News and Notes From Delta's 10-K

Delta put out its latest 10-K this week, so I thought I'd pick through it and point out some highlights (or lowlights, as the case may be).

• Continental has told the airline that it will end its marketing alliance with Delta on July 31, 2009 and with Northwest on April 14, 2009. We knew this was coming with Continental's impending move to Star Alliance, but I don't remember seeing firm dates before.
• Last year, 23 percent of Delta's revenue came from its agreements with regional carriers.
• I know the whole fuel issue has been beaten to death, but just as a reminder, Delta paid $3.16 a gallon in 2008 up from $2.24 the year prior.
• Most obvious statement of the year award: "The integration of Delta and NWA workforces will be challenging in part because approximately 80% of the pre-merger Northwest employees are represented by labor unions while, among U.S. based pre-merger Delta employees, only the Delta pilots and flight dispatchers (who combined constitute approximately 17% of the total pre-merger Delta employees) are represented by labor unions." No doubt.
• The combined airline currently has a whopping 1,023 aircraft of which they own about two-thirds. The average age of their fleet is 13.2 years, but that drops to 11.5 years if you remove the 71 ancient DC-9s with an average age of 35.2 years.
• You've probably heard about this elsewhere, but Delta has removed the 787 from its fleet order list. They say, "We have excluded from the table above our order of 18 B-787-8 aircraft. The Boeing Company ("Boeing") has informed us that Boeing will be unable to meet the contractual delivery schedule for these aircraft. We are in discussions with Boeing regarding this situation." I'm not as convinced as others that this means the end of the Delta 787 order. This could be an effort to push Boeing to get its act together here. It should be noted that the 787 options remained on the list.
• "We believe that we will recognize $500 million in synergy benefits in 2009, primarily in the second half of the year. Our ability to realize the synergies will depend, among other things, on our successfully aligning technologies of the two airlines, receiving a single operating certificate and resolving labor representation differences while maintaining productive employee relations." That's a lot of "ifs" if you ask me.