Memo To Doug Parker: "Thanks, but No Thanks!"

December 19, 2006
VIA FASCIMILE: 480 693 5261
Mr. W. Douglas Parker
Chairman and CEO
US Airways
4000 E. Sky Harbor Blvd.
Phoenix, AZ 85034

Dear Mr. Parker:
The Board of Directors of Delta Air Lines has unanimously rejected US Airways’ merger proposal. The Board concluded that our creditors, as well as the company’s other stakeholders, are best served by moving forward with our standalone Plan of Reorganization. Our Board of Directors considered many compelling factors during its thorough review of the US Airways proposal, and determined that our standalone Plan of Reorganization filed today will provide superior value as well as faster recovery and greater certainty of execution. Further, we concluded that your proposal is structurally flawed. It represents an unacceptably high risk of not achieving antitrust clearance because it would harm consumers and communities due to its substantial anticompetitive effects. It has overwhelming labor issues precluding attainment of claimed synergies, and depends on achieving “synergies” that are premised on faulty economic assumptions. In addition, the proposal would saddle the company with a precariously high total debt load, and reverse Delta’s progress, eroding the value of the Delta brand. Finally, US Airways continues to experience significant integration problems and has not successfully completed its prior, smaller merger with America West; it is not equipped to simultaneously integrate a substantially larger company.

The Board of Directors believes that the antitrust issues inherent in your proposal are grave, based on Department of Justice (“DOJ”) standards. Moreover, a DOJ review process would be prolonged, thus unacceptably extending the period Delta would be forced to remain in bankruptcy. In addition, the Delta unit of the Air Line Pilots Association has said – and Delta agrees – that our pilot contract would prohibit the combined company from implementing the capacity reductions that are the economic foundation of the proposed transaction.

Mr. W. Douglas Parker US Airways
December 19, 2006
Page 2

We believe that the proposal would have a demonstrably negative impact on the actual value delivered to our creditors. Your proposal radically overestimates synergies and erroneously states there is an urgent need to complete a transaction while Delta is still in bankruptcy. At the same time, it downplays the impact on employees and the traveling public, all of whom would suffer from less service and resulting higher prices to many destinations. Our vision for a fundamentally different airline that provides superior value and quality is working, as our significant progress during the year makes clear. These accomplishments – along with the strength of our brand and the resolve of our people – are the strong foundation we’re using to build further success and position Delta for intense domestic and international competition.
As part of its review, the Board concluded that Delta is better served by continuing to focus on its plan to pursue new international market and revenue opportunities from the solid base of our right-sized domestic network, a best-in-class network cost structure, and high levels of customer service. Your proposal, on the other hand, would drain or dilute both the value and quality our company has worked hard to create, including superior service levels.
For all these reasons, Delta’s Board and management have rejected the US Airways proposal.

Sincerely,
Original signed by:
Gerald Grinstein, CEO
Delta Air Lines, Inc.