Delta Air Lines 2004 Annual Report
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2 Officers & Directors 4 Global Diversity & Community Affairs 8 Safety, Security & Environment 12 Delta Domestic Destinations 14 Delta International Destinations 16 Corporate Governance 17 Ethics & Business Conduct 18 Consolidated Financial Highlights 19 Form 10-K IBC Shareowner Information >> DEAR SHAREOWNERS, CUSTOMERS + EMPLOYEES: Though not without hardship, in many respects 2004 was a remarkable year for Delta Air Lines. Under the leadership of a new and invigorated management team, and thanks to the diligence, sacrifice and ingenuity of Delta people and commitments from our stakeholders and partners, our airline proudly proved its mettle by undertaking an unprecedented transformation that gave us an opportunity to avoid the court-supervised restructuring path some other carriers could not. There is no question that the aviation marketplace, in the last and more work still ahead, Delta by the end of 2004 had made throes of deregulation, has changed permanently and funda- real progress pursuing the “Delta Solution”: mentally – and will continue to change. New competitors, new • With an unrelenting focus on its Profit Improvement Initiatives technologies and new customer travel preferences and patterns (PII) and other cost reductions, Delta secured $2.3 billion of the have converged to shake up an industry with too much capacity $5 billion in annual benefits estimated as necessary to lower its and complexity and too little flexibility. cost structure and hit initial financial viability targets in 2006. As an old Chinese proverb observes, “Unless we change our • At the same time, we launched improvements to our product, direction, we’re likely to end up where we’re headed.” After services, network and fleet, adding passenger-friendly technolo- thoroughly analyzing the harsh financial pressures and the gies and initiating refurbishment of aircraft interiors. Delta’s competitive reality of low-cost carriers’ continued expansion, entire infrastructure was retooled to prepare for the early 2005 Delta embarked upon an ambitious and accelerated journey to launch of two innovative and industry-leading initiatives: reinvent and redirect itself. Our goal is to meet the competition SimpliFares™ and the redesign of Delta’s route network. head-on by becoming a more efficient and simplified airline • SimpliFares™ permanently changed Delta’s domestic pricing uniquely designed to improve the customer travel experience structure to be more competitive and consistent. Customers while simultaneously cutting costs. On September 8, 2004, Delta’s more frequently used our improved website, delta.com, to make comprehensive Transformation Plan was announced to the world, reservations and purchase tickets. And, revenues from the and the vision for the right airline for the new era was unveiled. increased traffic fueled by more satisfied customers helped offset the lower fares, exceeding expectations for the Cincinnati In the face of unprecedented fi nancial losses, including a test market and accelerating the 2005 SimpliFares™ rollout in $5.2 billion net loss for 2004, and with considerable challenges the 48 contiguous states. >> OFFICERS + DIRECTORS Delta Air Lines Officers Gerald Grinstein James M. Whitehurst Michelle McKinney Frymire Michael Quiello Chief Executive Officer Senior Vice President and Vice President – Finance Vice President – Corporate Michael J. Palumbo Chief Network and Planning Marketing and International Safety, Security and Officer Compliance Executive Vice President and Hank Halter Chief Financial Officer D. Scott Yohe Vice President and Controller Steven P. Scheper Gary Beck Senior Vice President – Elizabeth H. Johnston Vice President – Government Affairs Reservation Sales Senior Vice President – Flight Vice President – Human Operations and Chief Pilot Wayne Aaron Resources Neil Stronach 2 Anthony N. Charaf Vice President – Corporate Gregory W. Kennedy Vice President – Operations, Strategic Planning Planning, Control and Senior Vice President – Vice President – Airport Reliability Technical Operations Harlan R. Bennett Customer Service – West John J. Varley Paulette L. Corbin Vice President – Robert L. Kight Revenue Management Vice President – Associate Senior Vice President – Vice President – General Counsel In-Flight Service Harold L. Bevis Compensation and Benefits Mona Warwar Richard W. Cordell Vice President – Leslie P. Klemperer Public Affairs Vice President – Senior Vice President – Vice President – Deputy Corporate Tax Airport Customer Service Doug Blissit General Counsel and Vice President – Secretary Todd G. Helvie Delta Subsidiaries Network Analysis Senior Vice President Dan A. Lewis W. E. (Skip) Barnette and Treasurer Walter A. Brill Vice President – Corporate President – ASA Holdings, Joseph C. Kolshak Vice President – Deputy Communications Inc., and Atlantic Southeast General Counsel Senior Vice President Rob Maruster Airlines, Inc. and Chief of Operations Robert T. Cirulnick Vice President – Airport Fred Buttrell Lee A. Macenczak Vice President – Chief Customer Service – Atlanta President – Comair Holdings, Accounting Officer Worldport Senior Vice President LLC & Comair, Inc. and Chief Customer Aaron Dent James V. Maucere Jeffrey T. Fisher Service Officer Vice President – Supply Vice President – Maintenance Vice President Paul G. Matsen Chain Management Operations Delta Connection, Inc. Senior Vice President and Pamela Elledge Patrice G. Miles Joanne D. Smith Chief Marketing Officer Vice President – Sales Vice President – Consumer President – Song™ Gregory L. Riggs and Distribution Marketing Senior Vice President – Carolyn Ezzell Jerome Miller General Counsel and Chief Vice President – Airport Vice President – Global Corporate Affairs Officer Customer Service – East Diversity and Community Jorge L. Fernandez Affairs Vice President – International and Alliances Board of Directors Edward H. Budd David R. Goode Gerald Grinstein Arthur E. Johnson Karl J. Krapek Retired Chairman Chairman of the Board Chief Executive Officer, Senior Vice President, Retired President of the Board and Chief and Chief Executive Delta Air Lines, Inc. Corporate Strategic and Chief Operating Executive Officer, The Officer, Norfolk Development, Officer, United Travelers Corporation Southern Corporation Lockheed Martin Technologies Corporation Corporation DELTA AIR LINES DELTA 2004 ANNUAL REPORT 3 Paula Rosput Reynolds John F. Smith, Jr. Joan E. Spero Kenneth B. Woodrow Chairman of the Board, Retired Chairman President, Doris Duke Retired Vice Chairman President and Chief of the Board and Charitable Foundation and President, Executive Officer, Chief Executive Target Corporation AGL Resources, Inc. Officer, General Motors Corporation Board Committees Finance Representative of Air Line Dale C. Williams effective April 1, 2005 John F. Smith, Jr., Chair Pilots Association, In-Flight Service Edward H. Budd International Audit Doug Pincu David R. Goode Kenneth C. Rogers Edward H. Budd, Chair Reservation Sales and Arthur E. Johnson Associate Non-Voting Member John F. Smith, Jr. City Ticket Offices Joan E. Spero Karl J. Krapek of the Board of Directors Christopher L. Muise Kenneth B. Woodrow Personnel & Compensation Delta Board Council Supervisory and Corporate Governance David R. Goode, Chair Representatives Administrative Joan E. Spero, Chair Edward H. Budd Larry J. Stites Jack Roth Karl J. Krapek Arthur E. Johnson Airport Customer Service Technical Operations Paula Rosput Reynolds Paula Rosput Reynolds and Air Logistics John F. Smith, Jr. Kenneth B. Woodrow >> GLOBAL DIVERSITY + COMMUNITY AFFAIRS 4 Our Global Diversity and Community Affairs commitment enhances and leverages our diverse workforce for organizational effectiveness. We have strong relationships with community and nonprofit organizations. Delta is a generous company known for more than its financial A Spirit of Inclusion contributions. Our giving often includes executive leadership, One of the keys to Delta’s future success is its commitment to employee volunteers who contribute thousands of hours of their diversity. Delta believes diversity is the culmination of the best time each year, in-kind donations and other forms of community of various backgrounds, points of view and experiences, working support. Since 2000, more than 4,000 Delta employees have together to create and deliver unprecedented value to our customers. assisted with Habitat for Humanity projects and more than 3,000 employees participated in a variety of fundraising walks. In fact, We are committed to building a workforce with a sense of inclusion in 2004, over 5,000 Delta employees worked as volunteers for at heart. Inclusion not only has relevance at the individual level, nonprofit organizations, providing the equivalent of $2 million to it influences our relationships with our corporate and community the community. partners as well. By understanding and pursuing the goal of an inclusive workforce, we strengthen Delta’s competitive advantage Delta has a long history as a trusted community steward and and our ability to provide value to our stakeholders. good corporate citizen. We will build on that reputation as we grow our relationships with organizations such as the United Diversity Education Tools: A vital ingredient of our diversity initiative Way, the American Red Cross, March of Dimes and Habitat for is our commitment to employee growth. In 2004, Delta began a Humanity. We will also help ensure that our people – our key program that provides comprehensive educational tools to our asset – continue to