dal-20191231

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 o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Statements in this Form 10-K (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. Known material risk factors applicable to Delta are described in "Risk Factors Relating to Delta" and "Risk Factors Relating to the Airline Industry" in "Item 1A. Risk Factors" of this Form 10-K, other than risks that could apply to any issuer or offering. 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.

We are the leading U.S. global airline serving 200 million customers every year. We connect customers across our expansive global network to more than 300 destinations in over 50 countries. We are the world’s largest airline by total revenues and the most profitable with five consecutive years of $5 billion or more in pre-tax income.

We are committed to industry-leading safety and reliability and are consistently among the industry’s best performers. Our employees provide world-class travel experiences for our customers and give back to the communities where they live, work and serve. Our people and service are our strongest competitive advantage creating significant customer satisfaction improvements. Other key competitive advantages include operational reliability, our global network, customer loyalty and our investment grade balance sheet.

We have diversified revenue streams beyond the basic sale of an airline ticket in order to reduce the impact of cyclicality on our results. Our growing partnership with American Express provides a co-brand revenue stream tied to broader consumer spending. Our focus in recent years on premium products and customer segmentation has enhanced our revenue growth and reduced reliance on the most price sensitive customer segment. We also maintain complementary portfolio businesses, such as our Maintenance, Repair and Overhaul (“MRO”) division, where we are well positioned for significant organic growth through contractual agreements with jet engine manufacturers.

We are incorporated under the laws of the State of Delaware. Our principal executive offices are located at Hartsfield- Jackson Atlanta International Airport in Atlanta, Georgia. Our telephone number is (404) 715-2600 and our internet address is www.delta.com. Information contained on our website is not part of, and is not incorporated by reference in, this Form 10-K.

We have the world’s most valuable airline brand, one that is mentioned not just among the best global airlines, but also alongside top consumer brands. Over the last decade, we significantly improved the quality and reliability of our operations. As a result, customer satisfaction scores have more than tripled. With operational excellence and best-in-class service, we are earning our customers' trust and preference. Our continued investment in operations, product, service, airports and technology are reshaping customer perception of our brand and driving increased customer loyalty.

We offer more than 5,000 daily departures and as many as 15,000 affiliated departures including the premier SkyTeam alliance, of which Delta is a founding member. We generate over 70% of our passenger revenue from our domestic network, centered around high-margin core hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City. These core hub positions complement strong coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. We have agreements with domestic regional carriers that operate as Delta Connection^® to feed traffic to our domestic hubs.

We serve the Transatlantic, Transpacific and Latin America markets directly on Delta and through joint ventures with global airline partners. Internationally, we have significant hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon. We will become the largest U.S. carrier to Tokyo-Haneda in 2020 as we consolidate operations in Tokyo, the preferred airport for the local and corporate markets.

Through innovative alliances with Aeroméxico, Air France-KLM, China Eastern, Korean Air, Virgin Atlantic and Virgin Australia and alliances pending regulatory approval with LATAM Airlines and WestJet, we are bringing more choice to customers worldwide. Our strategic relationships with these international airlines are an important part of our business as they improve our access to markets around the world and enable us to provide customers a more seamless global travel experience across our alliance network. We and our alliance partners collectively serve over 140 countries and more than 900 destinations around the world, extending our network reach to cover approximately 98% of global gross domestic product. The most significant of these arrangements are commercial joint ventures that include joint sales and marketing coordination, co-location of airport facilities and other commercial cooperation arrangements. In some cases, we have reinforced strategic alliances through equity investments where we have opportunity to create deep relationships and maximize commercial cooperation.

Our network is supported by a fleet of over 1,000 aircraft that is varied in size and capabilities, giving us flexibility to adjust aircraft to the network. We are currently refreshing our fleet, acquiring new, more fuel efficient aircraft with increased premium seating, to replace older aircraft. We are also reducing our fleet complexity with fewer aircraft types. The evolution from a legacy fleet to a more optimal fleet suited to the scale of our network will provide substantial efficiency benefits and further efforts to reduce our carbon footprint.

Over the last decade we have fundamentally transformed our business. We have invested in our people, our product and our reliability to alter the commodity-like nature of air travel. We have a retail oriented, merchandised approach to distribution with well-defined and differentiated products for our customers. Through improved product segmentation, we offer distinct travel experiences with clear value propositions that enable customer choice. In 2019, approximately one-third of our passenger revenues were from premium products, which include Delta One^®, Delta Premium Select, First Class and Delta Comfort+^®. Main Cabin products, including Basic Economy, represented approximately half of our revenue in 2019 and provide varying levels of pre-travel flexibility as well as our exceptional service onboard the aircraft.

Our tickets are sold through various distribution channels, with 52% of tickets sold through direct channels. These include digital channels, such as delta.com and the Fly Delta app, and our reservations specialists where we deliver more direct, personalized interactions with our customers at reduced distribution costs. Indirect distribution channels include online travel agencies and traditional "brick and mortar" agencies. We make fare and product information widely available across those channels, ensuring customers always receive the best information and service options.

We are implementing merchandising initiatives across our distribution channels to allow customers to better understand our product offerings, make it easier to buy the products they desire and increase customer satisfaction. This merchandising effort is most effective in Delta's digital channels where customers can compare all product options in a single, easy to understand display.

Our objective is to make technology a strategic differentiator. We continue to invest in technological improvements that support our operations and provide tools for our employees. These investments include improvements to infrastructure and technology architecture to unify and improve access to data sources and continue innovations in customer facing applications. This digital transformation is enhancing interactions with our customers and allows our people to deliver more personalized service, further enhancing the customer experience and strengthening our brand.

Through the development of innovative new technologies, we can better serve customers and give our employees the best tools. For our customers, we are making investments in the Fly Delta app, in the airport and onboard our aircraft. We are evolving the Fly Delta app into a digital travel concierge for our customers to offer convenient services on the day of travel and deliver thoughtful notifications to make their travel journeys more seamless. In the airport, we are investing to create a smoother, less stressful travel experience. On board the aircraft, we continue to invest in in-flight entertainment with the most seat-back screens in the sky and free messaging. For our employees, we are investing in applications that allow our people to have more meaningful interactions with our customers, as well as tools to make our employees safer and better able to do their jobs.

Our SkyMiles^® loyalty program is designed to grow customer loyalty by offering incentives to customers to increase travel on Delta. As Delta's brand has strengthened, the SkyMiles^®program has seen an acceleration in membership growth. We see opportunity to continue this momentum as we increase customer engagement and expand mileage redemption options and revamp our co-brand card offerings.

The loyalty program allows program members to earn mileage credit ("miles") for award redemptions such as flights and upgrades, by flying on Delta, our regional carriers and other participating airlines. Miles may also be earned by using certain services offered by program participants, such as credit card companies, hotels, car rental agencies and ridesharing companies. In addition, individuals may purchase miles. Miles do not expire, but are subject to the program rules. We reserve the right to terminate the program with six months advance notice, and to change the program's terms and conditions at any time without notice.

Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. In early 2019, we amended our primary co-brand agreement and other related agreements with American Express. The new agreements increase the amount of total benefit that we receive and extend the duration of the relationship to 2029. In 2019, cash sales from American Express totaled $4 billion, which is expected to grow to nearly $7 billion by 2023.

Loyalty program miles can be redeemed for air travel (including upgrades) on Delta and participating airlines, for membership in our Delta Sky Clubs® and for other awards. We are expanding redemption opportunities and recently began enabling customers to redeem miles for bag fees. We offer last-seat availability for travel awards on our own flights (including most Delta Connection flights). Miles are subject to certain transfer restrictions and travel awards on partner airlines are subject to capacity-controlled seating. In 2019, 8.9% of revenue miles flown on Delta were from award travel, as program members redeemed miles in the loyalty program for 20 million award redemptions.

Joint Venture Agreements. We have implemented four separate joint venture arrangements with foreign carriers, each of which has been granted antitrust immunity from the U.S. Department of Transportation ("DOT"). We have reinforced a number of the agreements through equity investments in those carriers.

Each of our joint venture arrangements provides for joint commercial cooperation with the relevant partner within the geographic scope of the arrangement, including the sharing of revenues and/or profits and losses generated by the parties on the joint venture routes, as well as joint marketing and sales, coordinated pricing and revenue management, network and schedule planning and other coordinated activities with respect to the parties' operations on joint venture routes. Our implemented commercial joint ventures consist of the following:

•A combined joint venture with Air France, KLM and Virgin Atlantic with respect to transatlantic traffic flows. In addition to the joint venture, we own a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways and a non-controlling 9% ownership stake in the parent company of Air France and KLM.

•A joint venture with Aeroméxico with respect to trans-border traffic flows between the U.S. and Mexico. In addition to the joint venture, we own a non-controlling 51% equity stake in Grupo Aeroméxico, S.A.B. de C.V., the parent company of Aeroméxico. In addition, we and Aeroméxico have established a joint venture relating to an airframe MRO operation located in Queretaro, Mexico.

In 2019, we entered into a framework agreement with LATAM Airlines Group S.A. (“LATAM”) to form a strategic alliance. Pursuant to that agreement, we acquired a non-controlling 20% equity stake in LATAM in January 2020. The parties are in the process of finalizing definitive agreements to implement the strategic alliance and once finalized, the agreements will be submitted for approval by regulatory authorities. Pursuant to the framework agreement, we agreed to make transition payments to LATAM totaling $350 million, $200 million of which was disbursed in 2019, and also agreed to acquire four A350 aircraft from LATAM and plan to assume ten of LATAM’s A350 purchase commitments from Airbus, with deliveries through 2025. In order to facilitate the formation of our strategic alliance with LATAM, we have sold our ownership stake in GOL and are winding down our commercial agreements.

Enhanced Commercial Agreements with China Eastern. We own a 3% equity interest in China Eastern, with whom we have a strategic joint marketing and commercial cooperation arrangement covering traffic flows between China and the U.S., which includes reciprocal codesharing, loyalty program participation, airport lounge access and joint sales cooperation.

SkyTeam. In addition to our marketing alliance agreements with individual foreign airlines, we are a member of the SkyTeam global airline alliance. The other members of SkyTeam are Aeroflot, Aerolíneas Argentinas, Aeroméxico, Air Europa, Air France, Alitalia, China Airlines, China Eastern, CSA Czech Airlines, Garuda Indonesia, Kenya Airways, KLM, Korean Air, Middle East Airlines, Saudi Arabian Airlines, Tarom, Vietnam Airlines and Xiamen Airlines. Through alliance arrangements with other SkyTeam carriers, Delta is able to link its network with the route networks of the other member airlines, providing opportunities to increase connecting traffic while offering enhanced customer service through reciprocal codesharing and loyalty program participation, airport lounge access and cargo operations.

We have air service agreements with domestic regional air carriers that feed traffic to our route system by serving passengers primarily in small and medium-sized cities in the domestic market. These arrangements enable us to better match capacity with demand in these markets. Approximately 15% of our passenger revenue in 2019 was related to flying by regional air carriers.

Our contractual agreements with regional carriers primarily are capacity purchase arrangements, under which we control the scheduling, pricing, reservations, ticketing and seat inventories for the regional carriers' flights operating under our "DL" designator code. We are entitled to all ticket, cargo, mail, in-flight and ancillary revenues associated with these flights. 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. These capacity purchase agreements are long-term agreements, usually with initial terms of at least ten years, which grant us the option to extend the initial term. Certain of these agreements provide us the right to terminate the entire agreement, or in some cases remove some of the aircraft from the scope of the agreement, for convenience at certain future dates.

As we connect people with communities, experiences and each other, we are committed to doing our part to build a better world. Giving back to the communities where we live, work and serve is part of our culture, and we have pledged to give one percent of our annual net income back to communities across the globe. As a purpose-driven and values-led company, we are committed to reducing our environmental impact. We were among the leaders in the industry to offer comprehensive onboard recycling to our passengers and are working to reduce our use of single-use plastics. The chief focus of reducing our impact on the environment is jet fuel, which is the primary contributor to our carbon footprint. We continue to focus on increasing fuel efficiency as we replace older aircraft with more fuel-efficient jets and improve the efficiency of our existing aircraft through operational efforts.

Through our global network, our cargo operations are able to connect the world's major freight gateways. We generate cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft. We are a member of SkyTeam Cargo, a global airline cargo alliance, whose other members are Aeroflot, Aerolíneas Argentinas, Aeroméxico Cargo, Air France-KLM Cargo, Alitalia Cargo, China Airlines Cargo, China Cargo Airlines, Czech Airlines Cargo, Korean Air Cargo and Saudia Cargo. SkyTeam Cargo offers a global network spanning six continents.

•Delta Private Jets, until January 2020 a wholly-owned subsidiary, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour. In January 2020, we combined Delta Private Jets with Wheels Up, establishing one of the world’s largest owned and managed fleets of private aircraft. We now own an equity stake in Wheels Up.

Our results of operations are significantly impacted by changes in the price and availability of aircraft fuel. We purchase most of our aircraft fuel under contracts that establish the price based on various market indices and therefore do not provide material protection against price increases or assure the availability of our fuel supplies. We also purchase aircraft fuel on the spot market, from off-shore sources and under contracts that permit the refiners to set the price.

Our wholly owned subsidiaries, Monroe Energy, LLC and MIPC, LLC (collectively, "Monroe") operate the Trainer refinery and related assets located near Philadelphia, Pennsylvania. The facilities include pipelines and terminal assets that allow the refinery to supply jet fuel to our airline operations throughout the Northeastern U.S., including our New York hubs at LaGuardia and JFK. These companies are distinct from us, operating under their own management teams and with their own boards of managers. We own Monroe as part of our strategy to mitigate the cost of the refining margin reflected in the price of jet fuel, as well as to maintain sufficiency of supply to our New York operations.

Refinery Operations. The facility is capable of refining approximately 200,000 barrels of crude oil per day. In addition to jet fuel, the refinery's production consists of gasoline, diesel and other refined petroleum products ("non-jet fuel products"). Monroe sources domestic and foreign crude oil supply from a variety of providers.

Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s inventory. We may utilize different contract and commodity types in this program and frequently test their economic effectiveness against our financial targets. We closely monitor the hedge portfolio and rebalance the portfolio based on market conditions, which may result in locking in gains or losses on hedge contracts prior to their settlement dates.

We are currently able to obtain adequate supplies of aircraft fuel, including fuel produced by Monroe or procured through the exchange of non-jet fuel products the refinery produces, and crude oil for Monroe's operations. However, it is impossible to predict the future availability or price of aircraft fuel and crude oil. Weather-related events, natural disasters, political disruptions or wars involving oil-producing countries, changes in governmental policy concerning aircraft fuel production, transportation, taxes or marketing, changes in refining capacity, environmental concerns and other unpredictable events may result in future fuel supply shortages and fuel price increases.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and loyalty programs. The industry has evolved through mergers and new entry, both domestically and internationally, and evolution in international alliances. Consolidation in the airline industry, the presence of subsidized government sponsored international carriers, changes in international alliances and the creation of immunized joint ventures have altered, and will continue to alter, the competitive landscape in the industry, resulting in the formation of airlines and alliances with significant financial resources, extensive global networks and competitive cost structures.

Our domestic operations are subject to competition from traditional network carriers, including American Airlines and United Airlines, national point-to-point carriers, including Alaska Airlines, JetBlue Airways and Southwest Airlines, and other discount or ultra low-cost carriers, including Spirit Airlines, Frontier Airlines and Allegiant Air, some of which may have lower costs than we do and provide service at low fares to destinations served by us. Point-to-point, discount and ultra low-cost carriers place significant competitive pressure on network carriers in the domestic market. In particular, we face significant competition at our domestic hubs and key airports either directly at those airports or at the hubs of other airlines that are located in close proximity to our hubs and key airports. We also face competition in smaller to medium-sized markets from regional jet operations of other carriers.

Our international operations are subject to competition from both foreign and domestic carriers. Competition from government-owned and subsidized carriers in the Gulf region, including Emirates, Etihad Airways and Qatar Airways, is significant. These carriers have large numbers of international widebody aircraft on order and have increased service to the U.S. These carriers' government subsidies have allowed them to grow quickly, reinvest in their product and expand their global presence at the expense of U.S. airlines.

Through alliance and other marketing and codesharing agreements with foreign carriers, U.S. carriers have increased their ability to sell international transportation, such as services to and beyond traditional European and Asian gateway cities. Similarly, foreign carriers have obtained increased access to interior U.S. passenger traffic beyond traditional U.S. gateway cities through these relationships. In particular, alliances formed by domestic and foreign carriers, including SkyTeam, the Star Alliance (among United Airlines, Lufthansa German Airlines, Air Canada and others) and the oneworld alliance (among American Airlines, British Airways, Qantas and others) have enhanced competition in international markets.

In addition, several joint ventures among U.S. and foreign carriers, including our joint ventures, have received grants of antitrust immunity allowing the participating carriers to coordinate schedules, pricing, sales and inventory. Other joint ventures that have received antitrust immunity include a transatlantic alliance among United Airlines, Air Canada and Lufthansa German Airlines, a transpacific joint venture between United Airlines and All Nippon Airways, a transatlantic joint venture among American Airlines, British Airways and Iberia, a transpacific joint venture between American Airlines and Japan Air Lines and a transpacific joint venture between American Airlines and Qantas.

The DOT and the Federal Aviation Administration (the "FAA") exercise regulatory authority over air transportation in the U.S. The DOT has authority to issue certificates of public convenience and necessity required for airlines to provide domestic air transportation. An air carrier that the DOT finds fit to operate is given authority to operate domestic and international air transportation (including the carriage of passengers and cargo). Except for constraints imposed by regulations regarding "Essential Air Services," which are applicable to certain small communities, airlines may terminate service to a city without restriction.

The DOT has jurisdiction over certain economic and consumer protection matters, such as unfair or deceptive practices and methods of competition, advertising, denied boarding compensation, baggage liability and disabled passenger transportation. The DOT also has authority to review certain joint venture agreements between domestic and international carriers. The DOT engages in regulation of economic matters such as transactions involving allocation of "slots" or similar regulatory mechanisms which limit the rights of carriers to conduct operations at airports where such mechanisms are in place. The FAA has primary responsibility for matters relating to the safety of air carrier flight operations, including airline operating certificates, control of navigable air space, flight personnel, aircraft certification and maintenance and other matters affecting air safety.

Authority to operate international routes and international codesharing arrangements is regulated by the DOT and by the governments of the foreign countries involved. International certificate authorities are also subject to the approval of the U.S. President for conformance with national defense and foreign policy objectives.

The Transportation Security Administration and the U.S. Customs and Border Protection, each a division of the Department of Homeland Security, are responsible for certain civil aviation security matters, including passenger and baggage screening at U.S. airports and international passenger prescreening prior to entry into or departure from the U.S.

Airlines are also subject to various other federal, state, local and foreign laws and regulations. For example, the U.S. Department of Justice has jurisdiction over airline competition matters. The U.S. Postal Service has authority over certain aspects of the transportation of mail. Labor relations in the airline industry, as discussed below, are generally governed by the Railway Labor Act with oversight by the National Mediation Board. Environmental matters are regulated by various federal, state, local and foreign governmental entities. Privacy of passenger and employee data is regulated by domestic and foreign laws and regulations.

Airlines set ticket prices in all domestic and most international city pairs with minimal governmental regulation, and the industry is characterized by significant price competition. Certain international fares and rates are subject to the jurisdiction of the DOT and the governments of the foreign countries involved. Many of our tickets are sold by travel agents, and fares are subject to commissions, overrides and discounts paid to travel agents, brokers and wholesalers.

Our flight operations are authorized by certificates of public convenience and necessity and also by exemptions and limited-entry frequency awards issued by the DOT. The requisite approvals of other governments for international operations are controlled by bilateral agreements (and a multilateral agreement in the case of the U.S. and the European Union) with, or permits or approvals issued by, foreign countries. Because international air transportation is governed by bilateral or other agreements between the U.S. and the foreign country or countries involved, changes in U.S. or foreign government aviation policies could result in the alteration or termination of such agreements, diminish the value of our international route authorities or otherwise affect our international operations. Bilateral agreements between the U.S. and various foreign countries served by us are subject to renegotiation from time to time. The U.S. government has negotiated "Open Skies" agreements with many countries, which allow unrestricted access between the U.S. and the foreign markets.

Certain of our international route authorities are subject to periodic renewal requirements. We request extension of these authorities when and as appropriate. While the DOT usually renews temporary authorities on routes where the authorized carrier is providing a reasonable level of service, there is no assurance this practice will continue in general or with respect to a specific renewal. Dormant route authorities may not be renewed in some cases, especially where another U.S. carrier indicates a willingness to provide service.

Operations at three major domestic airports and certain foreign airports served by us are regulated by governmental entities through allocations of "slots" or similar regulatory mechanisms. Each slot represents the authorization to land at or take off from the particular airport during a specified time period.

In the U.S., the FAA currently regulates the allocation of slots, slot exemptions, operating authorizations, or similar capacity allocation mechanisms at Reagan National in Washington, D.C. and LaGuardia and JFK in the New York City area. Our operations at these airports generally require the allocation of slots or analogous regulatory authorizations. Similarly, our operations at Tokyo's Haneda airport, London's Heathrow airport and other international airports are regulated by local slot coordinators pursuant to the International Air Transport Association's Worldwide Scheduling Guidelines and applicable local law. We currently have sufficient slots or analogous authorizations to operate our existing flights, and we have generally been able to obtain the rights to expand our operations and to change our schedules. There is no assurance, however, that we will be able to do so in the future because, among other reasons, such allocations are subject to changes in governmental policies.

Our operations are subject to a number of international, federal, state and local laws and regulations governing protection of the environment, including regulation of greenhouse gases and other air emissions, noise reduction, water discharges, aircraft drinking water, storage and use of petroleum and other regulated substances, and the management and disposal of hazardous waste, substances and materials.

Emissions. Carbon emissions by the aviation industry and their impact on climate change have become a particular focus in the international community and within the U.S. For several years, the European Union has required its member states to implement regulations to include aviation in its Emissions Trading Scheme ("ETS"). Under these regulations, any airline with flights originating or landing in the European Union is subject to the ETS and, beginning in 2012, was required to purchase emissions allowances if the airline exceeds the number of free allowances allocated to it under the ETS. The ETS was amended to apply only to flights within the European Economic Area from 2013 through 2016. In 2017, the EU extended the exemption for foreign flights through 2023 based on the International Civil Aviation Organization’s ("ICAO") adoption of a global market-based program.

In 2016, ICAO formally adopted a global, market-based emissions offset program known as the Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"). This program establishes a medium-term goal for the aviation industry of achieving carbon-neutral growth in international aviation beginning in 2021, based on a 2019-2020 baseline. A pilot phase of the offset program will begin in 2021, followed by a first phase of the program beginning in 2024 and a second phase beginning in 2027. Countries can voluntarily participate in the pilot and first phase, and the United States has agreed to participate in these voluntary phases. Participation in the second phase is mandatory for certain countries, including the United States. We submitted our CORSIA Emissions Monitoring Plan to the FAA in 2019 and are monitoring emissions for the 2019-2020 baseline period. In 2017, ICAO also adopted new aircraft certification standards to reduce carbon dioxide (CO₂) emissions from aircraft. The new aircraft certification standards apply to new aircraft types in 2020 and to new in-production aircraft starting in 2023 but no later than 2028. These standards will not apply to existing in-service aircraft. However, exemption from the certification requirement could affect how these aircraft are treated under other programs governing CO₂ emissions.

In 2016, the U.S. Environmental Protection Agency ("EPA") issued a final finding under the Clean Air Act that greenhouse gases threaten the public health and welfare, and further determined that aircraft cause or contribute to greenhouse gases. The endangerment finding does not establish standards, but triggers an obligation for the EPA to regulate greenhouse gas emissions from aircraft. The EPA has historically implemented air emissions control standards adopted by ICAO; however, the EPA has yet to issue regulations to regulate greenhouse gas emissions from aircraft pursuant to the 2016 endangerment finding.

We may face additional regulation of aircraft emissions in the U.S. and abroad and become subject to further taxes, charges or additional requirements to obtain permits or purchase allowances or emission credits for greenhouse gas emissions in various jurisdictions. Additional regulation could result in taxation, regulatory or permitting requirements from multiple jurisdictions for the same operations and significant costs for us and the airline industry. In addition to direct costs, such regulation could result in increased fuel costs passed through from fuel suppliers affected by any such regulations. We are monitoring and evaluating the potential impact of such legislative and regulatory developments.

We seek to minimize the impact of carbon emissions from our operations through reductions in our fuel consumption and other efforts, and have realized reductions in our carbon emission levels since 2005. We have reduced the fuel needs of our aircraft fleet through the retirement of older aircraft and replacement with newer, more fuel efficient aircraft. In addition, we have implemented fuel saving procedures in our flight and ground support operations that further reduce carbon emissions. We are also supporting efforts to develop alternative fuels and efforts to modernize the air traffic control system in the U.S. as part of our efforts to reduce our emissions and minimize our impact on the environment.

Noise. The Airport Noise and Capacity Act of 1990 recognizes the rights of operators of airports with noise problems to implement local noise abatement programs so long as such programs do not interfere unreasonably with interstate or foreign commerce or the national air transportation system. This statute generally provides that local noise restrictions on Stage 3 aircraft first effective after October 1, 1990, require FAA approval. While we have had sufficient scheduling flexibility to accommodate local noise restrictions in the past, our operations could be adversely impacted if locally-imposed regulations become more restrictive or widespread. In addition, foreign governments may allow airports to enact similar restrictions, which could adversely impact our international operations or require significant expenditure in order for our aircraft to comply with the restrictions.

Refinery Matters. Monroe's operation of the Trainer refinery is subject to numerous environmental laws and extensive regulations, including those relating to the discharge of materials into the environment, waste management, pollution prevention measures and greenhouse gas and other air emissions.

Under the Energy Independence and Security Act of 2005 and 2007, the Renewable Fuel Standard ("RFS") was created, setting up specific targets of renewable fuel to be used in the U.S. economy by mandating the blending of renewable fuels into gasoline and on-road diesel ("Transportation Fuels"). Renewable Identification Numbers ("RINs") are assigned to renewable fuels produced or imported into the U.S. that are blended into Transportation Fuels to demonstrate compliance with this obligation. A refiner may meet its obligation under RFS by blending the necessary volumes of renewable fuels with Transportation Fuels or by purchasing RINs in the open market or through a combination of blending and purchasing RINs. Because Monroe blends only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary market. Market prices for RINs have been volatile, marked by periods of sharp increases and decreases primarily in response to predictions about what the EPA and/or the U.S. Congress will do with respect to compliance obligations.

Other Environmental Matters. We are subject to certain environmental laws and contractual obligations governing the management and release of regulated substances, which may require the investigation and remediation of affected sites. Soil and/or ground water impacts have been identified at certain of our current or former leaseholds at several domestic airports. To address these impacts, we have a program in place to investigate and, if appropriate, remediate these sites. Although the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of these matters will not have a material adverse effect on our Consolidated Financial Statements.

We participate in the Civil Reserve Air Fleet program (the "CRAF Program"), which permits the U.S. military to use the aircraft and crew resources of participating U.S. airlines during airlift emergencies, national emergencies or times of war. We have agreed to make available under the CRAF Program a portion of our international aircraft during the contract period ending September 30, 2020. The CRAF Program has only been activated twice since it was created in 1951.

Our relations with labor unions representing our airline employees in the U.S. are governed by the Railway Labor Act. Under the Railway Labor Act, a labor union seeking to represent an unrepresented craft or class of employees is required to file with the National Mediation Board ("NMB") an application alleging a representation dispute, along with authorization cards signed by at least 50% of the employees in that craft or class. The NMB then investigates the dispute and, if it finds the labor union has obtained a sufficient number of authorization cards, conducts an election to determine whether to certify the labor union as the collective bargaining representative of that craft or class. A labor union will be certified as the representative of the employees in a craft or class if more than 50% of votes cast are for representation. A certified labor union would commence negotiations toward a collective bargaining agreement with the employer.

Under the Railway Labor Act, a collective bargaining agreement between an airline and a labor union does not expire, but instead becomes amendable as of a stated date. Either party may request that the NMB appoint a federal mediator to participate in the negotiations for a new or amended agreement. If no agreement is reached in mediation, the NMB may determine, at any time, that an impasse exists and offer binding arbitration. If either party rejects binding arbitration, a 30-day "cooling off" period begins. At the end of this 30-day period, the parties may engage in “self help,” unless the U.S. President appoints a Presidential Emergency Board ("PEB") to investigate and report on the dispute. The appointment of a PEB maintains the "status quo" for an additional 60 days. If the parties do not reach agreement during this period, the parties may then engage in self help. Self help includes, among other things, a strike by the union or the imposition of proposed changes to the collective bargaining agreement by the airline. Congress and the President have the authority to prevent self help by enacting legislation that, among other things, imposes a settlement on the parties.

Employee Group

Approximate Number of Active Employees Represented

Union

Date on which Collective Bargaining Agreement Becomes Amendable

Delta Pilots

13,082

ALPA

December 31, 2019

Delta Flight Superintendents (Dispatchers)

443

PAFCA

November 1, 2024

Endeavor Air Pilots

1,872

ALPA

January 1, 2024

Endeavor Air Flight Attendants

1,492

AFA

December 31, 2018

In addition to the domestic airline employee groups discussed above, 199 refinery employees of Monroe are represented by the United Steel Workers under an agreement that expires on February 28, 2022. This agreement is governed by the National Labor Relations Act ("NLRA"), which generally allows either party to engage in self help upon the expiration of the agreement.

Edward H. Bastian, Age 62: Chief Executive Officer of Delta since May 2016; President of Delta (September 2007 - May 2016); President of Delta and Chief Executive Officer Northwest Airlines, Inc. (October 2008 - December 2009); President and Chief Financial Officer of Delta (September 2007 - October 2008); Executive Vice President and Chief Financial Officer of Delta (July 2005 - September 2007); Chief Financial Officer of Acuity Brands (June 2005 - July 2005); Senior Vice President - Finance and Controller of Delta (2000 - April 2005); Vice President and Controller of Delta (1998 - 2000).

Glen W. Hauenstein, Age 59: President of Delta since May 2016; Executive Vice President - Chief Revenue Officer of Delta (August 2013 - May 2016); Executive Vice President - Network Planning and Revenue Management of Delta (April 2006 - July 2013); Executive Vice President and Chief of Network and Revenue Management of Delta (August 2005 - April 2006); Vice General Director - Chief Commercial Officer and Chief Operating Officer of Alitalia (2003 - 2005); Senior Vice President- Network of Continental Airlines (2003); Senior Vice President - Scheduling of Continental Airlines (2001 - 2003); Vice President Scheduling of Continental Airlines (1998 - 2001).

Paul A. Jacobson, Age 48: Executive Vice President - Chief Financial Officer of Delta since August 2013; Senior Vice President and Chief Financial Officer of Delta (March 2012 - July 2013); Senior Vice President and Treasurer of Delta (December 2007 - March 2012); Vice President and Treasurer of Delta (August 2005 - December 2007).

William P. Lentsch, Age 56: Executive Vice President - Flying/Air Operations of Delta since August 2018; Senior Vice President - Delta Connection and Delta Global Services, CEO - Endeavor Air (April 2017 - August 2018); Senior Vice President - Airport Customer Service and Airline Operations of Delta (September 2013 - April 2017); Senior Vice President - Minnesota Operations of Delta (June 2009 - September 2013); Senior Vice President - Flight Operations of Northwest Airlines, Inc. (October 2008 - June 2009); Vice President - Flight Operations of Northwest Airlines, Inc. (October 2007 - October 2008); Vice President - Customer Service - Minneapolis of Northwest Airlines, Inc. (May 2006 - October 2007); Vice President - Station Operations of Northwest Airlines, Inc. (July 2005 - May 2006).

Rahul Samant, Age 53: Executive Vice President - Chief Information Officer of Delta since January 2018; Senior Vice President and Chief Information Officer of Delta (February 2016 - December 2017); Senior Vice President and Chief Digital Officer of American International Group, Inc. (January 2015 - February 2016); Senior Vice President and Global Head, Application Development and Management of American International Group, Inc. (September 2012 - December 2014); Managing Director of Bank of America (1999 - September 2012).

Steven M. Sear, Age 54: President, International and Executive Vice President - Global Sales of Delta since February 2016; Senior Vice President - Global Sales of Delta (December 2011 - February 2016); Vice President - Global Sales of Delta (October 2008 - December 2011); Vice President - Sales & Customer Care of Northwest Airlines, Inc. (June 2005 - October 2008).

Joanne D. Smith, Age 61: Executive Vice President and Chief People Officer of Delta since October 2014; Senior Vice President - In-Flight Service of Delta (March 2007 - September 2014); Vice President - Marketing of Delta (November 2005 - February 2007); President of Song (January 2005 - October 2005); Vice President - Marketing and Customer Service of Song (November 2002 - December 2004).

W. Gil West, Age 59: Senior Executive Vice President and Chief Operating Officer of Delta since February 2016; Executive Vice President and Chief Operating Officer of Delta (March 2014 - February 2016); Senior Vice President - Airport Customer Service and Technical Operations of Delta (February 2012 - February 2014); Senior Vice President - Airport Customer Service of Delta (March 2008 - January 2012); President and Chief Executive Officer of Laidlaw Transit Services (2006 - 2007).

We make available free of charge on our website at ir.delta.com our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after these reports are filed with or furnished to the Securities and Exchange Commission. Information on our website is not incorporated into this Form 10-K or our other securities filings and is not a part of those filings.

In addition, any accident involving an aircraft that we operate or an aircraft that is operated by an airline that is one of our regional carriers or codeshare, alliance or joint venture partners could create a negative public perception about safety, which could harm our reputation, resulting in air travelers being reluctant to fly on our aircraft and therefore harm our business.

As a regular part of our ordinary business operations, we collect and store sensitive data, including information necessary for our operations, personal information of our passengers and employees and information of our business partners. The secure operation of the networks and systems on which this type of information is stored, processed and maintained is critical to our business operations and strategy.

Our information systems and those of our service providers are subject to an increasing threat of continually evolving cybersecurity risks. Unauthorized parties may attempt to gain access to our systems or information, or those of our service providers, including through fraud or other means of deception. Hardware or software we develop, acquire or use in connection with our systems may contain defects that could unexpectedly compromise information security. For example, we were notified in 2018 that a third-party vendor of chat services for Delta and other companies determined it had been involved in a cyber incident for a short period in 2017. We have incurred remedial, legal and other costs in connection with this incident but the costs are not material to our financial position or results of operations.

The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or to detect for long periods of time. As a result of these types of risks and regular attacks on our systems, we regularly review and update procedures and processes to prevent and protect against unauthorized access to our systems and information and inadvertent misuse of data. In addition to continuously risk assessing and reviewing our procedures, processes and technologies, we also continue to monitor, review and update the process and control requirements we expect our third parties and vendors to leverage and implement for the protection of Delta information that is in their care. However, the constantly changing nature of the threats means that we may not be able to prevent all information security breaches or misuse of data.

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, our information or that of our customers, employees or business partners or failure to comply with regulatory or contractual obligations with respect to such information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business. The costs to remediate breaches and similar system compromises that do occur could be material. In addition, as cybercriminals become more sophisticated, the cost of proactive defensive measures may increase.

Disruptions in our information technology network could result from a technology error or failure impacting our internal systems, whether hosted internally at our data centers or externally at third-party locations, or large scale external interruption in technology infrastructure support on which we depend, such as power, telecommunications or the internet. The operation of our technology systems and the use of related data may also be vulnerable to a variety of other sources of interruption, including natural disasters, terrorist attacks, computer viruses, hackers and other security issues. A significant individual, sustained or repeated failure of our network, including third-party networks we utilize and on which we depend, could impact our customer service and result in increased costs. While we have in place initiatives to prevent disruptions and disaster recovery plans (including the creation of a back-up data center) and continue to invest in improvements to these initiatives and plans, these measures may not be adequate to prevent a business disruption and any material adverse financial and reputational consequences to our business.

We are dependent on technology initiatives to provide customer service and operational effectiveness in order to compete in the current business environment. For example, we have made and continue to make significant investments in customer facing technology such as delta.com, mobile device applications, check-in kiosks, customer service applications, application of biometric technology, airport information displays and related initiatives, including security for these initiatives. We are also investing in significant upgrades to technology infrastructure and other supporting systems. The performance, reliability and security of the technology are critical to our ability to serve customers. If our technology does not perform effectively, our business and operations would be negatively affected, which could be material.

An important part of our strategy to expand our global network has been to make significant investments in airlines in other parts of the world and expand our commercial relationships with these carriers, including through joint ventures. We expect to continue exploring ways to expand our relationships with other carriers as part of our global business strategy. These investments and relationships involve significant challenges and risks, including that we may not realize a satisfactory return on our investment or that they may not generate the expected financial results. These events could have a material adverse effect on our operating results.

In addition, we are dependent on these other carriers for significant aspects of our network in the regions in which they operate. While we work closely with these carriers, we do not have control over their operations or business methods. To the extent that the operations of any of these carriers are disrupted over an extended period or their actions have a significant adverse effect on our operations, our results of operations could be materially adversely affected.

In certain circumstances, we also may be subject to consequences of the failure of these carriers to comply with laws and regulations, including U.S. laws to which they may be subject. For example, we may be subject to consequences from improper behavior of our joint venture partners, including for failure to comply with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act. Such a result could have a material adverse effect on our operating results.

Our primary credit facility has various financial and other covenants that require us to maintain a minimum fixed charge coverage ratio and a minimum asset coverage ratio. We have other smaller facilities, some of which are secured and also contain collateral coverage ratios. A decline in the value of our assets supporting these facilities from factors that are not under our control could affect one or more of the ratios. In addition, the credit facilities contain other negative covenants customary for such financings. These covenants are subject to important exceptions and qualifications. If we fail to comply with these covenants and are unable to remedy or obtain a waiver or amendment, an event of default would result.

The credit facilities also contain other events of default customary for such financings. If an event of default were to occur, the lenders could, among other things, declare outstanding amounts due and payable and where applicable, repossess collateral, which may include aircraft or other valuable assets. In addition, an event of default or declaration of acceleration under any of the credit facilities could also result in an event of default under other of our financing agreements. The acceleration of significant amounts of debt could require us to renegotiate, repay or refinance the obligations under the credit facilities or other financing arrangements.

Our business is labor intensive, utilizing large numbers of pilots, flight attendants, aircraft maintenance technicians, ground support personnel and other personnel. As of December 31, 2019, approximately 19% of our workforce, primarily pilots, was unionized. Relations between air carriers and labor unions in the United States are governed by the Railway Labor Act, which provides that a collective bargaining agreement between an airline and a labor union does not expire, but instead becomes amendable as of a stated date. The Railway Labor Act generally prohibits strikes or other types of self help actions both before and after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required by the Railway Labor Act have been exhausted. The collective bargaining agreement with our pilots became amendable on December 31, 2019 and we are in discussions with representatives of the pilots regarding terms of the collective bargaining agreement. Monroe's relations with unions representing its employees are governed by the NLRA, which generally allows self help after a collective bargaining agreement expires.

If we or our subsidiaries are unable to reach agreement with any of our unionized work groups on future negotiations regarding the terms of their collective bargaining agreements or if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act or the NLRA, as the case may be. Strikes or labor disputes with our unionized employees may have a material adverse effect on our ability to conduct business. Likewise, if third-party regional carriers with whom we have contract carrier agreements are unable to reach agreement with their unionized work groups in current or future negotiations regarding the terms of their collective bargaining agreements, those carriers may be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act, which could have a material adverse effect on our operations.

Our results of operations are impacted by severe weather, natural disasters and seasonality. Severe weather conditions and natural disasters (or other environmental events) can significantly disrupt service and create air traffic control problems. These events decrease revenue and can also increase costs. In addition, increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons or other severe weather events, including from changes in the global climate, could result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in loss of revenue and higher costs. In addition, demand for air travel is typically higher in the June and September quarters, particularly in our international markets, because there is more vacation travel during these periods than during the remainder of the year. The seasonal shifting of demand causes our financial results to vary on a seasonal basis. Because of fluctuations in our results from weather, natural disasters and seasonality, operating results for a historical period are not necessarily indicative of operating results for a future period and operating results for an interim period are not necessarily indicative of operating results for an entire year.

We utilize the services of third parties in a number of areas in support of our operations that are integral to our business, including third-party carriers in the Delta Connection program and ground operations at some airports. While we have agreements with these providers that define expected service performance, we do not have direct control over their operations. In particular, some third-party regional carriers are facing a shortage of qualified pilots due to government mandated increases in flight experience required for pilots working for airlines. If this shortage becomes more widespread, third-party regional carriers may not be able to comply with their obligations to us. To the extent that a significant disruption in services occurs because third party providers are unable to perform their obligations over an extended period of time, our revenue may be reduced or our expenses may be increased, resulting in a material adverse effect on our results of operations.

Our operating results are significantly impacted by changes in the price of aircraft fuel. Over the last decade, fuel prices have increased substantially at times and have been highly volatile. In 2019, our average fuel price per gallon, including the impact of fuel hedges, was $2.02, an 8.2% decrease from our average fuel price in 2018. In 2018, our average fuel price per gallon was $2.20, a 31.0% increase from our average fuel price in 2017 of $1.68. Fuel costs represented 21.1%, 23.0% and 19.2% of our operating expense in 2019, 2018 and 2017, respectively.

We acquire a significant amount of jet fuel from our wholly owned subsidiary, Monroe, and through strategic agreements that Monroe has with third parties. The cost of the fuel we purchase under these arrangements remains subject to volatility in the cost of crude oil and jet fuel. In addition, we continue to purchase a significant amount of aircraft fuel in addition to what we obtain from Monroe. Our aircraft fuel purchase contracts alone do not provide material protection against price increases as these contracts typically establish the price based on industry standard market price indices.

The competitive nature of the airline industry may affect our ability to pass along rapidly increasing fuel costs to our customers. In addition, because passengers often purchase tickets well in advance of their travel, a significant rapid increase in fuel price may result in the fare charged not covering that increase. At times in the past, we often were not able to increase our fares to offset fully the effect of increases in fuel costs, and we may not be able to do so in the future.

Weather-related events, natural disasters, political disruptions or wars involving oil-producing countries, changes in governmental policy concerning aircraft fuel production, transportation or taxes, changes in refining capacity, environmental concerns and other unpredictable events may impact crude oil and fuel supply and could result in shortages in the future. Shortages in fuel supplies could have negative effects on our results of operations and financial condition.

Because we acquire a large amount of our jet fuel from Monroe, the disruption or interruption of production at the refinery could have an impact on our ability to acquire jet fuel needed for our operations. Disruptions or interruptions of production at the refinery could result from various sources including a major accident or mechanical failure, interruption of supply or delivery of crude oil, work stoppages relating to organized labor issues, or damage from severe weather or other natural or man-made disasters, including acts of terrorism. If the refinery were to experience an interruption in operations, disruptions in fuel supplies could have negative effects on our results of operations and financial condition. In addition, the financial benefits from the operation of the refinery could be materially adversely affected (to the extent not recoverable through insurance) because of lost production and repair costs.

Monroe's refining operations are subject to various hazards unique to refinery operations, including explosions, fires, toxic emissions and natural catastrophes. Monroe could incur substantial losses, including cleanup costs, fines and other sanctions and third-party claims, and its operations could be interrupted, as a result of such an incident. Monroe's insurance coverage does not cover all potential losses, costs or liabilities, and Monroe could suffer losses for uninsurable or uninsured risks or in amounts greater than its insurance coverage. In addition, Monroe's ability to obtain and maintain adequate insurance may be affected by conditions in the insurance market over which it has no control. If Monroe were to incur a significant liability for which it is not fully insured or for which insurance companies do not or are unable to provide coverage, this could have a material adverse effect on our consolidated financial results of operations or consolidated financial position. In addition, because of our ownership of Monroe, the occurrence of an environmental or other incident could result in damage to our reputation, which could have a material adverse effect on our financial results.

Monroe's operations are subject to extensive environmental, health and safety laws and regulations, including those relating to the discharge of materials into the environment, waste management, pollution prevention measures and greenhouse gas emissions. Monroe could incur fines and other sanctions, cleanup costs and third-party claims as a result of violations of or liabilities under environmental, health and safety requirements, which if significant, could have a material adverse effect on our consolidated financial results. In addition, the enactment of new environmental laws and regulations, including any laws or regulations relating to greenhouse gas emissions, could significantly increase the level of expenditures required for Monroe or restrict its operations.

In particular, under the Energy Independence and Security Act of 2007, the EPA has adopted RFS that mandate the blending of renewable fuels into Transportation Fuels. RINs are assigned to renewable fuels produced or imported into the U.S. that are blended into Transportation Fuels to demonstrate compliance with this obligation. A refinery may meet its obligation under RFS by blending the necessary volumes of renewable fuels with Transportation Fuels or by purchasing RINs in the open market or through a combination of blending and purchasing RINs.

Because Monroe blends only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary market or obtain a waiver from the EPA. As a result, Monroe is exposed to the market price of RINs. Market prices for RINs have been volatile, marked by periods of sharp increases and decreases. We cannot predict the future prices of RINs. Purchasing RINs at elevated prices could have a material impact on our consolidated results of operations and cash flows.

Existing laws or regulations could change, and the minimum volumes of renewable fuels that must be blended with refined petroleum products may increase. Increases in the volume of renewable fuels that must be blended into Monroe's products could limit the refinery's production if sufficient numbers of RINs are not available for purchase or relief from this requirement is not obtained, which could have a material adverse effect on our consolidated financial results.

We are dependent on the experience and industry knowledge of our officers and other key employees to design and execute our business plans. If we experience a substantial turnover in our leadership and other key employees, and these persons are not replaced by individuals with comparable skills, our performance could be materially adversely impacted. Furthermore, we may be unable to attract and retain additional qualified executives as needed in the future.

We operate in a highly visible, public environment with significant exposure to traditional and social media. Adverse publicity, whether justified or not, can rapidly spread, including through social or digital media. In particular, passengers can use social media to provide feedback about their interaction with us in a manner that can be quickly and broadly disseminated. To the extent we are unable to respond timely and appropriately to adverse publicity, our brand and reputation may be damaged. Significant damage to our overall reputation and brand image could have a material adverse effect on our financial results.

Terrorist attacks, geopolitical conflict or security events, or fear of any of these events, could have a significant adverse effect on our business. Despite significant security measures at airports and airlines, the airline industry remains a high profile target for terrorist groups. We constantly monitor threats from terrorist groups and individuals, including from violent extremists both internationally and domestically, with respect to direct threats against our operations and in ways not directly related to the airline industry. In addition, the impact on our operations of avoiding areas of the world, including airspace, in which there are geopolitical conflicts and the targeting of commercial aircraft by parties to those conflicts can be significant. Security events, primarily from external sources but also from potential insider threats, also pose a significant risk to our passenger and cargo operations. These events could include random acts of violence and could occur in public areas that we cannot control.

Terrorist attacks, geopolitical conflict or security events, or fear of any of these events, even if not made directly on or involving the airline industry, could have significant negative impact on us by discouraging passengers from flying, leading to decreased ticket sales and increased refunds. In addition, potential costs from these types of events include increased security costs, impacts from avoiding flight paths over areas in which conflict is occurring, reputational harm and other costs. If any or all of these types of events occur, they could have a material adverse effect on our business, financial condition and results of operations.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and loyalty programs. Consolidation in the airline industry, the rise of subsidized government sponsored international carriers, changes in international alliances and the creation of immunized joint ventures have altered and will continue to alter the competitive landscape in the industry, resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and competitive cost structures.

Our international operations are subject to competition from both foreign and domestic carriers. Competition from government-owned and subsidized carriers in the Gulf region, including Emirates, Etihad Airways and Qatar Airways, is significant. These carriers have large numbers of international widebody aircraft on order and have increased service to the U.S. These carriers are government-subsidized, which has allowed them to grow quickly, reinvest in their product and expand their global presence at the expense of U.S. airlines.

Through alliance and other marketing and codesharing agreements with foreign carriers, U.S. carriers have increased their ability to sell international transportation, such as services to and beyond traditional European and Asian gateway cities. Similarly, foreign carriers have obtained increased access to interior U.S. passenger traffic beyond traditional U.S. gateway cities through these relationships. In addition, several joint ventures among U.S. and foreign carriers have received grants of antitrust immunity allowing the participating carriers to coordinate schedules, pricing, sales and inventory.

The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world. An extended interruption or disruption at an airport where we have significant operations could have a material adverse effect on our business, financial condition and results of operations.

Similarly, the airline industry is heavily dependent on a limited number of aircraft and engine manufacturers whose products are subject to extensive regulatory requirements. The long-term grounding of an aircraft or engine type that we operate could have a significant impact on our operations if we are not able to substitute or replace the affected aircraft or engine type and could, in any event, have a material adverse effect on our financial condition and results of operations.

Airlines are subject to extensive regulatory and legal compliance requirements that result in significant costs. For instance, the FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that necessitate significant expenditures. We expect to continue incurring significant expenses to comply with the FAA's regulations.

Other laws, regulations, taxes and airport rates and charges have also been imposed from time to time that significantly increase the cost of airline operations or reduce revenues. The industry is heavily taxed. Additional taxes and fees, if implemented, could negatively impact our results of operations.

Airport slot access is subject to government regulation and changes in slot regulations or allocations could impose a significant cost on the airlines operating in airports subject to such regulations or allocations. In addition, the failure of the federal government to upgrade the U.S. air traffic control system has resulted in delays and disruptions of air traffic during peak travel periods in certain congested markets. The failure to improve the air traffic control system could lead to increased delays and inefficiencies in flight operations as demand for U.S. air travel increases, having a material adverse effect on our operations. Failure to update the air traffic control system in a timely manner, and the substantial funding requirements of an updated system that may be imposed on air carriers, may have an adverse impact on our financial condition and results of operations.

As an international carrier, we are subject to a wide variety of U.S. and foreign laws that affect trade, including tariff and trade policies, export requirements, taxes, monetary policies and other restrictions and charges. On October 2, 2019, an arbitration tribunal of the World Trade Organization ruled in a long-standing dispute that the United States could impose $7.5 billion in retaliatory tariffs in response to European Union subsidies to Airbus. Effective October 18, 2019, the U.S. Trade Representative imposed tariffs on certain products imported from the European Union, including an ad valorem duty of 10% on commercial aircraft originating in France and Germany. Some of the Airbus aircraft that we have on order would be subject to these tariffs if imported as new aircraft. We are pursuing strategies to minimize the impact of these tariffs on our aircraft deliveries but if we are unsuccessful or if the tariffs are increased, these tariffs could substantially increase the cost to us of the affected aircraft, which in turn could have a material adverse effect on our financial results.

In addition, some of our operations are in high-risk legal compliance environments. Failure to comply with trade sanctions, the U.S. Foreign Corrupt Practices Act and other applicable laws or regulations could result in litigation, assessment of damages, imposition of penalties or other consequences, any or all of which could harm our reputation and have an adverse effect on our financial results.

We and other U.S. carriers are subject to U.S. and foreign laws regarding privacy of passenger and employee data that are not consistent in all countries in which we operate. In addition to the heightened level of concern regarding privacy of passenger data in the U.S., certain European government agencies have recently updated privacy regulations applicable to private industry, including airlines. Ongoing compliance with these evolving regulatory regimes is expected to result in additional operating costs and could have a material adverse effect on our operations and any future expansion.

Many aspects of our operations are subject to increasingly stringent federal, state, local and international laws governing the protection of the environment. Compliance with existing and future environmental laws and regulations can require significant expenditures and violations can lead to significant fines and penalties.

Future regulatory action concerning climate change, aircraft emissions and noise emissions could have a significant effect on the airline industry. In order to address aircraft emissions, ICAO, a UN specialized agency, formally adopted a global, market-based emission offset program known as CORSIA. This program establishes a medium-term goal for the aviation industry of achieving carbon-neutral growth in international aviation beginning in 2021, based on a 2019-2020 baseline. Certain CORSIA program details remain to be developed and could potentially be affected by political developments in participating countries or the results of the pilot phase of the program, and thus the impact of CORSIA cannot be fully predicted. However, CORSIA is expected to increase operating costs for airlines that operate internationally.

In addition to CORSIA, we may face additional regulation of aircraft emissions in the U.S. and abroad and become subject to further taxes, charges or additional requirements to obtain permits or purchase allowances or emission credits for greenhouse gas emissions in various jurisdictions. Additional regulation could result in taxation, regulatory or permitting requirements from multiple jurisdictions for the same operations and significant costs for us and the airline industry. In addition to direct costs, such regulation could result in increased fuel costs passed through from fuel suppliers affected by any such regulations. While the specific nature of future actions is hard to predict, new laws or regulations related to environmental matters adopted in the U.S. or other countries could impose significant additional costs on our operations.

As a result of the discretionary nature of air travel, the airline industry has been cyclical and particularly sensitive to changes in economic conditions. Because we operate globally, with approximately 30% of our revenues from operations outside of the U.S., our business is subject to economic conditions throughout the world. During periods of unfavorable or volatile economic conditions in the global economy, demand for air travel can be significantly impacted as business and leisure travelers choose not to travel, seek alternative forms of transportation for short trips or conduct business using technological alternatives. If unfavorable economic conditions occur, particularly for an extended period, our business, financial condition and results of operations may be adversely affected. In addition, significant or volatile changes in exchange rates between the U.S. dollar and other currencies, and the imposition of exchange controls or other currency restrictions, may have a material adverse effect on our liquidity, financial conditions and results of operations.

Following a referendum in June 2016 in which voters in the U.K. approved an exit (often referred to as Brexit) from the European Union, the U.K.’s withdrawal became effective on January 31, 2020. A transition period will apply until the end of 2020 (or later, if extended) during which the pre-Brexit legal regime will continue to apply (including with respect to aviation) while the U.K. and European Union negotiate rules that will apply to their future relationship. It is unknown how that future relationship will be structured. Regardless of what happens between the U.K. and European Union, the U.S. - European Union Open Skies air services agreement will continue to apply to air services between the U.S. and the European Union and a new U.S.-U.K. Open Skies agreement will apply to air services between the U.S. and the U.K.

Currently, it is uncertain what will be the terms of the future relationship between the U.K. and the European Union on matters such as trade, customs, financial services and the movement of goods and people. Furthermore, post-Brexit ambiguity or changes in regulations could diminish the value of route authorities, slots or other assets owned by us or our joint venture partners and, therefore, could have a material adverse effect on our business and results of operations and financial condition.

The rapid spread of a contagious illness such as a novel coronavirus, or fear of such an event, can have a material adverse effect on the demand for worldwide air travel and therefore have a material adverse effect on our business and results of operations. As a result of the outbreak of a novel coronavirus first identified in Wuhan, Hubei Province, China, we have temporarily ceased operations in China and the continued spread of the virus could have a significant adverse impact on the demand for air travel and, as a result, our financial results. Moreover, our operations could be negatively affected if employees are quarantined as the result of exposure to a contagious illness. Similarly, travel restrictions or operational issues resulting from the rapid spread of contagious illnesses in a part of the world in which we have significant operations may have a material adverse effect on our business and results of operations.

As part of our ongoing fleet transformation, during 2019 we took delivery of 79 mainline aircraft and nine CRJ-900 aircraft, and removed 52 aircraft from our active mainline fleet. Our operating aircraft fleet, commitments and options at December 31, 2019 are summarized in the following table:


	Current Fleet⁽¹⁾							Commitments
Aircraft Type	Owned	Finance Lease	Operating Lease	Total	Average Age	Purchase	Options
B-717-200	13	22	56	91	18.3	—	—
B-737-700	10	—	—	10	11.0	—	—
B-737-800	73	4	—	77	18.3	—	—
B-737-900ER	88	—	42	130	3.3	—	—
B-757-200	91	8	1	100	22.4	—	—
B-757-300	16	—	—	16	16.9	—	—
B-767-300ER	56	—	—	56	23.6	—	—
B-767-400ER	21	—	—	21	19.0	—	—
B-777-200ER	8	—	—	8	20.1	—	—
B-777-200LR	10	—	—	10	10.8	—	—
A220-100	27	1	—	28	0.6	17	—
A220-300	—	—	—	—	—	50	50
A319-100	55	—	2	57	17.9	—	—
A320-200	58	—	4	62	24.4	—	—
A321-200	53	12	31	96	1.7	31	—
A321-200neo	—	—	—	—	—	100	100
A330-200	11	—	—	11	14.8	—	—
A330-300	28	—	3	31	11.0	—	—
A330-900neo	3	1	—	4	0.5	33	—
A350-900	13	—	—	13	1.8	16	—
MD-88	41	6	—	47	28.7	—	—
MD-90	30	—	—	30	22.7	—	—
Total	705	54	139	898	14.9	247	150

We have agreed to acquire four A350 aircraft from LATAM, which are included as purchase commitments in the table above. In addition, we plan to assume ten of LATAM's A350 purchase commitments from Airbus, with deliveries through 2025. For more information regarding our planned strategic alliance with LATAM, see Note 4 of the Notes to the Consolidated Financial Statements.


	Fleet Type
Carrier	CRJ-200	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total
Endeavor Air, Inc. ⁽¹⁾	42	11	111	—	—	164
SkyWest Airlines, Inc.	75	11	43	—	56	185
Republic Airline, Inc.	—	—	—	22	28	50
Compass Airlines, Inc. ⁽²⁾	—	—	—	—	24	24
GoJet Airlines, LLC ⁽³⁾	—	12	7	—	—	19
Total	117	34	161	22	108	442

As part of a multi-year effort, we have been investing in new aircraft to provide more premium products, an improved customer experience, greater fuel efficiency and better operating economics. Our purchase commitments for additional aircraft at December 31, 2019 are detailed in the following table:


	Delivery in Calendar Years Ending
Aircraft Purchase Commitments	2020	2021	2022	After 2022	Total
A220-100	17	—	—	—	17
A220-300	6	12	18	14	50
A321-200	31	—	—	—	31
A321-200neo	1	41	40	18	100
A330-900neo ⁽¹⁾	7	11	8	7	33
A350-900	4	2	—	10	16
CRJ-900	6	—	—	—	6
Total	72	66	66	49	253

We lease most of the land and buildings that we occupy. Our largest aircraft maintenance base, various equipment maintenance, cargo, flight kitchen and training facilities and most of our principal offices are located at or near the Atlanta airport on land leased from the City of Atlanta. We lease ticket counters, gate areas, operating facilities and other terminal space in most of the airports that we serve. At most airports, we have entered into use agreements which provide for the non-exclusive use of runways, taxiways and other improvements and facilities; landing fees under these agreements normally are based on the number of landings and weight of aircraft. These leases and use agreements generally run for periods of less than one year to 30 years or more, and often contain provisions for periodic adjustments of lease rates, landing fees and other charges applicable under that type of agreement. We also lease aircraft maintenance, equipment maintenance and air cargo facilities at several airports. Our facility leases generally require us to pay the cost of providing, operating and maintaining such facilities, including, in some cases, amounts necessary to pay debt service on special facility bonds issued to finance their construction. We also lease computer facilities, marketing offices, reservations offices and other off-airport facilities in certain locations for varying terms.

Our wholly owned subsidiaries, Monroe and MIPC, own and operate the Trainer refinery and related assets in Pennsylvania. The facility includes pipelines and terminal assets that allow the refinery to supply jet fuel to our airline operations throughout the Northeastern U.S., including our New York hubs at LaGuardia and JFK.

In July 2015, a number of purported class action antitrust lawsuits were filed alleging that Delta, American, United and Southwest had conspired to restrain capacity. The lawsuits were filed in the wake of media reports that the U.S. Department of Justice had served civil investigative demands upon these carriers seeking documents and information relating to this subject. The lawsuits have been consolidated into a single Multi-District Litigation proceeding in the U.S. District Court for the District of Columbia. In November 2016, the District Court denied the defendants' motion to dismiss the claims, and the matter is now proceeding through discovery. Delta believes the claims in these cases are without merit and is vigorously defending these lawsuits.

Our Board of Directors initiated a quarterly dividend program in the September 2013 quarter and has increased the quarterly dividend payment several times, most recently to $0.4025 per share in the September 2019 quarter. The Board expects to be able to continue to pay cash dividends for the foreseeable future, subject to applicable limitations under Delaware law and compliance with covenants in certain of our credit facilities. Dividend payments are dependent upon our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

The following graph compares the cumulative total returns during the period from December 31, 2014 to December 31, 2019 of our common stock to the Standard & Poor's 500 Stock Index and the NYSE ARCA Airline Index. The comparison assumes $100 was invested on December 31, 2014 in each of our common stock and the indices and assumes that all dividends were reinvested.

The following table presents information with respect to purchases of common stock we made during the December 2019 quarter. The total number of shares purchased includes shares repurchased pursuant to our $5 billion share repurchase program, which was publicly announced on May 11, 2017 and will terminate no later than December 31, 2020. Some purchases made in the December 2019 quarter were made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.

In addition, the table includes shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan"). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations 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	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value (in millions) of Shares That May Yet Be Purchased Under the Plan or Programs
October 2019	1,601,569	$	54.35	1,601,569		$	1,210
November 2019	1,280,509	$	56.64	1,280,509		$	1,135
December 2019	1,149,975	$	57.35	1,149,975		$	1,070
Total	4,032,053			4,032,053

We adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the full retrospective transition method in 2018 and recast results from 2016 and 2017 including interim periods therein. Results from 2015 have not been recast for the adoption of this standard.


	Year Ended December 31,
(in millions, except share data)	2019		2018		2017		2016		2015
Operating revenue	$	47,007	$	44,438	$	41,138	$	39,450	$	40,704
Operating expense	40,389		39,174		35,172		32,454		32,902
Operating income	6,618		5,264		5,966		6,996		7,802
Non-operating expense, net	(420)		(113)		(466)		(643)		(645)
Income before income taxes	6,198		5,151		5,500		6,353		7,157
Income tax provision	(1,431)		(1,216)		(2,295)		(2,158)		(2,631)
Net income	$	4,767	$	3,935	$	3,205	$	4,195	$	4,526

Basic earnings per share	$	7.32	$	5.69	$	4.45	$	5.59	$	5.68
Diluted earnings per share	$	7.30	$	5.67	$	4.43	$	5.55	$	5.63
Cash dividends declared per share	$	1.51	$	1.31	$	1.02	$	0.68	$	0.45

The supplemental information below represents the adjustments used in our non-GAAP financial measures. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" where our non-GAAP financial measures are defined and reconciled. Amounts presented below are stated before consideration of income taxes, except for the impact of the Tax Cuts and Jobs Act.


	Year Ended December 31,
(in millions)	2019		2018		2017		2016		2015
MTM adjustments and settlements on hedges	$	14	$	(53)	$	259	$	450	$	1,301
Restructuring and other	—		—		—		—		(35)
Equity investment MTM adjustments	(14)		29		(8)		115		26
MTM adjustments on investments	13		(14)		—		—		—
Tax Cuts and Jobs Act	—		—		(394)		—		—


	Year Ended December 31,
Consolidated⁽¹⁾	2019			2018			2017			2016			2015
Revenue passenger miles (in millions)	237,680			225,243			217,712			213,098			209,625
Available seat miles (in millions)	275,379			263,365			254,325			251,867			246,764
Passenger mile yield	17.79		¢	17.65		¢	16.97		¢	16.81		¢	16.59		¢
Passenger revenue per available seat mile	15.35		¢	15.09		¢	14.53		¢	14.22		¢	14.10		¢
Total revenue per available seat mile	17.07		¢	16.87		¢	16.18		¢	15.66		¢	16.50		¢
Operating cost per available seat mile	14.67		¢	14.87		¢	13.83		¢	12.89		¢	13.33		¢
Passenger load factor	86.3		%	85.5		%	85.6		%	84.6		%	84.9		%
Fuel gallons consumed (in millions)	4,214			4,113			4,032			4,016			3,988
Average price per fuel gallon⁽²⁾	$	2.02		$	2.20		$	1.68		$	1.49		$	1.90
Full-time equivalent employees, end of period	91,224			88,680			86,564			83,756			82,949

This section of this Form 10-K does not address certain items regarding the year ended December 31, 2017. Discussion and analysis of 2017 and year-to-year comparisons between 2018 and 2017 not included in this Form 10-K can be found in "Item 7. Management's Discussion and Analysis" of our Annual Report on Form 10-K for the year ended December 31, 2018.

Delta had a strong year in 2019, delivering record financial results and making significant progress on strategic priorities. We leveraged our brand momentum to drive strong revenue growth and improvement in pre-tax income, margin, earnings per share and free cash flow over 2018. Strategic accomplishments during the year include our renewed agreement with American Express and announcing plans to enter into a strategic alliance with LATAM.

Our pre-tax income for 2019 was $6.2 billion, representing a $1 billion, or 20%, increase compared to the prior year. Diluted earnings per share of $7.30 improved 29% over 2018. Our $8.4 billion of cash flows from operations helped fund $4.9 billion in capital expenditures, resulting in free cash flow of $4.2 billion, representing a $1.8 billion improvement to the prior year. We returned 72% of free cash flow, or $3 billion, to shareholders through share repurchases and dividends. The improvement in earnings and cash flow primarily resulted from a $2.6 billion increase in revenue and lower fuel expense on an 8% decrease in the market price per gallon of fuel and improved fuel efficiency.

We continued to run the world’s most reliable airline and set a new record for zero cancel days with 165 cancel-free days across the system and 281 on our mainline operations. Industry-leading operational performance, our culture of service and continued product investments supported record customer satisfaction scores. In 2019, we increased net promoter scores in every geographic region, highlighted by a 5-point improvement in the Domestic region to 50%.

Compared to 2018, our operating revenue increased $2.6 billion, or 5.8%, on balanced growth across our diverse revenue streams, with premium product ticket revenue driving nearly half of the improvement, and strong growth in both loyalty and MRO revenue. Total revenue per available seat mile ("TRASM") and TRASM, adjusted (a non-GAAP financial measure) increased 1.2% and 2.8%, respectively, compared to the prior year, led by (1) unit revenue growth in our Domestic and Latin regions, (2) demand strength in both business and leisure segments and (3) strong growth in premium products and non-ticket revenues. Total loyalty revenue grew 18% in 2019.

Operating Expense. Operating expense increased $1.2 billion, or 3.1%, primarily due to higher revenue- and capacity-related expenses including wages and profit sharing for employees and contracted services expense. Salaries and related costs were higher due to pay rate increases for eligible employees implemented during 2019, while profit sharing was higher due to increased profitability in 2019. The increase in contracted services expense predominantly relates to services performed by Delta Global Services ("DGS") that were recorded in salaries and related costs prior to the sale of that business in December 2018. These increases were partially offset by lower fuel expense on an 8% decrease in the market price per gallon of fuel and improved fuel efficiency driven by our ongoing fleet transformation.

Our operating cost per available seat mile ("CASM") decreased 1.3% to 14.67 cents compared to 2018, primarily due to lower fuel expense and a 4.6% increase in capacity. Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure) increased 2.0% to 10.52 cents due to the higher revenue- and capacity-related expense increases discussed above.

In 2019, international revenues grew 2.7% on a 3.3% increase in capacity. We continued to make significant progress in expanding our global reach by acquiring an equity stake in Hanjin-KAL, the largest shareholder of Korean Air, and announcing plans to enter into a strategic alliance with LATAM and completing a tender offer to acquire a 20% equity stake which closed in January 2020. Effective in January 2020, we combined our separate transatlantic joint venture agreements with Air France-KLM and Virgin Atlantic into a single three-party transatlantic joint venture. In addition, we continue to make progress on our joint venture agreement with WestJet with respect to trans-border routes between the U.S. and Canada. This agreement remains subject to required regulatory approvals.

Our $8.4 billion of cash flows from operations helped fund $4.9 billion in capital expenditures for the business. As part of our multi-year fleet transformation, we took delivery of 88 new aircraft, including A321-200s, B-737-900ERs, A350-900s, A330-900s, A220-100s and CRJ-900s. These deliveries allowed for the retirement of older, less fuel efficient aircraft, including the announced retirement of our MD-90 fleet by the end of 2022. We also made significant investments in cabin interior refurbishments, Sky Clubs and technology.


	Year Ended December 31,									Increase (Decrease)		% Increase (Decrease)
(in millions)	2019			2018
Ticket - Main cabin	$	21,919		$	21,196		$	723		3.4	%
Ticket - Business cabin and premium products	14,989			13,754			1,235			9.0	%
Loyalty travel awards	2,900			2,651			249			9.4	%
Travel-related services	2,469			2,154			315			14.6	%
Total passenger revenue	$	42,277		$	39,755		$	2,522		6.3	%
Cargo	753			865			(112)			(12.9)	%
Other	3,977			3,818			159			4.2	%
Total operating revenue	$	47,007		$	44,438		$	2,569		5.8	%

TRASM (cents)	17.07		¢	16.87		¢	0.20		¢	1.2	%
Third-party refinery sales⁽¹⁾	(0.04)			(0.21)			0.17			NM
DGS sale adjustment⁽¹⁾	—			(0.09)			0.09			NM
TRASM, adjusted (cents)	17.03		¢	16.57		¢	0.46		¢	2.8	%

Ticket revenues, including both main cabin and business cabin and premium products increased $2.0 billion compared to the year ended December 31, 2018. Business cabin and premium products ticket revenue includes revenues from fare products other than main cabin, including Delta One, Delta Premium Select, First Class and Comfort+. The growth in ticket revenue was driven by strength in the Delta brand and products, capitalizing on healthy industry business and leisure demand. We continue to take delivery of new aircraft that include more premium seats, while also generating higher paid load factor for premium products.

Loyalty travel awards revenue increased $249 million compared to the year ended December 31, 2018 due to growth in mileage redemptions. Travel-related services increased $315 million compared to the year ended December 31, 2018 primarily due to increases in checked baggage and ticket change revenues.


			Increase (Decrease) vs. Year Ended December 31, 2018
(in millions)	Year Ended December 31, 2019		Passenger Revenue		RPMs(Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	$	30,367	7.8	%	6.8	%	5.3	%	1.0	%	2.4	%	1.2	pts
Atlantic	6,381		3.5	%	4.8	%	4.4	%	(1.3)	%	(0.9)	%	0.4	pts
Latin America	3,002		4.0	%	(0.1)	%	(0.9)	%	4.0	%	4.9	%	0.7	pts
Pacific	2,527		(0.6)	%	3.5	%	5.0	%	(4.0)	%	(5.3)	%	(1.2)	pts
Total passenger revenue	$	42,277	6.3	%	5.5	%	4.6	%	0.8	%	1.7	%	0.8	pts

Passenger revenue related to our international regions increased 2.7% year-over-year primarily due to capacity growth in the Atlantic region and yield strength in the Latin America region. This growth in passenger revenue was achieved despite the negative impact of foreign currency fluctuations.

Atlantic unit revenues decreased due to foreign currency fluctuations between the U.S. dollar and the Euro and British pound, the uncertain economic outlook in Europe and increased industry capacity. These conditions were partially offset by growth in premium product demand and strong U.S. point of sale.

Unit revenue increased in Latin America principally as a result of yield growth, mainly due to reduced industry capacity in Brazil and improvements in Mexico beach markets. In the September 2019 quarter we announced our plan to enter into a strategic alliance with LATAM, which is expected to provide great customer convenience, a more seamless travel experience and to better connect customers between North and South America.

Unit revenue decreased in the Pacific region primarily on persistent economic and trade related uncertainty, foreign currency fluctuations and increased capacity to China, Japan and Korea due to our network transformation. Despite these challenges, our joint venture with Korean Air has enabled solid traffic growth and we have continued to reshape our Pacific network with the announcements that in the March 2020 quarter we will transfer our U.S.-Tokyo services from Narita to Haneda airport, Tokyo's preferred airport for corporate customers, and shift our Beijing service to the new Beijing Daxing airport.

Starting in February 2020, we temporarily suspended flights between the U.S. and China as the result of an outbreak of a novel coronavirus originating in Wuhan, Hubei Province, China. We have suspended flights between the U.S. and China through April 30, will continue to monitor the situation closely and may make additional adjustments.

Effective January 1, 2019, we amended our co-brand agreement with American Express, and we also amended other agreements with American Express during the March quarter. The new agreements increase the value we receive and extend the terms to 2029. Under the agreements, we sell miles to American Express and allow American Express to market its services or products using our brand and customer database. The products and services sold with the miles (such as award travel, priority boarding, baggage fee waivers, lounge access and the use of our brand) are consistent with previous agreements. We continue to use the accounting method that allocates the consideration received based on the relative selling prices of those products and services. The increase in loyalty program revenues are primarily related to brand usage by American Express.

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes aircraft maintenance provided to third parties, our vacation wholesale operations, our private jet operations and refinery sales to third parties. Refinery sales to third parties, which are at or near cost, decreased $451 million compared to 2018. The 2018 results also included $244 million of third-party revenue from DGS, which was sold in December 2018. These decreases were mitigated by growth in our MRO revenues, which increased $175 million to $877 million during 2019.

In January 2020, we combined Delta Private Jets, our wholly owned subsidiary which provides private jet operations, with Wheels Up. Upon closing, we received a 27% equity stake in Wheels Up. Delta Private Jets will no longer be consolidated and annual revenues of approximately $200 million, which have historically been generated ratably through the year, will no longer be reflected in ancillary businesses and refinery revenue.

Miscellaneous. Miscellaneous revenue is primarily composed of lounge access and codeshare revenues, with lounge access revenue driving the majority of the $160 million increase compared to 2018. We continually enhance the customer experience at our lounges, which also included opening three new Sky Clubs during 2019 in Austin, Phoenix and New Orleans.


	Year Ended December 31,						Increase (Decrease)		% Increase (Decrease)
(in millions)	2019		2018
Salaries and related costs	$	11,225	$	10,743	$	482	4.5	%
Aircraft fuel and related taxes	8,519		9,020		(501)		(5.6)	%
Regional carriers expense, excluding fuel	3,584		3,438		146		4.2	%
Contracted services	2,641		2,175		466


Delaware			58-0218548
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Post Office Box 20706
Atlanta, Georgia			30320-6001
(Address of principal executive offices)			(Zip Code)


			Page
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			98

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE			98

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES			99

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES			99

ITEM 16. FORM 10-K SUMMARY			102

SIGNATURES			103


	December 31,
(in millions)	2019		2018		2017		2016		2015
Total assets	$	64,532	$	60,266	$	53,671	$	51,850	$	53,134
Debt and finance leases (including current maturities)	11,160		9,771		8,834		7,332		8,329
Stockholders' equity	15,358		13,687		12,530		11,277		10,850


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


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


Table of Contents
			Page
Forward-Looking Statements			1

PART I

ITEM 1. BUSINESS			2
General			2
Executive Officers of the Registrant			12

ITEM 1A. RISK FACTORS			13
Risk Factors Relating to Delta			13
Risk Factors Relating to the Airline Industry			18

ITEM 1B. UNRESOLVED STAFF COMMENTS			21

ITEM 2. PROPERTIES			22
Flight Equipment			22
Ground Facilities			23

ITEM 3. LEGAL PROCEEDINGS			24

ITEM 4. MINE SAFETY DISCLOSURES			24

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES			25

ITEM 6. SELECTED FINANCIAL DATA			27

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			29
Financial Highlights			29
Results of Operations			31
Non-Operating Results			35
Income Taxes			35
Refinery Segment			36
Financial Condition and Liquidity			37
Contractual Obligations			40
Critical Accounting Policies and Estimates			41
Supplemental Information			46
Glossary of Defined Terms			47

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			48

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			49

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			96

ITEM 9A. CONTROLS AND PROCEDURES			96

ITEM 9B. OTHER INFORMATION			98

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT			98

ITEM 11. EXECUTIVE COMPENSATION			98


Year	Gallons Consumed⁽¹⁾ (in millions)	Cost⁽¹⁾⁽²⁾ (in millions)		Average Price Per Gallon⁽¹⁾⁽²⁾		Percentage of Total Operating Expense⁽¹⁾⁽²⁾
2019	4,214	$	8,519	$	2.02	21.1	%
2018	4,113	$	9,020	$	2.20	23.0	%
2017	4,032	$	6,756	$	1.68	19.2	%