What changed in this filing

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Item 1. Business

2024-02-12 compared with 2023-02-10 · 63 added, 255 removed, 139 unchanged (70% of the section changed)

GHG Emissions .

Aviation industry GHG emissions, particularly carbon emissions, and their impact on climate change have become a focus in the international community and within the U.S.

In 2016, the International Civil Aviation Organization ("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 goal for the aviation industry to achieve carbon-neutral growth in international aviation beginning in 2021.

Any growth above the baseline would need to be addressed using either eligible carbon offsets or a lower carbon fuel.

The baseline for establishing airlines’ obligations under CORSIA was originally set as an average of 2019 and 2020 emissions.

However, given the COVID-19 pandemic and resulting unprecedented reduction in international travel, in June 2020 ICAO removed 2020 from the baseline calculation for the first phase of CORSIA, from 2021 to 2023.

In 2022, ICAO established a new, more stringent CORSIA baseline of 85% of 2019, which will apply starting in 2024 through 2035.

A pilot phase of the CORSIA program runs from 2021 through 2023, 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 agreed to participate in these voluntary phases.

Participation in the second phase is mandatory for certain countries, including the United States.

government has not yet enacted legislation to mandate that U.S.

operators participate in CORSIA.

Nonetheless, Delta has voluntarily submitted verified emissions reports on its annual international emissions.

Additionally, the EU requires 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 Economic Area ("EEA") 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 scope of the ETS has been narrowed so that it currently applies only to flights within the EEA through 2023 to align with the pilot phase of CORSIA.

In late 2022, the EU agreed on legislative language that would extend the narrow scope of EU ETS through 2026.

Extension beyond 2026 would be conditioned on the performance of CORSIA.

The EU is expected to finalize this legislation in early 2023.

As a result of the United Kingdom's ("UK") withdrawal from the EU, UK flights are no longer part of the EU ETS and are instead regulated under a separate UK ETS scheme.

UK ETS is applicable to UK domestic flights and flights from the UK to EEA countries.

In 2017, ICAO also adopted aircraft certification standards to reduce carbon dioxide ("CO 2 ") emissions from new aircraft.

The new aircraft certification standards applied to new fleet types in 2020 and will apply to in-production aircraft starting in 2023 but no later than 2028.

The new aircraft certification standards applied to new fleet types in 2020 and will apply to in-production aircraft no later than 2028.

These standards will not apply to existing in-service aircraft.

In 2016, the EPA issued a final finding under the Clean Air Act that GHGs threaten the public health and welfare, and further determined that certain classes of aircraft engines cause or contribute to GHGs.

The endangerment finding did not establish standards but triggered an obligation for the EPA to regulate GHG emissions from certain aircraft engines.

In January 2021, the EPA finalized GHG emission standards for new aircraft engines designed to implement the ICAO standards on the same timeframe contemplated by ICAO.

In 2021, the EPA finalized GHG emission standards for new aircraft engines designed to implement the ICAO standards on the same timeframe contemplated by ICAO, and these standards have been upheld in response to legal challenges.

Like the ICAO standards, the final EPA standards would not apply to engines on in-service aircraft.

The final standards have been challenged by several states and environmental groups.

On November 15, 2021, the EPA announced that it would defend the current standards while simultaneously calling for ambitious new international CO 2 standards at the ICAO negotiations.

The outcome of the legal challenge cannot be predicted at this time.

The airline industry 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 GHG emissions in various jurisdictions.

For example, in 2023, the EU is expected to finalize a sustainable aviation fuel blending mandate for aviation fuel suppliers beginning in 2025.

Individual EU member states have been developing their own requirements, including for example, separate SAF mandates in France and Sweden in 2022.

In the United States, various exploratory discussions continue around approaches to address climate change, such as carbon pricing, without a clear legislative path forward.

For example, in 2023, the EU adopted legislation that will impose a SAF mandate on fuel supplied at EU airports.

The mandate requires that, of the jet fuel supplied in the EU, 2% must be SAF beginning in 2025, and the percentage increases incrementally over time to 70% in 2050.

This mandate is expected to increase the cost of SAF in the EU.

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.

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We are monitoring and evaluating the potential impact of such developments.

Delta Air Lines, Inc.

| 2022 10-K 13

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.

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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 expenditures in order for our aircraft to comply with the restrictions.

For example, in 2022, to reduce noise, the Netherlands announced plans to reduce the maximum number of flights authorized annually at Amsterdam’s Schiphol Airport.

Before implementing the new limitations, the Dutch government must assess alternatives, including noise impact and cost effectiveness.

In addition, foreign governments may enact or allow airports to enact similar restrictions, which could adversely impact our international operations or require significant expenditures in order for our aircraft to comply with the restrictions.

For example, in 2022, to reduce noise, the Netherlands announced a multi-phase plan to reduce the maximum number of flights authorized annually at Amsterdam’s Schiphol Airport.

In 2023, airlines and airline associations, including Delta and KLM, challenged the initial phase of the plan.

The legal challenge resulted in a ruling against the industry, but an appeal is currently pending before the Supreme Court of the Netherlands.

The U.S., the European Commission and other governments also raised legal concerns about the plan with the Dutch government.

In November 2023, the Netherlands suspended the initial phase of the plan;

however, the government continues to support a second-phase plan to reduce flights at Schiphol.

The outcome cannot be determined at this time.

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Because Monroe is able to blend 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 speculation about what the EPA and/or the U.S.

Market prices for RINs have been volatile and marked by periods of sharp increases and decreases primarily in response to speculation about what the EPA and/or the U.S.

Congress will do with respect to compliance obligations.

In November 2022, the EPA issued proposed RFS volume requirements for 2023, 2024 and 2025, which are expected to be finalized by June 2023.

The EPA's proposed ethanol mandates for 2023, 2024, and 2025 are billions of gallons above the projected ethanol demand for those years, which has resulted in an increase to already high prices for RINs.

In June 2023, the EPA finalized RFS volume requirements for 2023, 2024 and 2025.

These volume requirements are below projected production of Transportation Fuels, which has resulted in a decrease in the price of RINs.

Civil Reserve Air Fleet Program

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Delta Air Lines, Inc.

| 2022 10-K 14

| 2023 Form 10-K 14

Information About Our Executive Officers

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Laughter, Age 53:

Executive Vice President - Chief of Operations of Delta since June 2021;

President - Delta TechOps and Chief of Operations since October 2023;

Executive Vice President - Chief of Operations of Delta (June 2021 - October 2023);

Senior Vice President and Chief of Operations of Delta (October 2020 - June 2021);

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Vice President - Marketing and Customer Service of Song (November 2002 - December 2004).

Mike Spanos, Age 59 :

Chief Operating Officer of Delta since June 2023;

President and Chief Executive Officer of Six Flags Entertainment Corporation (November 2019 - November 2021);

Chief Executive Officer, Asia, Middle East and North Africa of PepsiCo, Inc.

(January 2018 - November 2019);

previously served in a variety of management roles of increasing responsibility at PepsiCo, Inc.

Delta Air Lines, Inc.

| 2023 Form 10-K 15

Additional Information

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Delta Air Lines, Inc.

| 2022 10-K 15

| 2023 Form 10-K 16

In addition to the other information set forth in this report, you should carefully consider the following material risk factors applicable to Delta.

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Risk Factors Relating to Delta

We have a significant amount of fixed obligations and incurred significant amounts of new debt in a short period in response to the COVID-19 pandemic.

Insufficient liquidity may have a material adverse effect on our financial condition and business.

We have a significant amount of existing fixed obligations, including aircraft lease and debt financings, leases of airport property and other facilities, and other material cash obligations.

In addition, we have substantial commitments for capital expenditures.

We had approximately $9.4 billion in cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity") as of December 31, 2022;

however, our future liquidity could be negatively affected by the risk factors discussed in this Form 10-K, and in other filings we may make from time to time with the SEC.

If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain financial covenants in our financing and credit card processing agreements or with other material provisions of our contractual obligations.

Agreements governing our debt, including our credit facilities and our SkyMiles financing agreements, include financial and other covenants.

Certain of these covenants impose restrictions on our business, and failure to comply with any of the covenants in these agreements could result in events of default.

Our debt agreements contain various affirmative, negative and financial covenants, including our credit facilities and our SkyMiles financing agreements, each of which contains a minimum liquidity covenant.

Certain of our debt agreements also contain collateral coverage ratios, and our SkyMiles financing agreements contain a debt service coverage ratio.

A decline in these coverage ratios, including due to factors that are beyond our control, could require us to post additional collateral or trigger an early amortization event.

Our SkyMiles financing agreements also restrict our ability to, among other things, change the policies and procedures of the SkyMiles program in a manner that would reasonably be expected to materially impair repayment of our SkyMiles debt.

Complying with certain of the covenants in our debt agreements and other restrictive covenants that may be contained in any future debt agreements could limit our ability to operate our business and to take advantage of business opportunities that are in our long-term interest.

The terms of any future indebtedness we may incur could include more restrictive covenants.

While the covenants in our debt agreements are subject to important exceptions and qualifications, if we fail to comply with them and are unable to obtain a waiver or amendment, refinance the indebtedness subject to these covenants or take other mitigating actions, an event of default would result.

These arrangements also contain other events of default customary for such financings.

If an event of default were to occur, the lenders or noteholders could, among other things, declare outstanding amounts due and payable and where applicable and subject to the terms of relevant collateral agreements, repossess collateral, including aircraft or other valuable assets.

In addition, an event of default or acceleration of indebtedness under one agreement could result in an event of default under other of our financing agreements.

The acceleration of significant indebtedness could require us to seek to renegotiate, repay or refinance the obligations under our financing arrangements, and there is no assurance that such renegotiation or refinancing efforts would be successful.

Delta Air Lines, Inc.

| 2022 10-K 16

We are at risk of losses and adverse publicity stemming from a serious accident involving our aircraft or aircraft of our airline partners.

An aircraft crash or other serious accident involving our aircraft or those of our airline partners could expose Delta to significant liability.

An aircraft crash or other serious accident involving our aircraft or those of our airline partners could expose us to significant liability.

Although we believe that our insurance coverage is appropriate, we may be forced to bear substantial losses from an accident in the event that the coverage was not sufficient.

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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 our networks and systems, and those of our business partners and service providers, on which this type of information is stored, processed and maintained is critical to our business operations and strategy.

The secure operation of our networks and systems, and those of our business partners and third-party service providers, on which this type of information is stored, processed and maintained is critical to our business operations and strategy.

These networks and systems are subject to an increasing threat of continually evolving cybersecurity risks, which we must manage.

We expect unauthorized parties to continue attempting to gain access to our systems or information, or those of our business partners and service providers, including through fraud or other means of deception, or introduction of malicious code, such as malware and ransomware.

If successful, these actions could cause harm to our computer systems or compromise data stored on our computer networks or those of our business partners and service providers, potentially causing us to incur remedial, legal and other costs, which could be material.

Hardware or software we or our business partners or service providers develop, acquire or use in connection with our systems may contain defects that could unexpectedly compromise information security.

We expect unauthorized parties to continue attempting to gain access to our systems or information, or those of our business partners and third-party service providers, including through fraud or other means of deception, or introduction of malicious code, such as malware and ransomware.

If successful, these actions could cause harm to our computer systems or compromise data stored on our computer networks or those of our business partners and third-party service providers, potentially causing us to incur remedial, legal and other costs, which could be material.

Hardware or software we or our business partners or third-party service providers develop, acquire or use in connection with our systems may contain defects that could unexpectedly compromise information security.

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 assessing risk and reviewing our procedures, processes and technologies, we continue to educate our people about these risks and to monitor, review and update the process and control requirements we expect third parties and vendors to leverage and implement for the protection of information regarding our customers, employees or business partners that is in their care.

In addition to continuously assessing risk and reviewing our procedures, processes and technologies, we continue to educate our employees about these risks and to monitor, review and update the process and control requirements we expect third parties and vendors to leverage and implement for the protection of information regarding our customers, employees or business partners 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.

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We are also subject to evolving global privacy and security regulatory obligations and an increasing customer focus on privacy issues and data security in the United States and abroad, as well as to geopolitical risks associated with international data transfer.

The compromise of our or our business partners’ or service providers’ technology systems resulting in the loss, interruption, disclosure, misappropriation of, or access to, our information or that of our customers, employees or business partners could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy and security of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business.

The compromise of our or our business partners’ or third-party service providers’ technology systems resulting in the loss, interruption, disclosure, misappropriation of, or access to, our information or that of our customers, employees or business partners could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy and security 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.

Delta Air Lines, Inc.

| 2022 10-K 17

| 2023 Form 10-K 17

Disruptions of our information technology infrastructure could interfere with our operations, possibly having a material adverse effect on our business.

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A significant individual, sustained or repeated failure of our information technology infrastructure, including third-party networks we utilize and on which we depend, could impact our operations and our customer service, result in increased costs and damage our reputation.

While we have in place initiatives to prevent disruptions and disaster recovery plans and continue to invest in improvements to these initiatives and plans, we have previously experienced infrastructure disruptions and these measures may not be adequate to prevent a future business disruption and any material adverse financial and reputational consequences to our business as recent outages of large cloud providers whom we rely on has shown.

These measures may not be adequate to prevent a future business disruption and any material adverse financial and reputational consequences to our business as recent outages of large cloud providers whom we rely on has shown.

Failure of the technology we use to perform effectively could have a material adverse effect on our business.

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If this technology does not perform effectively, including as a result of the implementation or integration of new or upgraded technologies or systems, our business and operations would be negatively affected, which could be material.

Our commercial relationships with airlines in other parts of the world and the investments that we have in certain of those carriers may not produce the results or returns we expect.

An important part of our strategy to expand our global network has been to develop and expand strategic relationships with a number of airlines through joint ventures and other forms of cooperation and support, including equity investments.

We expect to continue exploring ways to deepen our alliance relationships with other carriers as part of our global business strategy.

These relationships and investments involve significant challenges and risks, including that joint ventures or cooperation agreements such as our agreement with Aeroméxico may be subject to ongoing review and renewal requirements and may not generate the expected financial results, or that we may not realize a satisfactory return on our investments.

We are dependent on these other carriers for significant aspects of our network in the regions in which they operate.

The COVID-19 pandemic significantly impacted the operations of our airline partners and, similar public health threats that may arise could adversely affect the expansion of strategic relationships in the future.

These carriers have incurred significant financial losses as a result of the pandemic, and some were forced to seek protection under applicable bankruptcy laws.

For example, following the onset of the pandemic, Grupo Aeroméxico and LATAM filed voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code ("bankruptcy process"), from which they successfully emerged in the March 2022 quarter and the December 2022 quarter, respectively, and Virgin Atlantic undertook a voluntary recapitalization process in the UK that was completed in September 2020.

During the December 2021 quarter, we announced additional investments in each of these carriers.

As discussed further in Note 4 of the Notes to the Consolidated Financial Statements, due to the effects of the COVID-19 pandemic, the carrying value of our equity investments in these three carriers was reduced to zero prior to our additional investments.

In the future if any airline partner that may seek to restructure or recapitalize is unable to do so successfully or if our commercial arrangements with any of these partners are not maintained, any investments or other assets associated with those partners could become impaired, and our business and results of operations could be materially adversely affected.

Delta Air Lines, Inc.

| 2022 10-K 18

A significant disruption in, or other problems with respect to, the operations or performance of third parties on which we rely, including third-party carriers, could have a material adverse effect on our business and results of operations.

We rely on the operations and performance of third parties in a number of areas that are important to our business, including third-party regional carriers, international alliance partners and ground operation providers at some airports.

While we have agreements with certain of these third parties that define expected service performance, we do not have direct control over their operations.

To the extent that the operations of a third-party on which we rely is significantly disrupted or if these third parties experience significant performance issues (including failing to satisfy any applicable performance standards) or fail to meet any applicable compliance requirements, our revenue may be reduced, our expenses may be increased and our reputation may be harmed, any or all of which could result in a material adverse effect on our business and results of operations.

Some regional carriers, including our wholly owned subsidiary, Endeavor, are facing a shortage of qualified pilots and experiencing operating constraints as a result.

If this shortage becomes more widespread, third-party regional carriers may not be able to comply with their obligations to us, and Endeavor may not be able to perform as expected, which could reduce our expected capacity and affect our revenue, resulting in a material adverse effect on our business and results of operations.

We may never realize the full value of our intangible assets or our long-lived assets, causing us to record impairments that may materially adversely affect our results of operations.

In accordance with applicable accounting standards, we are required to test our goodwill and other indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment.

In addition, we are required to test certain of our other assets for impairment where there is an indication that an asset may be impaired.

During the fiscal year ended December 31, 2020, we recorded significant impairment and related charges resulting from the acceleration of our fleet simplification strategy and the write-down of investments in certain airline partners, stemming from the impact of the COVID-19 pandemic.

We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, route authorities, and airport slots, unfavorable trends in forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties.

Further impairment charges could have a material adverse effect on our results of operations.

Employee strikes and other labor-related disruptions may have a material adverse effect on our operations.

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, 2022, 20% 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.

In January 2023, a tentative agreement was ratified by ALPA’s Delta Master Executive Council ( " MEC " ) and is subject to ratification by Delta’s pilots through a vote that is scheduled to close on March 1, 2023.

Separately, the NLRA governs Monroe’s relations with the union representing their employees, 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 in 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 which 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.

Delta Air Lines, Inc.

| 2022 10-K 19

Our results can fluctuate due to seasonality and other factors.

Our results of operations are impacted by a number of factors including seasonality and changing economic and other conditions beyond our control.

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 quarterly basis.

Other factors that may affect our results include severe weather conditions and natural disasters (or other environmental events), which could significantly disrupt service and create air traffic control problems.

In addition, increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons, floods or other severe weather events, including from changes in the global climate and rising global temperatures, 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.

Because of fluctuations in our results from seasonality and other factors, results of operations for a historical period are not necessarily indicative of results of operations for a future period and results of operations for an interim period are not necessarily indicative of results of operations for an entire year.

Our business and results of operations are dependent on the price of aircraft fuel.

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Our results of operations are significantly impacted by changes in the price of aircraft fuel.

Over the last decade, fuel prices have been highly volatile and at times have increased substantially.

From 2020 to 2022, our average annual fuel price per gallon has increased from $1.64 to $3.36 with significant volatility during that period.

Fuel costs represented 21%, 24% and 20% of our operating expense in 2023, 2022 and 2021, respectively.

Fuel prices are highly volatile and at times have increased substantially.

In 2023, our average fuel price per gallon was $2.82, ranging from a monthly low of approximately $2.41 per gallon to a monthly high of approximately $3.18 per gallon.

We acquire a significant amount of jet fuel from Monroe and through strategic agreements associated with the refinery that Monroe has with third parties.

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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.

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.

Significant extended disruptions in the supply of aircraft fuel, including from Monroe, could have a material adverse effect on our business and results of operations.

Weather-related events, natural disasters, political disruptions or disputes 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.

Weather-related events, natural disasters, political disruptions or disputes involving oil-producing countries, changes in governmental policy concerning aircraft fuel production, transportation or taxes, changes in refining capacity or refining priorities, 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 business and results of operations.

The disruption or interruption of production at the refinery could have a negative impact on our ability to acquire jet fuel needed for our operations.

Delta Air Lines, Inc.

| 2023 Form 10-K 18

Unplanned disruptions or interruptions of production at the refinery could have a negative 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.

If the refinery were to experience an unexpected 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.

If Monroe's cost of producing non-jet fuel products exceeds the value it receives for those products, the financial benefits we expect to achieve through the ownership of the refinery and our consolidated results of operations could be materially adversely affected.

Delta Air Lines, Inc.

| 2022 10-K 20

An environmental or other incident associated with the operation of the Monroe refinery could have a material adverse effect on our consolidated financial results if insurance is unable to cover a significant liability.

In addition, such an incident could damage our reputation.

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.

The operation of the refinery by Monroe is subject to significant environmental regulation.

Failure to comply with environmental regulations or the enactment of additional regulation applicable to Monroe could have a material adverse effect on our consolidated 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, which are subject to change over time.

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, more stringent 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 mandates 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, by purchasing RINs in the open market or through a combination of blending and purchasing RINs.

Because Monroe is able to blend only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary market.

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 primarily in response to speculation about what the EPA and/or the U.S.

Congress will do with respect to compliance obligations.

We cannot predict these actions or the future prices of RINs.

Monroe’s purchase of RINs at elevated prices in the future 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.

Significant damage to our reputation and brand, including as a result of significant adverse publicity or inability to achieve certain sustainability goals, could materially adversely affect our business and financial results.

Maintaining our reputation and global brand is critical to our business.

We operate in a highly visible and public environment with significant real-time 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 portray interactions with Delta, without context, in a manner that can be quickly and broadly disseminated.

To the extent we are unable to respond in a timely and appropriate manner to adverse publicity, our brand and reputation may be damaged.

Delta Air Lines, Inc.

| 2022 10-K 21

Our reputation and brand could also be adversely impacted by, among other things, failure to make progress toward and achieve our environmental sustainability and diversity, equity and inclusion goals, as well as public pressure from investors or policy groups to change our policies or negative public perception of the environmental impact of air travel.

For example, we have established ambitious goals to reduce our greenhouse gas emissions, with the long-term goal to achieve net zero greenhouse gas emissions across our airline operation and its value chain by no later than 2050, subject to validation of this long-term goal by SBTi (for which we cannot predict if and when the validation will occur).

Achieving these ambitious goals will require significant capital investment from manufacturers and other stakeholders, as we are unable to achieve these goals using our existing fleet, current technologies and available fuel sources.

We are continuing to develop our climate strategy and transition plan;

however, our ability to execute on such a plan is subject to substantial risks and uncertainties, as it is dependent on the actions of governments and third parties and will require, among other things, significant capital investment, including from third parties, research and development from manufacturers and other stakeholders, along with government policies and incentives to reduce the cost, and incent production, of SAF and other technologies that are not presently in existence or available at scale.

Significant damage to our reputation and brand could have a material adverse effect on our business and financial results, including as a result of litigation related to any of these matters.

If we lose senior management and other key employees and they are not replaced by individuals with comparable skills, or we otherwise fail to maintain our company culture, our business and results of operations could be materially adversely affected.

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 we are not able to replace these persons with individuals with comparable skills, or we otherwise fail to maintain our company culture, our performance could be materially adversely impacted.

Furthermore, we may be unable to attract and retain additional qualified senior management and other key personnel as needed in the future.

Delta Air Lines, Inc.

| 2022 10-K 22

Risk Factors Relating to the Airline Industry

Disease outbreaks, such as the COVID-19 pandemic or similar public health threats that may arise in the future, and measures implemented to combat them have had, and may in the future have, a material adverse effect on our business.

The COVID-19 pandemic, the measures governments and private parties implemented in order to stem its spread, and the general concern about the virus among travelers had a material adverse effect on the demand for worldwide air travel compared to historical levels, and consequently upon our business.

Similar disease outbreaks or public health threats that may arise in the future could have similarly adverse effects on our business.

Among other effects of the COVID-19 pandemic that affected air travel and our business, the pandemic led governments both in the United States and abroad to issue travel restriction or advisories, and to implement quarantines and health-related curfews or "shelter in place" orders;

led employers to instruct employees to work from home and/or otherwise dissuaded or restricted air travel;

caused business conventions, conferences, concerts, sporting events and similar events to be canceled or held with limited or no attendees;

and discouraged travelers from air travel to destinations where COVID-19 was particularly virulent or due to possible enhanced COVID-19 related screening measures.

These pandemic-related effects negatively impacted air travel in general, which in turn materially adversely affected our revenues, results of operations and financial condition for an extended period of time.

Our operations have been, and could in the future be, negatively affected further if our employees are quarantined or sickened as a result of exposure to a disease outbreak such as COVID-19, or as a result of a similar public health crisis, or if they are subject to additional governmental curfews or " shelter in place " health orders or similar restrictions.

Measures restricting the ability of our airport or in-flight employees to come to work negatively impact our service or operations, all of which could negatively affect our business.

We are unable to predict the extent to which disease outbreaks or other public health threats that may arise in the future may change our customers' behavior or travel patterns, which could have a material impact on our business.

The degree to which any future disease outbreaks or public health threats may impact our revenues, results of operations and financial condition is uncertain and will depend on future developments.

Terrorist attacks, geopolitical conflict or security events may adversely affect our business, financial condition and results of operations.

Terrorist attacks, geopolitical conflict or security events, or the fear or threat 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 rely on government provided threat intelligence and utilize private sources to constantly monitor for 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 the fear or threat of any of these events, even if not made directly on or involving the airline industry, could have a 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 or could occur, such as flight redirections or cancellations, 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.

Delta Air Lines, Inc.

| 2022 10-K 23

The global airline industry is highly competitive and, if we cannot successfully compete in the marketplace, our business, financial condition and results of operations will be materially adversely affected.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), operational reliability, services, products, customer service and loyalty programs.

Consolidation in the airline industry, changes in international alliances, the creation of immunized joint ventures and the rise of subsidized government-sponsored international carriers 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 domestic operations are subject to significant 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, Allegiant Air, Breeze Airways and Avelo Airlines, some of which may have lower costs than we do and provide service at low fares to destinations served by Delta.

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.

We also face competition in small- to medium-sized markets from regional jet operations of other carriers.

Our ability to compete in the domestic market effectively depends, in part, on our ability to maintain a competitive cost structure.

If we cannot maintain our costs at a competitive level, then our business, financial condition and results of operations could be materially adversely affected.

Our international operations are subject to competition from both foreign and domestic carriers, including from point-to-point carriers on certain international routes.

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, Asian and Latin American 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, several joint ventures among U.S.

and foreign carriers, including several of our joint ventures as well as those of our competitors, have received grants of antitrust immunity allowing the participating carriers to coordinate networks, schedules, pricing, sales and inventory.

In addition, 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.

The airline industry also faces competition from surface transportation and technological alternatives such as virtual meetings, teleconferencing or videoconferencing, and the intensity of this competition has likely increased, at least in the near term, as a result of the COVID-19 pandemic.

Increased competition in both the domestic and international markets may have a material adverse effect on our business, financial condition and results of operations.

Extended interruptions or disruptions in service at major airports in which we operate or significant problems associated with a type of aircraft or engine we operate could have a material adverse effect on our financial condition and results of operations.

The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world.

An interruption or disruption at an airport where we have significant operations, whether resulting from air traffic control delays, failure of computer systems or technology infrastructure, weather events or natural disasters, or performance issues from third-party service providers, if sustained for an extended period of time, 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.

Any significant problems associated with an aircraft or engine type that we operate, including new aircraft or engine types, such as design defects, mechanical problems, contractual performance by the manufacturers or adverse perception by the public leading to customer avoidance, or adverse actions by the FAA resulting in limitations on use or grounding could have a negative impact on our operations if we are not able to substitute or replace the affected aircraft or engine type.

Any of the foregoing could have a material adverse effect on our financial condition and results of operations.

Delta Air Lines, Inc.

| 2022 10-K 24

The airline industry is subject to extensive government regulation, which is costly and could materially adversely affect our business.

Airlines are subject to extensive regulatory and legal compliance requirements that result in significant costs and may have material adverse effects on our business.

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 and could carry operational implications.

We expect to continue incurring significant expenses to comply with the FAA’s regulations.

In addition, a directive or other regulation that has a significant operational impact on us could have a material adverse impact on our financial results.

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, reduce revenues or otherwise impact our business.

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 or otherwise adversely affect an airline’s business.

Certain of our hubs are among the most congested airports in the United States and have been, and could in the future be, the subject of regulatory action that might limit the number of flights and/or increase costs of operations at certain times or throughout the day.

Air traffic control inefficiencies can also enhance these pressures.

In addition, inefficiencies in the U.S.

air traffic control system, which is regulated by the FAA, can result in delays and disruptions of air traffic, especially during peak travel periods in certain congested markets.

Failure to implement measures 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 and import requirements, taxes, monetary policies and other restrictions and charges.

In particular, the imposition of significant tariffs with respect to aircraft that we are not able to mitigate could substantially increase our costs, 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 and restrictions, the Foreign Corrupt Practices Act (the "FCPA") and similar anti-bribery laws in non-U.S.

jurisdictions, as well as 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.

In certain circumstances, we also may be subject to consequences of the failure of our airline partners to comply with laws and regulations, including U.S.

laws to which they may be subject such as the FCPA.

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 and which are continuously evolving, requiring ongoing monitoring and updates to our privacy and information security programs.

Although we dedicate significant resources to manage compliance with global privacy and information security obligations, this challenging regulatory environment may pose material risks to our business, including increased operational burdens and costs, regulatory enforcement, and legal claims or proceedings.

If Monroe's cost of producing non-jet fuel products significantly exceeds the value it receives for those products, the financial benefits we expect to achieve through the ownership of the refinery and our consolidated results of operations could be materially adversely affected.

Our commercial relationships with airlines in other parts of the world and the investments that we have in certain of those carriers may not produce the results or returns we expect.

These relationships and investments involve significant challenges and risks, including that joint ventures or cooperation agreements may be subject to ongoing review and renewal requirements and may not generate the expected financial results, or that we may not realize a satisfactory return on our investments.

For example, the DOT's approval of and antitrust immunity grant for our joint cooperation agreement with Aeroméxico is subject to a pending renewal application with the DOT, which was tentatively dismissed pursuant to an Order to Show Cause issued by the DOT on January 26, 2024.

The existing immunity remains in effect pending final adjudication of the renewal application, the timing and outcome of which cannot be predicted at this time.

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.

If our commercial arrangements with any of these partners are not maintained, any investments or other assets associated with those partners could become impaired, and our business and results of operations could be materially adversely affected.

While we have agreements with certain of these third parties that define expected service performance, we do not have direct control over their operations.

Some regional carriers, including our wholly owned subsidiary, Endeavor, are facing a shortage of qualified pilots and experiencing operating constraints as a result.

Delta Air Lines, Inc.

| 2022 10-K 25

| 2023 Form 10-K 19

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business