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CORRESP
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filename1.htm

      Response to SEC Comments

      [Delta
        Letterhead]

      December
        7, 2005

      Mr.
        Joseph A. Foti

      Senior
        Assistant Chief Accountant

      Division
        of Corporation Finance

      U.
        S.
        Securities and Exchange Commission

      100
        F
        Street, N.E.

      Mail
        Stop
        3561

      Washington,
        D.C. 20549

              Re:

                Delta
                  Air Lines, Inc.

                Annual
                  Report on Form 10-K for the year ended December 31, 2004

                File
                  No. 1-5424

      Dear
        Mr.
        Foti:

      This
        is
        in response to the Staff’s letter dated November 22, 2005 regarding Delta’s
        Annual Report on Form 10-K for the year ended December 31, 2004. For your
        convenience, we have included in this letter each of the Staff’s comments before
        providing our response to that comment.

      **********

      Comment
        No. 1

      Contractual
        Obligations, page 40

      Pension
        Funding, page 41

      We
        believe you should consider significantly expanding the disclosure to discuss
        any reasonably expected changes in the pension systems that may materially
        impact the company’s liquidity or results of operations. Among other matters,
        you should consider legislative measures that may require employers to: (i)
        pay
        higher premiums per participant per year to the government’s pension insurance
        agency (i.e. PBGC); (ii) strengthen the amount to fund their traditional
        plans
        to lessen the potential liability assumed by the PBGC for failed companies;
        and
        (iii) change the formula for which pension liabilities are calculated. Your
        discussion should include the estimated range of known impact if there is
        enactment for each of these legislative changes.

      Response:

      In
        connection with our disclosure in Form 10-K, we have considered in the past,
        and
        will continue to consider in the future, proposed legislative changes to
        the
        pension system. If particular legislation is reasonably expected to be enacted
        and its effects on our liquidity or results of operations are expected to
        be
        material and can be reasonably estimated, we will provide the estimated range
        of
        impact.

      Please
        note that there are material differences among the pension related bills
        that
        have been introduced in Congress, particularly as they relate to the airline
        industry. We cannot currently predict which, if any, of these bills will
        be
        enacted. We will continue to monitor legislative developments in the pension
        area and to consider what disclosure is appropriate in light of these
        developments.

      Comment
        No. 2

      Critical
        Accounting Estimates, page 43

      Pension
        Plans, page 44

      Disclosures
        in note 12 highlight the highly material impact that the additional minimum
        pension liability adjustment had on Other Comprehensive Income and Stockholders’
Equity during the three-year financial statement period. In view of the (i)
        material deficiency in funded status in your defined pension plan; (ii) the
        amount of minimum pension liability recognized in the three-year financial
        period; and (iii) assumptions and estimates on this retirement obligation
        period
        representing a critical accounting policy, we believe you should expand the
        MD&A to also disclose the individual impact on the funded status (i.e. fair
        market value of pension assets - present value of pension liabilities (PBO))
        of
        pension plan and shareholders’ equity adjustment (i.e. additional minimum
        pension liability) for the hypothetical basis changes in each of the estimates
        (i.e. weighted average discount rate, rate of future compensation levels
        and
        expected long-term rate of return) as well the aggregate impact on these
        two
        items for changes on all of the estimates. We also suggest that you set forth
        the above data as well as the pension expense impact data currently being
        disclosed in tabular format for ease of analysis and understanding by
        investors.

      Furthermore,
        from the disclosure in note 10, page F-42; we note the following percentage
        changes that occurred in your estimates of the three assumptions during the
        financial statement period:

              ·

                a
                  1
                  ¾% change in weighted average discount
                  rate;

              ·

                a
                  3% change in expected rate of increase in future compensation levels;
                  and

              ·

                a
                  1% change in expected long-term rate of return on
                  assets.

      Therefore,
        it appears disclosures on the impact (i.e. sensitivity analysis) based on
        1%
        changes in these estimates, rather than the ½% currently being disclosed, would
        be more relevant and reasonable under your circumstances.

      Please
        revise accordingly.

          2

      Response:

      Based
        on
        the Staff’s comment, we will disclose in tabular format in future filings the
        impact of hypothetical changes in the assumptions noted above (i.e., weighted
        average discount rate; rate of future compensation levels; and expected
        long-term rate of return) on the funded status, the additional minimum pension
        liability and pension expense under our defined benefit pension plans.
        Additionally, in our sensitivity analysis, we will correlate these assumptions
        to changes in historical and expected future trends.

      Comment
        No. 3

      Consolidated
        Balance Sheets, page F-3

      Reference
        is made to “Other Noncurrent Assets” that approximated $1.2 billion at December
        31, 2004. We suggest you provide expanded disclosure in a note that describes
        the nature of the significant items in this caption, including an accounting
        policy thereto. With respect to any significant deferred charges, state the
        policy for deferral and amortization.

      Response:

      At
        December 31, 2004, there were no Other Noncurrent Assets that individually
        exceeded the five percent test as defined in Rule 5-02 of Regulation S-X.
        For
        your information, Other Noncurrent Assets at December 31, 2004 were comprised
        of
        the following:

                   December
                    31,

                  (in
                    millions)

                  2004

                  Funded
                    post-employment benefits in excess of liability

                  $

                  346

                  Long-term
                    pre-payments (primarily rent)

                  231

                  Intangible
                    assets related to unrecognized prior service costs

                  168

                  Debt
                    issuance costs

                  146

                  Other

                  315

                  $

                  1,206

      Please
        note that we discuss certain of these assets and related accounting policies
        in
        the Form 10-K. For example, accounting for intangible assets related to
        unrecognized prior service costs and funded post-employment benefits in excess
        of liability are described in Note 10 to the Consolidated Financial Statements
        on pages F-41 and F-45, respectively, of the Form 10-K.

      We
        will
        continue to analyze our Other Noncurrent Assets and supplement disclosures
        in
        future filings in accordance with Rule 5-02 of Regulation S-X.

          3

      Comment
        No. 4

      Note
        1. Summary of Significant Accounting Policies, page F-8

      Goodwill
        & Intangible Assets F-15

      In
        evaluating impairment for goodwill, you disclose that you consider projected
        future cash flows while the impairment test for other indefinite-lived assets
        is
        based on projected “discounted” future cash flows. It appears that your
        treatment is not consistent in applying the similar fair value based impairment
        tests required for indefinite (non-amortizable) lived intangible assets and
        goodwill. Refer to the guidance in footnote 12, paragraphs 23-25 and paragraphs
        88-89 of SFAS No. 142. Please advise and revise as appropriate.

      Response:

      Our
        evaluations of the impairment of goodwill and other indefinite-lived intangible
        assets are consistent as both are based on discounted cash flows. As more
        completely described in Critical
        Accounting Estimates -
        Goodwill,
        on page
        43 of our Form 10-K, we primarily consider projected future cash flows to
        derive
        reporting unit fair value. We further disclosed that in applying this
        methodology we (1) make assumptions about each reporting unit’s future cash
        flows based on capacity, passenger yield, traffic, operating costs and other
        relevant factors and (2) discount those cash flows based on each reporting
        unit’s weighted average cost of capital. We will modify the disclosure in Note
        1
        to our Consolidated Financial Statements in our Annual Report on Form 10-K
        for
        the fiscal year ending December 31, 2005 to clarify that the methodology
        used is based on discounted cash flows. As noted above and described in our
        Form
        10-K, this approach is consistent with the approach used to evaluate other
        indefinite-lived intangible assets for impairment.

      Comment
        No. 5

      Stock-Based
        Compensation, pages F-17

      During
        the financial statement period, we note that your assumptions of expected
        volatility on common stock significantly changed from approximately 40% to
        70%
        while your average expected life of stock options changed from approximately
        7
        years to 3 years. You also disclose that SFAS No. 123(R) may have a material
        impact upon its adoption. On average, one would generally expect that employees
        may tend to exercise options on highly volatile stock earlier than on stocks
        with lower volatility. However, it is unclear of the factors or conditions
        you
        considered in estimating the highly significant 4 year change in expected
        life
        of your stock options as a result of an approximate 30% change in expected
        volatility. In this regard, in view of the significant financial difficulties
        experienced by the company including your recent bankruptcy filing, it would
        appear that an increase in volatility of the stock may not result in such
        a
        significant reduction in the expected life of the option. Also, as your stock
        options become exercisable one to five years after the grant date (see note
        11
        page F-45), please tell us whether the three-year

          4

      average
        expected life is based on the “average” of the earliest period in which your
        stock options can be exercisable. In addition, as the approximate 4-year
        reduction in the average expected life was recognized in fiscal 2003, please
        advise whether you have experienced any significant difference in exercise
        on
        the options that had shorter (i.e. one to two year) exercise periods. Please
        re-evaluate these assumptions and address in complete and clear detail your
        consideration of the above matters in estimating the significant downward
        change
        recognized in the average expected life of stock options in computing the
        fair
        value of such options.

      Response:

      As
        requested by the Staff, we have re-evaluated the average expected life
        assumption used to estimate the fair value of stock options granted during
        2004
        and 2003, as compared to 2002. There were four primary factors contributing
        to
        the decrease in this assumption. As discussed below, these factors are (1)
        the
        historical volatility of our common stock; (2) announced business plans
        generally coinciding with stock option grants to employees; (3) a significant
        decrease in the contractual life of options granted in 2004 and 2003, as
        compared to 2002; and (4) a material expansion of the employee population
        receiving option grants in 2004 and 2003, as compared to 2002.

      As
        noted
        by the Staff, on average, one would generally expect that employees may tend
        to
        exercise options on highly volatile stock earlier than on stocks with lower
        volatility. The Staff also noted, in view of the significant financial
        difficulties experienced by us, it would appear that an increase in volatility
        of our stock may not result in such a significant reduction in the expected
        life
        of our options. Our stock option grants made during 2003 and 2004 generally
        coincided with announced business plans that were initiated to significantly
        reduce our costs, increase our revenues and strengthen our competitive position,
        as described in our Form 10-K. As a result, while volatility of our common
        stock
        price was a consideration in the reduction of our average expected life
        assumption, consideration of our historical financial difficulties was offset
        by
        the then-recently announced business plans intended to position us for financial
        improvement.

      Stock
        options granted in 2002 had a contractual life of 10 years from the grant
        date.
        In May 2003, with shareowner approval, we commenced a stock option exchange
        program (“Stock Option Exchange Program”) whereby eligible employees in our 1996
        broad-based employee stock option plans and our management stock option plan
        could elect to exchange their outstanding options issued in 1995 through
        2002
        that had an exercise price greater than $25 per share for a designated fewer
        number of replacement options with an exercise price equal to the fair market
        value of the common stock on the grant date of the replacement options. Under
        this program, approximately 32 million outstanding stock options were canceled
        on June 25, 2003, and approximately 12 million replacement options were issued
        on December 26, 2003. The contractual life of the replacement options ranged
        from one to nine years from the grant date of the replacement options, with
        a
        weighted average life of approximately six years. In November 2004, we granted
        stock options to purchase 71 million shares of our common stock to approximately
        60,000 employees, including 62 million options granted under our 2004
        broad-based employee stock option plans; these stock options expire six years
        after their grant date. The decrease in the contractual life of options issued
        in 2003 and 2004, as compared to 2002, contributed to the decline in
        our average expected life assumption.

          5

      Lastly,
        the employee population receiving option grants in 2003 (under