Risk Factors Relating to the Airline Industry
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.
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 and Allegiant Air, 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 smaller 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 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, 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 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.
Item 1A. Risk Factors
Delta Air Lines, Inc. 2021 Form 10-K 25