the provisions of Section 3.01(f) substantially in the form agreed to by the Parties. No other corporate proceedings on the part of Delta and no stockholder votes are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, other than, with respect to the Pilot Equity Issuance, the Requisite Stockholder Approval. This Agreement has been duly and validly executed and delivered by Delta, and, assuming due authorization, execution and delivery by each of the other Parties hereto constitutes a legal, valid and binding obligation of Delta, enforceable against Delta, in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

SECTION 4.03. Consents and Approvals; No Violation. (a) Neither the execution and delivery of this Agreement by Delta, nor the consummation of the transactions contemplated hereby will (i) violate or conflict with or result in any breach of any provision of the certificate of incorporation or bylaws of Delta, (ii) assuming all consents, approvals and authorizations contemplated by subsection (b) below have been obtained, and all filings described in such clauses have been made, conflict with or violate any order, writ, injunction, decree, judgment, determination, requirement, award, stipulation, statute, rule or regulation of any Governmental Entity (“Law”) applicable to Delta, as the case may be, or any of its Subsidiaries or by which any of their respective assets are bound, or (iii) violate, conflict with or

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result in a breach of, or require any consent, waiver or approval under, or result in a default or give rise to any right of termination, cancellation, modification or acceleration (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default or give rise to any such right) under, any of the terms, conditions or provisions of any note, bond, mortgage, lease, license, agreement, contract, indenture or other instrument or obligation (“Contract”) to which Delta or any of its Subsidiaries is a party or by which Delta or any of its Subsidiaries or any of their respective assets are bound, except, in the cases of clauses (ii) or (iii), for any such violations, defaults, consents or breaches that do not or would not reasonably be expected to prohibit, delay, restrict or impair the ability of Delta to consummate the transactions contemplated hereby in any material respect.

(b) The execution, delivery and performance of this Agreement by Delta and the consummation of the transactions contemplated hereby do not and will not require any consent, approval, authorization or permit of, or filing with or notification to, any foreign, federal, state or local government or subdivision thereof, or governmental, judicial, legislative, executive, administrative or regulatory authority, agency, commission, tribunal or body (a “Governmental Entity”), except (i) those required to consummate the Merger as specified in Sections 3.1(c)(v) and 3.2(c)(v) of the Merger Agreement, (ii) the pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), to the extent required, (iii) the applicable requirements of the Exchange Act or, with respect to Section 3.01 hereof and Exhibit A, the Securities Act, or the rules and regulations of the NYSE, and (iv) any such consents, approvals, authorizations or permits the failure of which to obtain does not or would not reasonably be expected to prohibit, delay, restrict or impair the ability of Delta to consummate the transactions contemplated hereby in any material respect.

(c) The Requisite Stockholder Approval constitutes the affirmative vote of at least a majority of the votes cast at the Special Meeting, provided that the total number of votes cast at the Special Meeting represent more than 50% in interest of all securities entitled to vote thereon, as determined by the rules and regulations of the NYSE.

SECTION 4.04. Shares. Upon issuance on the Pilot Equity Issuance Date pursuant to Article III, the Pilot Shares shall have been duly authorized and validly issued, fully paid and nonassessable. Upon delivery to the Initial Holder or its designees and/or the Eligible Pilots at or after the Pilot Equity Issuance Date of (i) in the case of Pilot Shares that are certificated, certificates representing such Pilot Shares, duly endorsed in blank or accompanied by stock or unit powers duly endorsed in blank in proper form for transfer or other proper instruments of transfer and (ii) in the case of Pilot Shares that are not certificated, proper instruments of transfer, good and valid title to the Pilot Shares will pass to the Initial Holder or its designees and/or the Eligible Pilots, as the case may be, free and clear of any Liens, other than those arising from acts of the Initial Holder or its affiliates and/or the Eligible Pilots.

SECTION 4.05. Proxy Statement. The letter to stockholders, notice of meeting, final proxy statement and form of proxy that will be provided to stockholders of Delta in connection with the Merger, including any amendments or supplements thereto (collectively, the “Proxy Statement”), at the time the Proxy Statement is first mailed to stockholders and at the time of any meeting of the stockholders, (i) will contain such information as is necessary or required by the rules and regulations of the NYSE or other applicable Law in order to obtain the

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Requisite Stockholder Approval, and (ii) in respect of the Pilot Equity Issuance and this Agreement, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. At the time of its respective filing with the SEC and at the time any amendment of supplement thereto is filed with the SEC, the Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC promulgated thereunder.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF ALPA, THE DELTA MEC AND THE

NORTHWEST MEC

Each of ALPA, the Delta MEC and the Northwest MEC hereby severally, and not jointly, represent and warrant as of the date hereof as follows:

SECTION 5.01. Authority for this Agreement. It has all necessary power and authority to execute and deliver this Agreement and, subject to the ratification and execution of the new PWA as provided in Section 2.01(c), to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by it and, subject to the ratification and execution of the new PWA as provided in Section 2.01(c), the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary proceedings on its part. This Agreement has been duly and validly executed and delivered by it and, assuming due authorization, execution and delivery by the other Parties hereto, constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

SECTION 5.02. Consents and Approvals; No Violation. (a) Subject to the ratification and execution of the new PWA as provided in Section 2.01(c), neither the execution and delivery of this Agreement by it, nor the consummation of the transactions contemplated hereby will (i) violate or conflict with or result in any breach of any provision its bylaws or similar governing documents, (ii) conflict with or violate any Law applicable to it, assuming all consents, approvals and authorizations contemplated by subsection (b) below have been obtained and all filings described in such clause have been made, to the extent required, or (iii) violate, conflict with or result in a breach of, or require any consent, waiver or approval under, or result in a default or give rise to any right of termination, cancellation, modification or acceleration (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default or give rise to any such right) under, any of the terms, conditions or provisions of any Contract to which it is a party or by which any of its assets are bound, except, in the case of clauses (ii) or (iii), for any such violations, defaults, consents or breaches that do not or would not reasonably be expected to prohibit, delay, restrict or impair its ability to consummate the transactions contemplated hereby in any material respect.

(b) The execution, delivery and performance of this Agreement by it, and the consummation of the transactions contemplated hereby do not and will not require any consent,

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approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except (i) the pre-merger notification requirements under the HSR Act, to the extent required, (ii) those required to consummate the Merger, (iii) the applicable requirements of the Exchange Act or, with respect to Section 3.01 and Exhibit A, the Securities Act, or the rules and regulations of the NYSE, and (iv) any such consents, approvals, authorizations or permits the failure of which to obtain does not or would not reasonably be expected to prohibit, delay, restrict or impair the ability of such parties to consummate the transactions contemplated hereby in any material respect.

SECTION 5.03. Proxy Statement. None of the information to be supplied by it in writing in respect of the Pilot Equity Issuance or this Agreement specifically for inclusion in the Proxy Statement will, at the time the Proxy Statement is first mailed to stockholders and at the time of any meeting of the stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, none of ALPA, the Delta MEC or the Northwest MEC makes any representation or warranty with respect to the information supplied or to be supplied by Delta, Northwest or any Affiliate of either that is contained in any of the foregoing documents.

ARTICLE VI

OTHER COVENANTS

SECTION 6.01. Support of Merger. Subject to the terms and conditions of this Agreement, each of the Delta MEC and the Northwest MEC agrees to (i) recommend the ratification of the new PWA to the Delta Pilot Group (in the case of the Delta MEC) and the Northwest Pilot Group (in the case of the Northwest MEC) and shall use its reasonable best efforts to cause a ratification vote by their respective pilot groups to be concluded within sixty (60) days after the date of this Agreement and (ii) unless a vote with respect to the ratification of the new PWA by the Delta Pilot Group or the Northwest Pilot Group shall have been taken and the requisite approval necessary to ratify the new PWA shall not have been obtained, cooperate with reasonable requests of Delta and Northwest to provide public support to the Merger. Subject to Delta complying with the last sentence of this Section 6.01, prior to any termination of this Agreement, neither the Delta MEC nor the Northwest MEC will make any statements inconsistent with the recommendation of such ratification and/or support of the Merger. Delta agrees that, at any time prior to the earlier of the termination of this Agreement or the consummation of the Merger, it will not (a) enter into any amendment or modification of the Merger Agreement or (b) adopt an alternative structure for the transactions contemplated by the Merger Agreement in accordance with Section 1.8 of the Merger Agreement, that would (in the case of clause (a) and/or (b)) (i) violate or materially frustrate the purposes of this Agreement, the Existing Delta PWA, the Existing Northwest CBA, the Ancillary TFA or the new PWA, (ii) modify in any material respect the form or nature of the Merger Consideration (as defined in the Merger Agreement) to be paid by Delta or the Merged Company in connection with the Merger Agreement to include (whether as a special dividend or otherwise) any amount of cash, fixed income securities or preferred stock (it being understood that such a modification of the Merger Consideration that would change the value of the Pilot Shares relative to the interests of the other stockholders of the Merged Company would constitute such a material modification), or (iii)

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otherwise have a material adverse effect on the interests of the Merged Company Pilots under this Agreement, other than in their capacity as stockholders of the Merged Company after the Merger Agreement Effective Date; provided that nothing in this sentence shall be deemed to limit the right of Delta to terminate or agree to terminate the Merger Agreement or the scope of any efforts that Delta may employ to obtain any required governmental or regulatory consents, clearances, approvals or non-objections in connection with the Merger.

SECTION 6.02. No Prejudice. (a) The Parties agree that, if the new PWA does not become effective for the Merged Company Pilots or if the Merger is not consummated for any reason, this Agreement and the new PWA and any discussions, written or oral proposals or agreements or other communications (including any exchange of documents, exhibits and data) between each of them and their Representatives in connection with this Agreement or the new PWA shall be without prejudice to the position of any Party and shall not be referred to in any manner in any subsequent collective bargaining negotiation, nor in any grievance or any other legal proceeding regarding the interpretation, implementation, application or enforcement of the Existing Delta PWA or the Existing Northwest CBA , in each case, as in effect on the date hereof.

(b) This Section 6.02 shall survive the termination of this Agreement, including by consummation of the Merger, and is intended to benefit, and shall be enforceable by ALPA, the Delta MEC, the Northwest MEC and their respective successors and legal representatives.

SECTION 6.03. Fees and Expenses. Delta will (and will cause the Merged Company to) pay the reasonable fees and expenses incurred by each of the Delta MEC, the Northwest MEC, ALPA and the Initial Holder in connection with the negotiation of the Original TFA and this Agreement and the transactions contemplated thereby and hereby (other than any expenses relating to the Shelf Registration Statement and any Takedowns thereunder, which are covered by Exhibit A), whether or not the Pilot Equity Issuance is consummated, promptly upon notice of such amounts and not later than the earlier of (i) as soon as practicable after the Merger Agreement Effective Date and (ii) as soon as practicable after the termination of this Agreement; provided that (a) in no event shall Delta or the Merged Company be obligated to pay more than $12,000,000 (the “Reimbursement Cap”) in the aggregate pursuant to this Section 6.03 (or otherwise, but not including pursuant to Exhibit A) in respect of the fees and expenses of the Delta MEC, the Northwest MEC, ALPA and the Initial Holder, or (b) in no event shall Delta or the Merged Company be obligated to pay any amount if this Agreement is terminated pursuant to Section 8.01(a)(iv).

SECTION 6.04. Press Release. Each of the Parties agrees that they will consult with each other and provide each other with an opportunity to review the initial press release to be issued by any Party regarding this Agreement.

SECTION 6.05. Reasonable Best Efforts. To the extent required by law, each of the Parties agrees promptly after the date hereof to file any and all Notification and Report Forms required under the HSR Act with respect to the Pilot Equity Issuance and to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to the HSR Act. Each of the Parties shall use all reasonable best

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efforts to (1) cooperate in all respects with each other in connection with any filing or submission pursuant to the HSR Act and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (2) keep the other Parties reasonably informed of any communication received by such party from, or given by such party to, any U.S. Governmental Entity and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby; and (3) cooperate in all respects with each other in connection with any filings or submissions that may be required or appropriate in connection with the transactions contemplated hereby under any foreign Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition (the “Governmental Filings”).

SECTION 6.06. Proxy Statement; Stockholder Approval. (a) Delta shall prepare as promptly as practicable after the date of this Agreement the Proxy Statement in preliminary form (which shall be contained in an amended Registration Statement on Form S-4 filed with the SEC) and will provide ALPA, the Delta MEC and the Northwest MEC the reasonable opportunity to review and comment on such Proxy Statement in preliminary form and to have their comments on any descriptions of any of them or of the Pilot Equity Issuance contained therein reasonably considered, after which Delta shall mail to its stockholders at the earliest reasonably practicable date the definitive Proxy Statement.

(b) In accordance with applicable Law, the rules and regulations of the NYSE and Delta’s certificate of incorporation and bylaws, at the meeting of its stockholders convened for the purpose of obtaining stockholder approval of the Merger (the “Special Meeting”), Delta will also request the Requisite Stockholder Approval in connection with this Agreement. The Proxy Statement will include the recommendation of the Board of Directors of Delta of the Pilot Equity Issuance and the transactions contemplated thereby and Delta shall use its reasonable best efforts to obtain the Requisite Stockholder Approval.

SECTION 6.07. Pilot Directors. Each of the Parties agrees that (a) at or immediately prior to the Merger Agreement Effective Date, the Northwest MEC will cause the member of the Board of Directors of Northwest (the “Northwest Board”) who is a designee of the Northwest MEC to resign from the Northwest Board (effective no later than the Merger Agreement Effective Date), (b) effective as of the Merger Agreement Effective Date, except as otherwise provided herein, the right of the Northwest MEC to designate a member of the Northwest Board shall terminate and be of no further force or effect (and none of the Delta MEC, the Northwest MEC or ALPA shall attempt to exercise such right from and after the Merger Agreement Effective Date), and (c) if, on or after the Merger Agreement Effective Date, the Delta MEC and the Northwest MEC have not yet been replaced by the Merged Company MEC, then, until the Delta MEC and the Northwest MEC have been replaced by the Merged Company MEC, the Delta MEC and the Northwest MEC will jointly exercise the rights of the Delta MEC to appoint a Pilot Director pursuant to the Nomination Letter Agreement by agreeing on such Pilot Director by separate vote of each of the Delta MEC and the Northwest MEC or, if they prefer, by joint vote of both the Delta MEC and the Northwest MEC, pursuant to such procedures as they may determine, and the term “Delta MEC” for purposes of the Nomination Letter Agreement shall refer to the Delta MEC and the Northwest MEC (acting jointly if appropriate). Subject to the provisions of the Nomination Letter Agreement, each of Delta, the

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Delta MEC, the Northwest MEC and ALPA agrees that, on and after the Merger Agreement Effective Date, for purposes of the Nomination Letter Agreement only, (i) the term “Delta pilot” will include members of the Delta Pilot Group and the Northwest Pilot Group and (ii) the term “Delta MEC” will be deemed to include any successor thereto, including the Merged Company MEC when the Delta MEC and the Northwest MEC have been replaced by the Merged Company MEC. The Parties agree that so long as the initial Pilot Nominee (as defined in the Nomination Letter Agreement) continues to serve on the Board of Directors of Delta (or any Parent Company, as provided in the Nomination Letter Agreement), the rights and obligations under both the Nomination Letter Agreement and this Section 6.07 shall be deemed satisfied.

SECTION 6.08. Indemnity. Delta agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Delta MEC, the Northwest MEC, the Merged Company MEC, ALPA, the Initial Holder, the Designee and each of their respective Affiliates, members, officers, directors, employees, advisors and agents, including the members of the Merged Company Pilots (each, an “Indemnitee”) from and against any and all losses, suits, claims, damages, costs and expenses, including legal fees and expenses to the extent set forth below (each, a “Claim”), relating to or arising out of the execution, delivery and performance of the Merger Agreement, the Original TFA, this Agreement and the transactions contemplated thereby or hereby asserted or brought by one or more stockholders of Delta or Northwest in their capacities as such or by any employees of Delta or Northwest other than employees of Delta or Northwest represented by ALPA (except ALPA-represented employees of Delta or Northwest in their capacities as stockholders of Delta or Northwest); provided that Delta shall not be required to indemnify an Indemnitee hereunder to the extent such Claim results from the gross negligence or willful misconduct of any such Indemnitee or to the extent such Claim results from any material misstatement or omission in any information provided by or on behalf of any Indemnitee for filing with any governmental authority. Any Indemnitee entitled to indemnification hereunder shall give prompt written notice to Delta of any Claim with respect to which it seeks indemnification hereunder; provided that any delay or failure to so notify Delta shall relieve Delta of its obligations hereunder with respect to such Claim only to the extent that it is actually and materially prejudiced by such delay or failure. Delta shall have the right to assume and control the defense of any such Claim with counsel reasonably satisfactory to the Indemnitee; provided that Delta has not and is not contesting the Indemnitee’s rights to indemnification hereunder. The Indemnitee may select and employ separate counsel to participate in the defense of such Claim (which separate counsel shall be retained at the expense of the Indemnitee unless Delta shall have failed to assume the defense of such Claim within a reasonable period of time after notice of the Claim). If Delta assumes the defense of any such Claim, it shall have the right to settle such Claim without the consent of the Indemnitee so long as such settlement does not include any injunctive relief against an Indemnitee, and Delta shall not consent to the entry of a judgment or a settlement of any such Claim that does not include an unconditional release from all liability in respect of such Claim for the benefit of the Indemnitees without their prior written consent not to be unreasonably withheld.

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ARTICLE VII

CONDITIONS

SECTION 7.01. Conditions to Each Party’s Obligations. The respective obligations of the Parties to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Pilot Equity Issuance Date of the following conditions:

(a) No Injunctions or Restraints; Illegality. No order, injunction, decree or other legal restraint issued by any Governmental Entity of competent jurisdiction or other Law, rule or legal restraint shall be in effect preventing, restraining or rendering illegal the consummation of the Pilot Equity Issuance or the transactions contemplated hereby. No Governmental Entity shall have commenced and not withdrawn any proceeding seeking to enjoin, restrain or otherwise prohibit the Pilot Equity Issuance or the transactions contemplated hereby.

(b) Merger Agreement. The Merger contemplated by the Merger Agreement shall have become effective in accordance with the terms of the Merger Agreement (as in effect from time to time) and the Merger Agreement Effective Date shall have occurred.

(c) Ratification and Execution of the new PWA. Each of the Delta Pilot Group and the Northwest Pilot Group shall have separately ratified the new PWA and the new PWA shall have been signed by the parties thereto (including the president of ALPA) pursuant to Section 2.01(c).

(d) Delta Stockholder Approval. The Requisite Stockholder Approval shall have been obtained.

(e) Regulatory Consents. To the extent required by Law, any waiting period under the HSR Act applicable to the Pilot Equity Issuance shall have expired or early termination thereof shall have been granted and all required Governmental Filings shall have been made and any applicable waiting period thereunder shall have expired or approvals with respect thereto shall have been obtained.

SECTION 7.02. Conditions to Obligations of ALPA, the Delta MEC and the Northwest MEC. The obligation of ALPA, the Delta MEC and the Northwest MEC to effect the transactions contemplated hereby is also subject to the satisfaction, or waiver by each of the Delta MEC and the Northwest MEC, at or prior to the Pilot Equity Issuance Date, of the following conditions:

(a) Representations and Warranties. Each representation or warranty of Delta set forth in Article IV of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Pilot Equity Issuance Date as though made on and as of such date.

(b) Performance of Obligations of Delta. Delta shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Pilot Equity Issuance Date.

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SECTION 7.03. Conditions to Obligations of Delta. The obligation of Delta to effect the transactions contemplated hereby is also subject to the satisfaction or waiver by Delta at or prior to the Pilot Equity Issuance Date of the following conditions:

(a) Representations and Warranties. Each representation or warranty of ALPA, the Delta MEC and the Northwest MEC set forth in Article V of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Pilot Equity Issuance Date as though made on and as of such date.

(b) Performance of Obligations of ALPA, the Delta MEC and the Northwest MEC. ALPA, the Delta MEC and the Northwest MEC shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Pilot Equity Issuance Date.

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

SECTION 8.01. Termination. (a) This Agreement may be terminated by provision of written notice at any time prior to the Pilot Equity Issuance Date:

(i) by any Party, if the Merger Agreement is terminated;

(ii) by any Party, if the Merger Agreement Effective Date has not occurred by the twelve-month anniversary of the Announcement Date; provided that such date shall be extended to the eighteen-month anniversary of the Announcement Date to the extent but only to the extent the Outside Date (as defined in the Merger Agreement) is similarly extended to the eighteen-month anniversary of the Announcement Date in accordance with Section 7.1(b)(i) of the Merger Agreement;

(iii) by any Party, if any court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling, or taken any other action, restraining, enjoining or otherwise prohibiting any of the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and non-appealable;

(iv) by Delta, if there shall have been a material breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of ALPA, the Delta MEC or the Northwest MEC, which is not cured on or before the earlier of the Merger Agreement Effective Date and the 30th day following written notice to ALPA, the Delta MEC or the Northwest MEC, as the case may be; provided that Delta shall not have the right to terminate this Agreement pursuant to this Section 8.01(a)(iv) if Delta is then in material breach of any of its covenants or agreements contained in this Agreement.

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(v) by either the Delta MEC or the Northwest MEC, if there shall have been a material breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of Delta and which is not cured on or before the earlier of the Merger Agreement Effective Date and the 30th day following written notice to Delta; provided that the Delta MEC or the Northwest MEC, as the case may be, shall not have the right to terminate this Agreement pursuant to this Section 8.01(a)(v) if, in the case of the Delta MEC, either ALPA or the Delta MEC, and in the case of the Northwest MEC, either ALPA or the Northwest MEC, is then in material breach of any of its covenants or agreements contained in this Agreement.

(vi) by either the Delta MEC or the Northwest MEC, if the Special Meeting shall have been held and concluded and the Requisite Stockholder Approval was not obtained or if the Special Meeting has not been held by the twelve-month anniversary of the Announcement Date.

The Party desiring to terminate this Agreement pursuant to any of clauses (i) through (vi) of this Section 8.01(a) shall give written notice of such termination to the other Parties in accordance with Section 9.06, specifying the provision or provisions hereof pursuant to which such termination is effected.

(b) This Agreement will terminate automatically, without the need for written notice by any Party, if (x) on the date that is sixty (60) days after the date of this Agreement, the separate ratification of the new PWA by either the Delta Pilot Group or the Northwest Pilot Group has not occurred, or (y) on or prior to the date that is sixty (60) days after the date of this Agreement, a vote with respect to the ratification of the new PWA by the Delta Pilot Group or the Northwest Pilot Group shall have been taken but the requisite approval necessary to ratify the new PWA shall not have been obtained.

SECTION 8.02. Effect of Termination. If this Agreement is terminated pursuant to Section 8.01, then (a) this Agreement (except for the provisions of Section 2.03, 6.02, 6.03, 8.02, 8.03 and Article IX) and the new PWA (whether or not ratified or executed) shall forthwith become void and have no effect, without any liability on the part of any Party or its directors, officers, stockholders or members or other affiliates or related parties and (b) the Existing Delta PWA, the Existing Northwest CBA and the Original TFA, and the respective rights and obligations under each of them, shall remain in full force and effect in accordance with their terms as if this Agreement had never been entered into. Notwithstanding the foregoing, no Party shall be relieved or released from any liabilities or damages for any willful and material breach hereof.

SECTION 8.03. Fees and Expenses. Whether or not the Merger is consummated, except as otherwise specifically provided herein (including Section 6.03 and Exhibit A), all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses.

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SECTION 8.04. Amendment. This Agreement may not be amended, changed, supplemented or otherwise modified except by an instrument in writing signed on behalf of all of the Parties.

SECTION 8.05. Extension; Waiver; Remedies. (a) At any time prior to the termination of this Agreement, each Party hereto may (i) extend the time for the performance of any of the obligations or other acts of any other Party hereto, (ii) waive any inaccuracies in the representations and warranties contained herein by any other Party or in any document, certificate or writing delivered pursuant hereto by any other Party, or (iii) waive compliance by any other Party with any of the agreements or conditions contained herein. Any agreement on the part of any Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party against which such waiver or extension is to be enforced.

(b) The failure of any Party hereto to exercise any rights, power or remedy provided under this Agreement, or to insist upon compliance by any other Party hereto with its obligations hereunder, and any custom or practice of the Parties at variance with the terms hereof, shall not constitute a waiver by such Party of its right to exercise any such or other right, power or remedy or to demand such compliance.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Representations and Warranties. The representations and warranties made in Articles III and IV or any instrument delivered pursuant to this Agreement shall not survive beyond the Merger Agreement Effective Date. Each covenant or agreement of the Parties in this Agreement shall not survive beyond the Merger Agreement Effective Date, other than any covenant or agreement that by its terms contemplates performance after the Merger Agreement Effective Date.

SECTION 9.02. Entire Agreement; Assignment. Subject to Sections 2.03 and 8.02 hereof, this Agreement, together with any Exhibits and Schedules hereto, the new PWA and the Ancillary TFA constitute the entire agreement between the Parties with respect to the terms and conditions under which ALPA, the Delta MEC and the Northwest MEC have agreed to participate in the Pilot Equity Issuance and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to such terms and conditions. The Agreement shall not be assigned by any Party by operation of Law or otherwise without the prior written consent of the other Parties.

SECTION 9.03. Jurisdiction; Venue. Each of the Parties hereto (a) consents to submit itself to the personal jurisdiction of any federal court located in the State of Delaware or the Court of Chancery of the State of Delaware in and for New Castle County Delaware, in the event any dispute arises out of this Agreement or any transaction contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement or any transaction contemplated by this Agreement in any court other

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than any such court, (d) agrees that this Agreement will not be subject to the grievance and/or System Board of Adjustment procedures of the Existing Delta PWA, the Existing Northwest CBA or the new PWA, as each may be amended, and (e) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any transaction contemplated by this Agreement. The Parties irrevocably and unconditionally waive any objection to the laying of venue of any proceeding arising out of this Agreement or the transactions contemplated hereby in any such court, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such proceeding brought in any such court has been brought in an inconvenient forum.

SECTION 9.04. Validity; Specific Performance. (a) If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any Law or public policy in any jurisdiction, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect and shall not be affected thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced in any jurisdiction, this Agreement will be reformed, construed and enforced in such jurisdiction so as to effect the original intent of the Parties as closely as possible to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

(b) The Parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement were not performed by any Party in accordance with the terms hereof and that, prior to the termination of this Agreement pursuant to Article VIII, any Party shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

SECTION 9.05. Capacity of the Delta MEC and the Northwest MEC. Notwithstanding anything to the contrary contained herein, each of the Delta MEC and the Northwest MEC are executing this Agreement in their capacities as the governing bodies of the Delta Pilot Group and the Northwest Pilot Group, respectively, and the obligations contained herein of the Delta MEC and the Northwest MEC are obligations only of such governing bodies, and shall not be deemed to bind any members of the Delta MEC or the Northwest MEC or any committees thereof acting in their capacity as individuals or local council representatives.

SECTION 9.06. Notices. All notices, requests, claims, demands and other communications hereunder shall be given (and shall be deemed to have been duly received if given) by hand delivery in writing or by facsimile transmission with confirmation of receipt or by recognized overnight courier service, as follows:

if to Delta:

Delta Air Lines, Inc.

1030 Delta Boulevard

Law Dept. 981

P.O. Box 20574

Atlanta, Georgia 30320-2574

Attention: General Counsel

Facsimile: 404.715.7882

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with a copy to, which shall not constitute notice:

Wachtell, Lipton, Rosen & Katz

51 W. 52^nd Street

New York, NY 10019

Attention: Lawrence S. Makow, Esq.

                    Stephanie J. Seligman, Esq.

Facsimile: 212.403.2000

if to the Delta MEC:

Delta MEC

100 Hartsfield Centre Parkway

Suite 200

Atlanta, GA 30354

Attention: Captain Lee Moak

Facsimile: 404.763.5189

with a copy to, which shall not constitute notice:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Robert P. Davis, Esq.

Facsimile: 212.225.3999

if to the Northwest MEC:

NWA Master Executive Council

7900 International Drive

Suite 850

Bloomington, MN 55425

Attention: Captain Dave Stevens

Facsimile: 952.854.3324

with a copy to, which shall not constitute notice:

Curtis, Mallet-Prevost, Colt & Mosle LLP

101 Park Avenue

New York, NY 10178

Attention: Daniel R. Lenihan, Esq.

Facsimile: 212.697.1559

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if to ALPA:

Air Line Pilots Association, Int’l

1625 Massachusetts Ave NW

Washington, DC 20036

Attention: Jonathan Cohen

Facsimile: 202.797.4014

with a copy to, which shall not constitute notice:

Cohen, Weiss and Simon LLP

330 West 42^nd Street

25^th Floor

New York, NY 10036

Attention: Michael E. Abram

Facsimile: 646.473.8208

or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

SECTION 9.07. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and to be performed entirely within that State.

SECTION 9.08. Descriptive Headings. The descriptive headings herein (including the Exhibits) are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

SECTION 9.09. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and their successors, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement except as provided in Exhibit A and Section 6.08.

SECTION 9.10. Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

SECTION 9.11. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its officers thereunto duly authorized, all at or on the day and year first above written.

DELTA AIR LINES, INC.	AIR LINE PILOTS ASSOCIATION, INTERNATIONAL
/s/ Richard H. Anderson Richard H. Anderson Chief Executive Officer	/s/ Captain John H. Prater Captain John H. Prater President
/s/ Edward H. Bastian Edward H. Bastian President and Chief Financial Officer
/s/ Stephen E. Gorman Stephen E. Gorman Executive Vice President – Operations
/s/ Michael H. Campbell Michael H. Campbell Executive Vice President – Human Resources, Labor Relations & Communications
WITNESS:
/s/ Captain Steve Dickson Captain Steve Dickson Senior Vice President – Flight Operations
/s/ Geraldine P. Carolan Geraldine P. Carolan Vice President – Labor Relations
/s/ Robert L. Kight Robert L. Kight Vice President – Compensation & Benefits

DELTA MASTER EXECUTIVE COUNCIL	NORTHWEST MASTER EXECUTIVE COUNCIL
/s/ Captain Lee Moak Captain Lee Moak Chairman, Delta MEC	/s/ Captain Dave Stevens Captain Dave Stevens Chairman, Northwest MEC
WITNESS:	WITNESS:
/s/ Captain Tim O’Malley Captain Tim O’Malley Chairman, Delta MEC Negotiating Committee	/s/ Captain John L. Haase Captain John L. Haase Chairman, Northwest MEC Negotiating Committee
/s/ Captain Rick Dominguez Captain Rick Dominguez Delta MEC Negotiating Committee	/s/ Captain James L. Van Sickle Captain James L. Van Sickle Northwest MEC Negotiating Committee
/s/ Captain Randy Worrall Captain Randy Worrall Delta MEC Negotiating Committee	/s/ Captain Daniel J. Vician Captain Daniel J. Vician Northwest MEC Negotiating Committee
	/s/ Captain Ronald Hay Jr. Captain Ronald Hay, Jr. Northwest MEC Negotiating Committee

[Signature Page to Transaction Framework Agreement]

Exhibit A

REGISTRATION RIGHTS PROCEDURES

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. Notwithstanding any term that is otherwise defined in the Transaction Framework Agreement to which this is an Exhibit, the following terms shall have the following meanings as used in this Exhibit (capitalized terms used in this Exhibit but not otherwise defined in this Exhibit shall have the meanings ascribed to such terms in the Transaction Framework Agreement):

“Affiliate” has the meaning specified in Rule 12b-2 under the Exchange Act; provided, that the Initial Holder shall not be deemed an Affiliate of the Company or any of its subsidiaries for purposes of this Exhibit.

“Board” means the board of directors of the Company.

“Business Day” means any day, other than a Saturday, Sunday or a day on which banking institutions in the City of New York, New York are authorized or obligated by law or executive order to close.

“Company” means the Merged Company and shall include the Company’s successors by merger, acquisition, reorganization, conversion or otherwise.

“Exhibit” means this Exhibit A.

“FINRA” means the Financial Industry Regulatory Authority.

“Loss” or “Losses” has the meaning specified in Section 2.04(a).

“Person” means an individual, corporation, association, limited liability company, limited liability partnership, partnership, estate, trust, joint venture, unincorporated organization or a government or any agency or political subdivision thereof.

“Prospectus” means the prospectus included in any Shelf Registration Statement, all amendments and supplements to such prospectus, including pre- and post-effective amendments to such Shelf Registration Statement, and all other material incorporated by reference in such prospectus.

“Registrable Securities” means any Pilot Shares held by, or to be issued pursuant to the Transaction Framework Agreement to, the Initial Holder; provided, that any such Registrable Securities shall cease to be Registrable Securities to the extent a Registration Statement with respect to the sale of such Registrable Securities has become effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such Registration Statement.

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“Registration” means a registration with the SEC of the Company’s securities for offer and sale to the public under a Registration Statement. The terms “Register” and “Registered” shall have a correlative meaning.

“Registration Expenses” has the meaning specified in Section 2.03.

“Registration Period” has the meaning specified in Section 2.01(b).

“Registration Statement” means any registration statement of the Company filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

“Representatives” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants, equity financing partners or financial advisors or other Person associated with, or acting on behalf of, such Person.

“Shelf Registration Suspension” has the meaning specified in Section 2.01(c).

“Underwritten Offering” means a Registration in which securities of the Company are sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public.

ARTICLE II

REGISTRATION RIGHTS

SECTION 2.01 Participation in Shelf Registration.

(a) Shelf Registration Statement. Subject to Section 3.01(d) of the Transaction Framework Agreement, upon request by the Designee, the Company shall file a Shelf Registration Statement under the Securities Act with respect to an offering of the Registrable Securities and use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Securities Act as soon as practicable after the Merger Agreement Effective Date (or, if the Company qualifies to do so, it shall file an automatic Shelf Registration Statement on the Merger Agreement Effective Date) to permit the Prospectus forming a part thereof to be usable by the Initial Holder during the Registration Period. The Shelf Registration Statement shall provide for the resale of all Registrable Securities held by the Initial Holder (or such lesser amount as shall be requested by the Designee).

(b) Effective Registration. The Company shall be deemed to have effected a Shelf Registration Statement if such Shelf Registration Statement has become effective and remains effective for the lesser of (i) one year or (ii) such shorter period as shall terminate when all Registrable Securities covered by such Shelf Registration Statement have been sold or withdrawn (the applicable period, subject to Section 2.02(a)(xvi) and Section 2.02(c) hereof, the “Registration Period”). No Takedown shall be deemed to have occurred if (i) during the

A-2

Registration Period such Takedown is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court or (ii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with any Takedown are not satisfied other than by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement by the Initial Holder. Subject to Section 2.01(c), the Company shall not be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the Registration Period if the Company voluntarily takes any action or omits to take any action that would result in the Initial Holder not being able to offer and sell Registrable Securities pursuant to such Shelf Registration Statement during the Registration Period as provided herein, unless such action or omission is required by applicable law.

(c) Delay in Filing; Suspension of Registration. Anything in the Transaction Framework Agreement or this Exhibit notwithstanding, the Company shall be entitled to, upon giving prompt written notice of such suspension to the Initial Holder and the Designee, suspend use of the Shelf Registration Statement (a “Shelf Registration Suspension”) for reasonable periods of time, but in no event for more than an aggregate of seventy-five (75) days during any 12-month period, if the Company has determined that the continued use of the Shelf Registration Statement would require the Company to disclose material non-public information that (x) would (i) in the reasonable good faith judgment of the Company’s General Counsel, impede, delay or otherwise interfere with any pending or contemplated material acquisition, corporate reorganization or other similar material transaction involving the Company (not including the Merger as defined in the Transaction Framework Agreement) or (ii) based upon written advice from the Company’s investment banker or financial advisor, adversely affect any material pending or contemplated financing, offering or sale of any class of securities by the Company, or (y) (i) would be required to be made in any Shelf Registration Statement or report filed with the SEC by the Company so that such Shelf Registration Statement or report would not be materially misleading, (ii) would not be required to be made at such time but for the filing or effectiveness of such Shelf Registration Statement, and (iii) would have a material adverse effect on the Company or its business. Upon notice by the Company to the Initial Holder and the Designee of any such determination, the Initial Holder and the Designee shall keep the fact of any such notice strictly confidential and, during the Shelf Registration Suspension (or until such Shelf Registration Suspension shall be earlier terminated in writing by the Company), suspend use of the applicable Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities covered by such Shelf Registration Statement and promptly halt any offer, sale or trading of any Registrable Securities covered by such Shelf Registration Statement for the duration of the Shelf Registration Suspension set forth in such notice (or until such Shelf Registration Suspension shall be earlier terminated in writing by the Company). For purposes of clarity, it is understood that no Takedown shall be deemed to have occurred if such Takedown does not occur due to a Shelf Registration Suspension. The Company shall immediately notify the Initial Holder and the Designee upon the termination of any Shelf Registration Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the Initial Holder and the Designee such numbers of copies of the Prospectus as so amended or supplemented as the Initial Holder and the Designee may reasonably request. The Company shall, if necessary, supplement or make amendments to the Shelf Registration Statement, if required by the registration form used by the Company for the Shelf Registration or by the instructions applicable to such registration form or by the Securities Act or as may reasonably be requested by the Designee.

A-3

(d) Underwritten Secondary Resale. In connection with any Underwritten Offering, the Designee shall select the managing underwriter or underwriters for such offering of Registrable Securities; provided that such managing underwriter shall be a nationally recognized investment-banking firm and shall be reasonably acceptable to the Company. The Designee shall determine the pricing of the Registrable Securities offered pursuant to any such Shelf Registration Statement, the applicable underwriting discount and other financial terms and determine the timing of any Takedowns under such Shelf Registration Statement.

SECTION 2.02 Registration Procedures.

(a) In connection with the Company’s Registration obligations under Section 2.01 of this Exhibit, the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as promptly as reasonably practicable, and in connection therewith the Company shall, subject to Section 2.03 of this Exhibit:

(i) Prepare and file with the SEC a Registration Statement or Registration Statements on Form S-3 or successor form thereto, and use its reasonable best efforts to cause such Shelf Registration Statement to become effective and to remain effective as provided herein; provided, that before filing a Shelf Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall furnish or otherwise make available to the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters, and such other documents reasonably requested by the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters, including any comment letters from the SEC, and, if requested by the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters, provide the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors. The Company shall not file any such Shelf Registration Statement or Prospectus or any amendments or supplements thereto (including such documents that, upon filing, would be incorporated or deemed to be incorporated by reference therein) with respect to any Registration pursuant to Section 2.01 of this Exhibit to which the Designee, the Initial Holder, its counsel, or the underwriter(s), if any, shall reasonably object, in writing, on a timely basis, unless, in the reasonable opinion of the Company, such filing is necessary to comply with applicable law;

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(ii) prepare and file with the SEC such pre- and post-effective amendments to such Shelf Registration Statement, supplements or amendments to the Prospectus as may be (A) reasonably requested by the Designee or (B) necessary to keep such Registration effective for the period of time required by this Exhibit, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Shelf Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Shelf Registration Statement;

(iii) notify the Designee and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Shelf Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable Prospectus, and any amendment or supplement to such Prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Shelf Registration Statement, such Prospectus, or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Shelf Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, and (d) with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) promptly notify the Designee and the underwriter(s), if any, when the Company becomes aware of the happening of (A) the representations and warranties of the Company in any applicable underwriting agreement ceasing to be true and correct in all material respects and (B) any event as a result of which the applicable Shelf Registration Statement or Prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus or any preliminary Prospectus, in light of the circumstances under which they were made) not misleading, or, if for any other reason it shall be necessary to amend or supplement such Shelf Registration Statement or Prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the Designee and the managing underwriter or underwriters, if any, an amendment or supplement to such Shelf Registration Statement or Prospectus which shall correct such misstatement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent, or obtain the withdrawal of as promptly as possible, any stop order or other order or notice preventing or suspending the use of any preliminary or final Prospectus;

(vi) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters and the Designee agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

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(vii) furnish to the Designee, the Initial Holder and each underwriter, if any, without charge, as many conformed copies as the Designee, the Initial Holder or underwriter may reasonably request of the applicable Shelf Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference), and such other documents, as the Designee, the Initial Holder or such managing underwriter or underwriters may reasonably request, and upon request a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other Governmental Entity relating to such offering;

(viii) deliver to the Designee, the Initial Holder and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto, and such other documents as the Designee, the Initial Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by the Initial Holder or underwriter, it being understood that the Company consents to the use of such Prospectus or any amendment or supplement thereto by the Designee, the Initial Holder and the underwriter(s), if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto;

(ix) on or prior to the date on which the applicable Shelf Registration Statement becomes effective, use its reasonable best efforts to register or qualify, and cooperate with the Designee, the Initial Holder, the managing underwriter or underwriters, if any, and their respective counsel, in connection with the Registration or qualification (or exemption from such Registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of each state and other jurisdiction of the United States as the Designee, the Initial Holder or managing underwriter or underwriters, if any, or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such Registration or qualification in effect for such period as required by Section 2.01(b) of this Exhibit; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;

(x) cooperate with the Designee, the Initial Holder and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriter or underwriters may request at least two (2) Business Days prior to any sale of Registrable Securities to the underwriter(s);

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(xi) use its reasonable best efforts to cause the Registrable Securities covered by the applicable Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Designee, the Initial Holder or the underwriter(s), if any, to consummate the disposition of such Registrable Securities;

(xii) not later than the effective date of the applicable Shelf Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company;

(xiii) make such representations and warranties to the Initial Holder and the underwriters or agents, if any, in form, substance and scope as are customarily made by Company in secondary underwritten public offerings;

(xiv) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the Designee, the Initial Holder or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the Registration and disposition of such Registrable Securities;

(xv) obtain for delivery to the Designee, the Initial Holder and to the underwriter(s), if any, an opinion or opinions from counsel for the Company dated the effective date of the Shelf Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinion or opinions shall be reasonably satisfactory to the Initial Holder or underwriters, as the case may be, and their respective counsel;

(xvi) in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Designee, the Initial Holder, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement; provided that if such cold comfort letters are not provided or such independent certified public accounts are not able to bring down such cold comfort letters to the closing under such underwriting agreement (other than during a Shelf Registration Suspension), then (A) no Takedown shall have been deemed to have occurred until and unless such cold comfort letter is provided and brought down to the closing under such underwriting agreement and (B) the Registration Period will be extended by the number of days equal to the number of days between the date on which any such cold comfort letter is requested to be issued or brought down and the date on which such cold comfort letter is eventually issued or brought down;

(xvii) use its reasonable best efforts to comply with all applicable securities laws and make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

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(xviii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Shelf Registration Statement from and after a date not later than the effective date of such Shelf Registration Statement;

(xix) deliver such documents and certificates as may be reasonably requested by the Designee, the Initial Holder, its counsel and the managing underwriter or underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to this Exhibit and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company (the above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder);

(xx) cause all Registrable Securities covered by the applicable Shelf Registration Statement to be listed on each securities exchange on which any of the Company’s securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s securities are then quoted;

(xxi) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by the Designee, the Initial Holder, by any underwriter participating in any disposition to be effected pursuant to such Shelf Registration Statement and by any attorney, accountant or other agent retained by the Designee, the Initial Holder or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the its officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Shelf Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; provided, that any such Person gaining access to information regarding the Company pursuant to this Section 2.02(a)(xxi) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that it determines in good faith to be confidential, and of which determination such Person is notified, unless (w) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (x) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (y) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (z) such information is independently developed by such Person;

(xxii) take no action prohibited by Regulation M under the Exchange Act;

(xxiii) use its reasonable best efforts to cause the Registrable Securities covered by the applicable Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities;

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(xxiv) promptly after the issuance of an earnings release or upon the request of the Designee or Initial Holder, prepare a current report on Form 8-K with respect to such earnings release or a matter of disclosure as requested by the Designee or Initial Holder and file such Form 8-K with the SEC; and

(xxv) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities.

(b) The Company may require the Initial Holder to furnish to the Company such information regarding the distribution of such securities and such other information relating to it and its ownership of Registrable Securities as the Company may from time to time reasonably request in writing, and the Company may exclude from such Registration the Registrable Securities of the Initial Holder if it unreasonably fails to furnish such information within a reasonable time after receiving such request. The Designee will cause the Initial Holder to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Exhibit.

(c) The Designee agrees to cause the Initial Holder, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.01(c), to forthwith discontinue disposition of Registrable Securities pursuant to such Shelf Registration Statement until the Designee’s or Initial Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 2.01(c), or until the Designee is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus or any amendments or supplements thereto and if so directed by the Company, the Designee will cause the Initial Holder to deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in the Designee’s or Initial Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period during which the applicable Shelf Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when the Initial Holder either receives the copies of the supplemented or amended Prospectus contemplated by Section 2.01(c) or the Designee is advised in writing by the Company that the use of the Prospectus may be resumed.

(d) If any Registration Statement or comparable statement under the “Blue Sky” laws refers to the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC by name or otherwise as the holder of any securities of the Company, then the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC, as the case may be, shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC, as the case may be, and the Company, to the effect that the holding by the Initial Holder of such securities is not to be construed as a recommendation by the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC of the investment quality of the Company’s securities covered thereby and that such holding does not imply that the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC will assist in meeting any future financial requirements of the Company, or (ii)

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in the event that such reference to the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC by name or otherwise is not in the judgment of the Company, as advised by counsel, required by the Securities Act or any similar federal statute or any “Blue Sky” or securities law then in force, the deletion of the reference to the Initial Holder, ALPA, the Delta MEC, the Northwest MEC or the Merged Company MEC.

(e) No Inconsistent Agreements; Additional Rights. The Company represents and warrants that it has not granted and is not a party to any proxy, voting trust or other agreement that is inconsistent with or conflicts with any provision of this Exhibit. The Company shall not hereafter enter into any agreement with respect to its securities that is inconsistent with or conflicts with the rights granted to the Designee or Initial Holder by this Exhibit.

SECTION 2.03 Registration Expenses. Anything to the contrary in the Transaction Framework Agreement or this Exhibit to the contrary notwithstanding, all expenses incident to the Company’s performance of or compliance with this Exhibit shall be paid by the Company, including (i) all registration and filing fees, and any other reasonable fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses in connection with compliance with any securities or “Blue Sky” laws, (iii) all reasonable printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incident to such performance), (v) reasonable Securities Act liability insurance or similar insurance if the Company so desires or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the Registrable Securities on any inter-dealer quotation system, (vii) all reasonable fees and customary disbursements of legal counsel selected by the Initial Holder (whether such counsel is selected by the Initial Holder or by the Designee on behalf of the Initial Holder) in connection with such Registration, (viii) all fees and expenses of any special experts or other Persons retained by the Company in connection with any Registration, and (ix) all internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties). All such expenses are referred to herein as “Registration Expenses.” The Company shall not be required to pay underwriting or similar discounts, commissions or fees or transfer taxes, if any, attributable to the sale of Registrable Securities.

SECTION 2.04 Indemnification.

(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Delta MEC, the Northwest MEC, the Merged Company MEC, ALPA, the Initial Holder, the Designee, the Delta Pilot Group, the Northwest Pilot Group, each of their respective Affiliates, members, officers, directors, employees, advisors, and agents and each Person who controls (within the meaning of the Securities Act or the Exchange Act) such Persons and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses, joint or several (including reasonable costs of investigation and legal expenses)

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(each, a “Loss” and collectively “Losses”) arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Shelf Registration Statement under which such Registrable Securities were Registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or any other disclosure document produced by or on behalf of the Company or any of its subsidiaries including, without limitation, reports and other documents filed under the Exchange Act, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus in light of the circumstances under which they were made) not misleading or (iii) any actions or inactions or proceedings in respect of the foregoing whether or not such indemnified party is a party thereto; provided, that the Company shall not be liable to any particular indemnified party (A) to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such Registration Statement or other document in reliance upon and in conformity with written information furnished to the Company by such indemnified party expressly for use in the preparation thereof or (B) to the extent that any such Loss arises out of or is based upon an untrue statement or omission in a preliminary Prospectus relating to Registrable Securities, if a Prospectus (as then amended or supplemented) that would have cured the defect was furnished to the indemnified party from whom the Person asserting the claim giving rise to such Loss purchased Registrable Securities at least five (5) days prior to the written confirmation of the sale of the Registrable Securities to such Person and a copy of such Prospectus (as amended and supplemented) was not sent or given by or on behalf of such indemnified party to such Person at or prior to the written confirmation of the sale of the Registrable Securities to such Person. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Initial Holder or any indemnified party and shall survive the transfer of such securities by the Initial Holder. The Company shall also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the indemnified parties.

(b) Indemnification by the Initial Holder. ALPA will cause the Initial Holder to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act or the Exchange Act) from and against any Losses resulting from (i) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were Registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein), or (ii) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, in each case, to the extent, but only to the extent, that such untrue statement or omission is contained in any information furnished in writing by ALPA, the Initial Holder, the Delta MEC, the Northwest MEC or the Merged Company MEC, as the case may be, to the Company specifically for inclusion in such Registration Statement and has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the

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Person asserting the claim. In no event shall the liability of the Initial Holder hereunder be greater in amount than the dollar amount of the net proceeds received by the Initial Holder under the sale of Registrable Securities giving rise to such indemnification obligation less any amounts paid by the Initial Holder pursuant to Section 2.04(d). The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above (with appropriate modification) with respect to information furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement.

(c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the indemnifying party has agreed in writing to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person, (C) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, or (D) in the reasonable judgment of any such Person entitled to indemnification hereunder (based upon advice of its counsel) a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person entitled to indemnification hereunder notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If the indemnifying party assumes the defense, the indemnifying party shall have the right to settle such action without the consent of the Person entitled to indemnification hereunder as long as such settlement is only of a monetary nature and does not include any injunctive relief against the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Person entitled to indemnification hereunder of an unconditional release from all liability in respect to such claim or litigation without the prior written consent of such Person. If such defense is not assumed by the Person entitled to indemnification hereunder, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent. It is understood that the indemnifying party or parties shall not, except as specifically set forth in this Section 2.04(c), in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements or other charges of more than one separate firm admitted to practice in such jurisdiction at any one time unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties, (y) a Person entitled to indemnification hereunder has reasonably concluded (based on the advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the other indemnified parties or (z) a

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conflict or potential conflict exists or may exist (based upon advice of counsel to a Person entitled to indemnification hereunder) between such Person entitled to indemnification hereunder and any other Persons entitled to indemnification hereunder, in each of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.

(d) Contribution. If for any reason the indemnification provided for in paragraphs (a) and (b) of this Section 2.04 is unavailable to a Person entitled to indemnification hereunder (other than as a result of exceptions contained in paragraphs (a) and (b) of this Section 2.04) or insufficient in respect of any Losses referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the Person entitled to indemnification hereunder as a result of such Loss (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the Person or Persons entitled to indemnification hereunder on the other hand in connection with the acts, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and the Person or Persons entitled to indemnification hereunder on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the Person or Persons entitled to indemnification hereunder and such parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 2.04(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 2.04(d). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by a Person entitled to indemnification hereunder as a result of the Losses referred to in Section 2.04(a) and Section 2.04(b) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.04(d), in connection with any Registration Statement filed by the Company, the Initial Holder shall not be required to contribute any amount in excess of the dollar amount of the net proceeds received by the Initial Holder under the sale of Registrable Securities giving rise to such contribution obligation less any amounts paid by the Initial Holder pursuant to Section 2.04(b). If indemnification is available under this Section 2.04, the indemnifying parties shall indemnify each Person entitled to indemnification hereunder to the full extent provided in Section 2.04(a) and Section 2.04(b) hereof without regard to the provisions of this Section 2.04(d). The remedies provided for in this Section 2.04 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Person entitled to indemnification hereunder at law or in equity.

SECTION 2.05 Rules 144 and 144A and Regulation S. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act (or, if the Company is not required to file such reports, it will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rules 144, 144A or Regulation S under the Securities Act), and it will take any such further action as

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reasonably requested, all to the extent required from time to time to enable the Initial Holder to sell Registrable Securities without Registration under the Securities Act within the limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S under the Securities Act, as such Rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the reasonable request of the Initial Holder, the Company will deliver to the Initial Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof.

ARTICLE III

MISCELLANEOUS

SECTION 3.01 Term. This Exhibit shall terminate when there are no Registrable Securities, except for the provisions of Section 2.04 and all of this Article III, which shall survive any such termination.

SECTION 3.02 Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damage that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled (in addition to any other remedy to which it may be entitled in law or in equity) to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Exhibit, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

SECTION 3.03 Attorneys’ Fees. In any action or proceeding brought to enforce any provision of this Exhibit or where any provision hereof is validly asserted as a defense, the successful party shall, to the extent permitted by applicable law, be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.

SECTION 3.04 Notices. Unless otherwise specified herein, all notices, consents, approvals, designations, requests, waivers, elections and other communications authorized or required to be given pursuant to this Exhibit shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by personal hand-delivery, by facsimile transmission, by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery, sent to the Person at the address given for such Person in the Transaction Framework Agreement or such other address as such Person may specify by notice to the Company.

SECTION 3.05 Successors, Assigns and Transferees. Neither this Exhibit nor any right or obligation hereunder is assignable in whole or in part by any party without the prior written consent of the other party hereto.

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SECTION 3.06 Binding Effect. Except as otherwise provided in this Exhibit, the terms and provisions of this Exhibit shall be binding on and inure to the benefit of each of the parties hereto and their respective successors.

SECTION 3.07 Third Parties. Nothing in this Exhibit, express or implied, is intended or shall be construed to confer upon any Person not a party hereto (other than each other Person entitled to indemnity or contribution under Section 2.04) any right, remedy or claim under or by virtue of this Exhibit.

SECTION 3.08 Transaction Framework Provisions. The provisions of Sections 9.03 and 9.07 of the Transaction Framework Agreement are incorporated by reference herein.

SECTION 3.09 Severability. If any provision of this Exhibit shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 3.10 Waiver. The waiver by any party hereto of a breach of any provision of this Exhibit shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

A-15

EX-15

Exhibit 15

July 16, 2008

To the Board of Directors and Shareowners of

Delta Air Lines, Inc.

We are aware of the incorporation by reference in the Registration Statement (Form S-8 No.’s 333-142424 and 333-149308) of Delta Air Lines, Inc. for the registration of shares of its common stock of our reports dated April 24, 2008 and July 16, 2008 relating to the unaudited condensed consolidated interim financial statements of Delta Air Lines, Inc. that are included in its Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008.

/s/ Ernst & Young LLP

EX-31.1

Exhibit 31.1

I, Richard H. Anderson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2008;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;

4. Delta’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of Delta’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in Delta’s internal control over financial reporting that occurred during Delta’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta’s internal control over financial reporting; and

5. Delta’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta’s auditors and the Audit Committee of Delta’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta’s internal control over financial reporting.

Date: July 17, 2008	/s/ Richard H. Anderson
	Richard H. Anderson
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Edward H. Bastian, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2008;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;

4. Delta’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of Delta’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in Delta’s internal control over financial reporting that occurred during Delta’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta’s internal control over financial reporting; and

5. Delta’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta’s auditors and the Audit Committee of Delta’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta’s internal control over financial reporting.

Date: July 17, 2008	/s/ Edward H. Bastian
	Edward H. Bastian
	President and Chief Financial Officer

EX-32

Exhibit 32

July 17, 2008

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Ladies and Gentlemen:

The certifications set forth below are hereby submitted to the Securities and Exchange Commission pursuant to, and solely for the purpose of complying with, Section 1350 of Chapter 63 of Title 18 of the United States Code in connection with the filing on the date hereof with the Securities and Exchange Commission of the Quarterly Report on Form 10-Q of Delta Air Lines, Inc. (“Delta”) for the quarterly period ended June 30, 2008 (the “Report”).

Each of the undersigned, the Chief Executive Officer and the President and Chief Financial Officer, respectively, of Delta, hereby certifies that, as of the end of the period covered by the Report:

1. such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta.

/s/ Richard H. Anderson

Name: Richard H. Anderson

Chief Executive Officer

/s/ Edward H. Bastian

Name: Edward H. Bastian

President and Chief Financial Officer