SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended June 30, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Commission file number 1-5424

DELTA AIR LINES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 58-0218548
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
- ---------------------------------------- ------------
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (404) 715-2600
--------------

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
- ------------------------------------------------- ------------------------

Common Stock, par value $3.00 per share New York Stock Exchange

Preferred Stock Purchase Rights New York Stock Exchange

Depositary Shares, each representing 1/1,000 of New York Stock Exchange
a share of Series C Convertible Preferred Stock

Securities registered pursuant to Section 12(g) of the Act:

Series C Convertible Preferred Stock, par value $1.00 per share, liquidation
preference $50,000 per share
----------------------------------------------------------------------------
(Title of class)
2

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of August 31, 1995, was approximately $4,281,249,000. As of
August 31, 1995, 51,144,098 shares of the registrant's common stock were
outstanding.

Documents Incorporated By Reference

Parts I and II of this Form 10-K incorporate by reference certain
information from the registrant's 1995 Annual Report to Stockholders. Part III
of this Form 10-K incorporates by reference certain information from the
registrant's definitive Proxy Statement dated September 15, 1995, for its
Annual Meeting of Stockholders to be held on October 26, 1995.
3
DELTA AIR LINES, INC.

PART I

ITEM 1. BUSINESS

General Description

Delta Air Lines, Inc. ("Delta" or the "Company") is a major air carrier
providing scheduled air transportation for passengers, freight and mail over a
network of routes throughout the United States and abroad. Based on calendar
1994 data, Delta is the largest United States airline as measured by aircraft
departures and passengers enplaned, and the third largest United States airline
as measured by operating revenues and revenue passenger miles flown. At
September 1, 1995, the Company served 153 domestic cities in 43 states, the
District of Columbia, Puerto Rico and the United States Virgin Islands, as well
as 51 cities in 31 foreign countries.

An important characteristic of Delta's domestic route system is its four
hub airports in Atlanta, Cincinnati, Dallas/Ft. Worth and Salt Lake City. Each
of these hub operations includes Delta flights that gather and distribute
traffic from markets in the geographic region surrounding the hub to other
major cities and to other Delta hubs. These hubs also provide access to
Delta's international hub at New York's Kennedy Airport, its Pacific gateway in
Portland, Oregon and its European hub in Frankfurt, Germany.

Delta conducts operations in various foreign countries, principally in
North America, Europe, the Middle East and Asia. Operating revenues from the
Company's foreign operations were approximately $2.6 billion, $2.5 billion and
$2.3 billion in the years ended June 30, 1995, 1994 and 1993, respectively.

For the year ended June 30, 1995, passenger revenues accounted for 92%
of Delta's operating revenues. Cargo revenues, which include freight and mail,
accounted for 5% of Delta's operating revenues, and other sources accounted for
3% of the Company's operating revenues.

Delta's operating results for any interim period are not necessarily
indicative of operating results for an entire year because of seasonal
variations in the demand for air travel. In general, demand for air travel is
higher in the June and September quarters, particularly in international
markets, because there is more vacation travel during these periods than during
the remainder of the year. Demand for air travel, especially by leisure and
other discretionary customers, is also affected by factors such as general
economic conditions and fare levels.

Delta is incorporated under the laws of the State of Delaware. Its
principal executive offices are located at Hartsfield Atlanta International
Airport, Atlanta, Georgia 30320, and its telephone number is (404) 715-2600.

Regulatory Environment

While the United States Department of Transportation (the "DOT") and the
Federal Aviation Administration (the "FAA") exercise regulatory authority over
air carriers under the
4

Federal Aviation Act of 1958, as amended (the "Act"), most domestic economic
regulation of passenger and freight services was eliminated pursuant to the
Airline Deregulation Act of 1978 and other statutes amending the Act. The DOT
has jurisdiction over international tariffs and pricing; international routes;
and certain economic and consumer protection matters such as advertising,
denied boarding compensation, baggage liability, smoking aboard aircraft and
computer reservations systems. The FAA regulates flying operations generally,
including control of navigable air space, flight personnel, aircraft
certification and maintenance, and other matters affecting air safety. The
United States Department of Justice has jurisdiction over airline mergers and
acquisitions.

Because of the economic deregulation of the industry, unrestricted
authority to operate domestic air transportation (including the carriage of
passengers and cargo) is available to any air carrier which the DOT finds "fit"
to operate. Authority to operate international routes continues to be
regulated by the DOT and by the foreign governments involved. International
route awards are also subject to the approval of the President of the United
States for conformance with national defense and foreign policy objectives.

The economic deregulation of the industry permits unfettered competition
with respect to domestic routes, services, fares and rates, and competition on
Delta's routes continues to increase. Except for constraints imposed by the
Act's Essential Air Service provisions which are applicable to certain small
communities, airlines may terminate service to a city without restriction.

The FAA has implemented a number of provisions and requirements which
are being incorporated into Delta's maintenance programs. These matters relate
to, among other things, inspection and maintenance of aging aircraft, and
corrosion control. Based on its current implementation schedule, Delta expects
to be in compliance with applicable requirements within the required time
periods.

Delta is also subject to various other federal, state, local and foreign
laws and regulations. The United States Postal Service has authority over
certain aspects of the transportation of mail, and rates for the carriage of
domestic mail are determined through negotiations or competitive bidding. The
Communications Act of 1934, as amended, governs Delta's use and operation of
radio facilities. Labor relations in the airline industry are generally
governed by the Railway Labor Act. Environmental matters (including noise
pollution) are regulated by various federal, state and local governmental
entities.

Fares and Rates

Airlines are permitted to set domestic ticket prices without
governmental regulation, and the industry is characterized by substantial price
competition. With respect to foreign air transportation, the DOT retains
authority over fares, rates and charges, and air carriers are required to file
and observe tariffs covering such transportation. International fares and
rates are also subject to the jurisdiction of the governments of the foreign
countries involved. While air carriers are required to file and adhere to
international fare and rate tariffs, many international

- 2 -
5

markets are characterized by substantial commissions, overrides and discounts
to travel agents, brokers and wholesalers.

During fiscal 1995, low-cost, low-fare carriers increased their presence
in domestic markets served by Delta. This contributed to a 1% decline in the
system passenger mile yield in fiscal 1995 compared to fiscal 1994. See "ITEM
1. Business - Leadership 7.5" on pages 6-7.

Delta expects that low-fare competition is likely to continue in
domestic and international markets. If price reductions are not offset by
increases in traffic or changes in the mix of traffic that improve the
passenger mile yield, Delta's operating results will be adversely affected.

Competition and Route Authority

All domestic routes served by Delta are subject to competition from both
new and existing carriers, and service over virtually all of Delta's domestic
routes is highly competitive. On most of its principal routes, the Company
competes with at least one, and usually more than one, major airline. Delta
also competes with regional and national carriers, all-cargo carriers, charter
airlines and, particularly on its shorter routes, with surface transportation.
Service over most of Delta's international routes is also highly competitive.

International alliances between foreign and domestic carriers, such as
the marketing and code sharing arrangements between British Airways Plc and
USAir, Inc., KLM-Royal Dutch Airlines and Northwest Airlines, Inc., and
Lufthansa German Airlines and United Air Lines, Inc., have significantly
increased competition in international markets. Through code sharing
arrangements with United States carriers, British Airways, KLM and Lufthansa
have obtained access to interior United States passenger traffic. Similarly,
Northwest and United have increased their ability to sell transatlantic
services and destinations to and beyond European cities served by KLM and
Lufthansa.

Delta's flight operations are authorized by certificates of public
convenience and necessity and, to a limited extent, by exemptions issued by the
DOT. The requisite approvals of other governments for international operations
are provided by bilateral agreements with, or permits issued by, foreign
countries. Because international air transportation is governed by bilateral
or other agreements between the United States and the foreign country or
countries involved, changes in United States or foreign government aviation
policies could result in the alteration or termination of such agreements,
diminish the value of Delta's international route authorities or otherwise
affect Delta's international operations. Bilateral agreements between the
United States and various foreign countries served by Delta are subject to
renegotiation from time to time.

Certain of Delta's international route authorities are subject to
periodic renewal requirements. Delta requests extension of these authorities
when and as appropriate. While the DOT usually renews temporary authorities on
routes where the authorized carrier is providing a reasonable level of service,
there is no assurance of this result. Dormant authority may not be renewed in
some cases -- especially where another United States carrier indicates a
willingness to provide service.

- 3 -
6

Code Sharing

Delta has entered into marketing agreements with certain foreign
carriers to maintain or improve Delta's access to international markets. Under
these dual designator code sharing arrangements, Delta and the foreign carrier
publish their respective airline designator codes on a single flight operation,
thereby allowing Delta and the foreign carrier to provide joint service with
one aircraft rather than operating separate services with two aircraft.

Most of Delta's international code sharing arrangements operate in
discrete international city pairs. Delta purchases seats that are marketed
under Delta's "DL" designator code pursuant to code sharing arrangements with a
number of foreign airlines, including Aeromexico, Austrian Airlines, Korean Air
(effective September 30, 1995), Malev Hungarian Airlines, Sabena Belgian World
Airlines, Singapore Airlines, Swissair, Varig and Virgin Atlantic Airways.
Delta sells seats that are marketed under foreign airlines' two-letter
designator codes pursuant to code sharing arrangements with Aeroflot,
Aeromexico, Sabena and Swissair.

Slot Allocations

Operations at four major United States and certain foreign airports
served by Delta are regulated by governmental entities through "slot"
allocations. Each slot represents the authorization to land or take off from
the particular airport during a specified time period. In the United States,
the FAA regulates slot allocations at Kennedy Airport in New York, LaGuardia
Airport in New York, National Airport in Washington, D. C., and O'Hare
International Airport in Chicago. The Delta Shuttle requires slot allocations
at LaGuardia and National Airports, as do Delta's other operations at those
four airports. Certain foreign airports, including Delta's European hub in
Frankfurt, also have slot allocations.

Delta currently has sufficient slot authorizations to operate its
existing flights, and has generally been able to obtain slots to expand its
operations and to change its schedules. There is no assurance, however, that
Delta will be able to obtain slots for these purposes in the future because,
among other reasons, slot allocations are subject to changes in governmental
policies.

The Delta Connection

Delta has marketing agreements with four air carriers serving
principally the following areas of the United States: Atlantic Southeast
Airlines, Inc. ("ASA") operates in the Southeast through Atlanta and in the
Southwest through Dallas/Fort Worth; Business Express, Inc. serves the
Northeast; Comair, Inc. ("Comair") serves Florida and operates in the Midwest
through Cincinnati; and SkyWest Airlines, Inc. ("SkyWest") serves California
and operates in other western states through Salt Lake City. These carriers,
which are known as "Delta Connection" airlines, use Delta's "DL" code on their
flights and exchange connecting traffic with Delta. At June 30, 1995, Delta
held equity interests in ASA, Comair Holdings, Inc. (the parent of Comair) and
SkyWest, Inc. (the parent of SkyWest) of 24%, 21% and 15%, respectively.

- 4 -
7

Computer Reservation System Partnership

Delta owns 38% of WORLDSPAN, L.P. ("WORLDSPAN"), a Delaware limited
partnership which operates and markets a computer reservation system ("CRS")
and related systems for the travel industry. Northwest Airlines, Inc., Trans
World Airlines, Inc. and ABACUS Distribution Systems Pte Ltd. own 32%, 25% and
5%, respectively, of WORLDSPAN.

CRS services are used primarily by travel agents to book airline, hotel
and car rental reservations and issue airline tickets. CRS services are
provided by several companies in the United States and worldwide. In the
United States, other CRS competitors are SABRE (owned by American Airlines,
Inc.), the Galileo International Partnership (owned by United Air Lines, Inc.,
USAir, Inc. and certain foreign carriers) and System One AMADEUS (owned by
Continental Airlines, Inc., AMADEUS and Electronic Data Systems Corporation).
CRS vendors are subject to regulations promulgated by the DOT and certain
foreign governments.

The CRS industry is highly competitive. Delta believes that, based on
the number of travel agents in the United States using a CRS, WORLDSPAN ranks
third, behind SABRE and the Galileo International Partnership, in market share
among travel agents in the United States.

Information Technology Joint Venture

During the December 1994 quarter, Delta and AT&T Global Information
Solutions Company ("AT&T") formed TransQuest Information Solutions
("TransQuest"), a joint venture to provide information technology services to
Delta and others in the travel and transportation industries. Delta and AT&T
each own a 50% interest in TransQuest.

Fuel

Delta's operations are significantly affected by the availability and
price of jet fuel. Based on the Company's fiscal 1995 jet fuel consumption, a
one-cent change in the average annual price per gallon of jet fuel would have
caused an approximately $25 million change in Delta's annual fuel costs. The
following table shows Delta's jet fuel consumption and costs for fiscal years
1991-1995.

Gallons Percent of
Fiscal Consumed Cost Average Price Operating
Year (Millions) (Millions) Per Gallon Expenses*
------ ---------- ---------- ------------- ----------

1991 2,060 $1,599 77.63c. 17%
1992 2,384 1,482 62.19 13
1993 2,529 1,592 62.95 13
1994 2,550 1,411 55.34 12
1995 2,533 1,370 54.09 12
- -------------

* Excluding restructuring charges

- 5 -
8

Aircraft fuel expense decreased 3% in fiscal 1995 compared to fiscal
1994, as fuel gallons consumed declined 1% and the average price per fuel
gallon decreased 2% to 54.09c., Delta's lowest average price per fuel gallon
for any fiscal year since fiscal 1989.

Changes in jet fuel prices have industry-wide impact and benefit or harm
Delta's competitors as well as Delta. Accordingly, lower jet fuel prices may
be offset by increased price competition and lower revenues for all air
carriers. Moreover, there can be no assurance that Delta will be able to
increase its fares in response to any future increases in fuel prices.

Delta's jet fuel contracts do not provide material protection against
price increases or for assured availability of supplies. The Company purchases
most of its jet fuel from petroleum refiners under contracts which establish
the price based on various market indices. The Company also purchases aircraft
fuel on the spot market, from off-shore sources and under contracts which
permit the refiners to set the price and give the Company the right to
terminate upon short notice if the price is unacceptable.

Although Delta is currently able to obtain adequate supplies of jet
fuel, it is impossible to predict the future availability or price of jet fuel.
Political disruptions in the oil producing countries, changes in government
policy concerning aircraft fuel production, transportation or marketing,
changes in aircraft fuel production capacity, environmental concerns, and other
unpredictable events may result in fuel supply shortages and fuel price
increases in the future. Such shortages and price increases could have a
material adverse effect on Delta's business.

The Omnibus Budget Reconciliation Act of 1993 imposes a 4.3c. per gallon
tax on commercial aviation jet fuel purchased for use in domestic operations,
effective October 1, 1995. Based on Delta's fiscal 1996 expected domestic fuel
requirement of 1.9 billion gallons, the new fuel tax, when effective, is
expected to increase Delta's operating expenses by approximately $80 million
annually. Delta and other United States airlines are actively lobbying for a
repeal of this tax. The outcome of these efforts cannot presently be
determined.

Leadership 7.5

On April 28, 1994, Delta announced "Leadership 7.5," a three-year plan
with the goal of reducing the Company's annual operating expenses by
approximately $2 billion by the end of the June 1997 quarter. Delta also
established operating cost per available seat mile ("unit cost") goals of 8.6c.
by the June 1995 quarter, 8.0c. by the June 1996 quarter and 7.5c. by the June
1997 quarter. These unit cost goals reflect the phase-in of the approximately
$2 billion in targeted cost savings, exclude restructuring and other
nonrecurring charges, and assume other costs and operating capacity remain at
calendar 1993 levels. To the extent that other costs increase, Delta will seek
additional cost reductions to achieve its goals.

Industry events during fiscal 1995 validated Delta's determination that
cost reductions are essential to compete in today's highly competitive airline
industry. Low-cost, low-fare carriers increased their presence in domestic
markets, resulting in continued reductions in Delta's domestic passenger mile
yield and flat or declining domestic unit revenue. At the end of fiscal

- 6 -
9

1995, approximately 60% of Delta's domestic origin and destination revenue
passenger miles were in markets also served by low-cost, low-fare carriers, up
from 57% at the end of fiscal 1994 and 32% at the end of fiscal 1993. The
airline industry has experienced a permanent shift in the preferences of its
customers, with more business and leisure passengers citing ticket prices as
the most important factor in their purchase decisions.

Leadership 7.5 initiatives made a significant contribution to Delta's
operating profit in fiscal 1995. The Company achieved its first Leadership 7.5
unit cost target, recording a unit cost of 8.39c. for the June 1995 quarter.
By the end of fiscal 1995, the implementation of initiatives expected to
generate approximately $1.6 billion in annual cost reductions was in process or
completed.

Changes in the Company's collective bargaining agreement with the Air
Line Pilots Association ("ALPA"), which represents Delta's 8,100 pilots, are
critical to the continued success of Leadership 7.5 and the Company's ability
to achieve its future unit cost targets. Delta is seeking $340 million in
annual productivity improvements and wage and benefit reductions from ALPA.
See "ITEM 1. Business - Personnel" on pages 7-8.

Delta's cost reduction and unit cost goals under Leadership 7.5 are
aggressive, and no assurance can be given that Delta will achieve these goals.

Additional information regarding Leadership 7.5 is set forth under
"Operational Review - Leadership 7.5" on page 6 of Delta's 1995 Annual Report
to Stockholders, and is incorporated herein by reference.

Personnel

At June 30, 1995, Delta employed 59,717 full-time equivalent personnel,
compared to 69,555 full-time equivalent personnel at June 30, 1994. This 14%
reduction in staffing was achieved through voluntary early retirement
incentives, leaves of absence, severance programs, the transfer of employees to
TransQuest and WORLDSPAN, and furloughs.

The following table presents certain information concerning Delta's
domestic collective bargaining agreements.

Approximate
Number of Contract
Personnel Amendable
Personnel Group Represented Union Date
---------------- ----------- -------------------- --------------

Pilots 8,100 Air Line Pilots 1/1/95
Association

Flight 170 Professional Airline 1/1/95
Superintendents Flight Control
Association

- 7 -
10

Approximately 3,600 of Delta's personnel are based outside the United
States. Delta personnel in certain foreign countries, including most of
Delta's personnel in Germany, are represented by labor organizations.

Delta's relations with labor unions in the United States are governed by
the Railway Labor Act. Under the Railway Labor Act, the collective bargaining
agreements between Delta and labor unions do not expire but instead become
amendable as of a stated date. If either party wishes to modify the terms of
any such agreement, it must notify the other party before the contract becomes
amendable. After receipt of such notice, the parties must meet for direct
negotiations and, if no agreement is reached, either party may request the
National Mediation Board ("NMB") to appoint a federal mediator. If no
agreement is reached in mediation, the NMB may determine, at any time, that an
impasse exists and proffer binding arbitration. Either party may decline to
submit to arbitration. If arbitration is rejected, a 30-day "cooling-off"
period commences, following which the union may strike and the airline may
resort to "self-help," including the imposition of its proposed changes to the
collective bargaining agreement and the hiring of replacement workers.

Delta's collective bargaining agreements with ALPA and the Professional
Airline Flight Control Association ("PAFCA") became amendable on January 1,
1995, and formal negotiations with ALPA and PAFCA began in November 1994. As
part of its Leadership 7.5 program, the Company is seeking $340 million in
annual productivity improvements and wage and benefit reductions from ALPA. On
May 8, 1995, the NMB, at the Company's request, appointed federal mediators to
participate in the collective bargaining negotiations between Delta and ALPA.

Delta and PAFCA reached agreement on a new collective bargaining
contract, subject to ratification by the flight superintendents employed by the
Company. On September 8, 1995, however, the flight superintendents rejected
the proposed contract. Delta and PAFCA intend to continue negotiations on a
new agreement.

The outcome of Delta's negotiations with ALPA and PAFCA cannot presently
be determined.

Environmental Matters

The Airport Noise and Capacity Act of 1990 (the "ANCA") requires the
phase-out of Stage 2 aircraft by December 31, 1999, subject to certain
exceptions. In 1991, the FAA issued regulations which implement the ANCA by
requiring air carriers to reduce (by modification or retirement) the number of
Stage 2 aircraft operated by 25% by December 31, 1994, 50% by December 31,
1996, 75% by December 31, 1998, and 100% by December 31, 1999. Alternatively,
a carrier may satisfy the regulations by operating a fleet that is at least
55%, 65%, 75% and 100% Stage 3 by the respective dates set forth in the
preceding sentence.

On December 31, 1994, Delta operated 364 Stage 3 aircraft, constituting
67% of the Company's fleet, and thus complied with the first phase-out
deadline. On June 30, 1995, Delta operated 367 Stage 3 aircraft, constituting
68% of the Company's fleet. Accordingly, Delta

- 8 -
11

anticipates that it will be able to comply with the requirements for December
31, 1996, by operating a fleet comprised of at least 65% Stage 3 aircraft.
Delta anticipates it will comply with the later compliance deadlines, although
the Company has not yet determined which alternative it will select with
respect to such deadlines. Information relating to Delta's agreement to
purchase certain aircraft engine hushkits is set forth under "Operational
Review - Aircraft Fleet" on page 9 of Delta's 1995 Annual Report to
Stockholders, and is incorporated herein by reference.

The ANCA recognizes the rights of operators of airports with noise
problems to implement local noise abatement procedures so long as such
procedures do not interfere unreasonably with interstate or foreign commerce or
the national air transportation system. It generally provides that local noise
restrictions on Stage 3 aircraft first effective after October 1, 1990, require
FAA approval, and establishes a regulatory notice and review process for local
restrictions on Stage 2 aircraft first proposed after October 1, 1990. While
Delta has had sufficient scheduling flexibility to accommodate local noise
restrictions in the past, the Company's operations could be adversely impacted
if locally-imposed regulations become more restrictive or widespread.

The European Union has adopted a uniform policy requiring member states to
phase-out Stage 2 aircraft. Under the policy provisions, the phase-out of
Stage 2 aircraft began on April 1, 1995, and will extend for seven years. Each
Stage 2 aircraft will be assured a 25 year operating life, but not extending
beyond April 1, 2002. Delta anticipates it will be able to comply with this
Stage 2 aircraft phase-out program, which will apply at all airports in the
member states. Other local European airport regulations which penalize or
restrict operations by Stage 2 aircraft have not in the past had an adverse
effect on Delta's operations. Delta's operations could be adversely impacted,
however, if such regulations become more restrictive or widespread.

The United States Environmental Protection Agency (the "EPA") is
authorized to regulate aircraft emissions. The engines on Delta's aircraft
comply with the applicable EPA standards.

Delta has been identified by the EPA as a potentially responsible
party (a "PRP") with respect to the following federal Superfund Sites: the
Operating Industries, Inc. Site in Monterey Park, California; the Peak Oil Site
in Tampa, Florida; and the Petroleum Products Corporation Site in Pembroke
Park, Florida. In addition, Delta is a third party defendant in United States
of America v. J.B. Stringfellow, Jr., a lawsuit involving the cleanup of the
Stringfellow Superfund Site in Los Angeles, California. Delta's alleged
volumetric contribution to these sites is limited. Delta is also the subject
of an administrative enforcement action brought by the Georgia Environmental
Protection Division (the "Georgia EPD") concerning alleged violations of
certain air permitting regulations and other provisions of the Clean Air Act
and the Georgia air quality rules at Delta's aircraft maintenance facility at
Hartsfield Atlanta International Airport. Delta has executed a consent order
with the Georgia EPD, which includes a monetary penalty of $310,000 (which may
be reduced by $100,000 under certain circumstances), and an additional, not yet
determined, monetary penalty covering certain emissions. Delta is currently
aware of soil and/or ground water contamination present on its leaseholds at
several domestic airports; the Company has a program in place to investigate
and, if appropriate, remediate these sites. Management presently believes that
the resolution of these matters is not likely to have a material adverse effect
on the Company's consolidated financial condition, results of operations or
liquidity.

- 9 -
12

Frequent Flyer Program

Delta, like other major airlines, has established a frequent flyer
program offering incentives to maximize travel on Delta. This program allows
participants to accrue mileage for award travel while flying on Delta, the
Delta Connection carriers and participating airlines. Mileage credit may also
be accrued for the use of certain services offered by program partners such as
hotels, car rental agencies and credit card companies. Delta reserves the
right to terminate the program with six months advance notice, and to change
the program's terms and conditions at any time without notice.

Effective May 1, 1995, Delta modified its frequent flyer program in
certain respects. The changes included reducing the threshold for a free
travel award; making free travel awards more readily transferable; providing
that miles earned expire in certain circumstances; and reducing minimum mileage
credit.

Mileage credits earned can be redeemed for free or upgraded travel, for
membership in Delta's Crown Room Club and for other program partner awards.
Travel awards are subject to certain transfer restrictions and, in most cases,
blackout dates and capacity controlled seating. Miles earned prior to May 1,
1995 do not expire so long as Delta has a frequent flyer program. Miles earned
on or after May 1, 1995 are valid for 36 months from the month of the
participant's last qualifying Delta or Delta Connection flight; every time a
participant completes a qualifying Delta or Delta Connection flight, his
mileage balance is extended for another 36 months.

As of June 30, 1993, a participant in the frequent flyer program became
eligible for a free travel award after accruing 30,000 miles. Effective May 1,
1995, Delta modified the program by reducing the number of miles required to
become eligible for a free travel award to 25,000. Delta estimates the
potential number of roundtrip flight awards outstanding to be 5.0 million at
June 30, 1993, 7.9 million at June 30, 1994 and 8.8 million at June 30, 1995
(based on program accounts with balances in excess of 30,000 miles, 25,000
miles and 25,000 miles, respectively). Of these earned awards, Delta expects
up to approximately 3.3 million, 5.1 million and 5.7 million, respectively, to
be redeemed. The difference between the roundtrip awards outstanding and the
awards expected to be redeemed is the estimate, based on historical data, of
awards which will (1) never be redeemed; (2) be redeemed for something other
than a free trip; or (3) be redeemed on another carrier participating in the
program. Accounts with balances in excess of 30,000 miles represented 52% of
the total mileage balance of all participants at June 30, 1993. Accounts with
balances in excess of 25,000 miles represented 61% and 69%, respectively, of
the total mileage balance of all participants at June 30, 1994 and 1995.

Delta accounts for its frequent flyer program obligations by recording
the estimated incremental cost associated with the potential flight awards as a
liability and passenger service expense. Delta monitors changes in the
potential free travel awards under the program, and the liability and
appropriate expense account balances are adjusted as necessary. The estimated
incremental cost associated with a potential flight award does not include any
contribution to overhead or profit. Such incremental cost is based on Delta's
system average cost per passenger

- 10 -
13

for fuel; food and food supplies; passenger insurance, injuries, losses and
damages; interrupted trips and oversales; porter service; ticket forms; bag
tags; boarding forms; in-flight entertainment; and customs. The trip length is
determined by calculating the average trip length to the various award
destinations weighted by the historical number of redemptions for each
destination. Delta does not record a liability for mileage earned by
participants who have not reached the level to become eligible for a free
travel award. Delta believes this exclusion is immaterial and appropriate
because the large majority of these participants are not expected to earn a
free flight award. Delta does not account for the redemption of non-travel
awards since the cost of these awards to Delta is negligible. At June 30,
1993, 1994 and 1995, the accrued liability was $69 million, $95 million and
$101 million, respectively.

Frequent flyer program participants flew 4.5 million, 5.7 million and
5.8 million free round-trips in fiscal years 1993, 1994 and 1995, respectively.
These round-trips accounted for approximately 6%, 7% and 8% of the total
passenger miles flown for the respective periods. Delta believes that the low
percentage of free passenger miles, its load factor and the restrictions
applied to free travel awards minimize the displacement of revenue passengers.

Transactions with Pan Am Corporation

Asset Purchase Agreement. Pursuant to an asset purchase agreement dated
July 27, 1991, as amended (the "Asset Purchase Agreement"), with Pan Am
Corporation and certain of its subsidiaries, debtors-in-possession under
Chapter 11 of the Bankruptcy Code ("Pan Am"), Delta, in 1991, purchased certain
assets relating to Pan Am's Boston-New York-Washington, D. C. Shuttle, and
route authorities to Europe, Asia and Africa. The purchased assets included
(1) substantially all of Pan Am's then-existing transatlantic route authorities
and related beyond rights; (2) certain take-off and landing authorizations and
slots; (3) equity interests in certain aircraft, aircraft spare engines and
spare parts; and (4) leasehold interests in certain airport facilities.

Delta's purchase price under the Asset Purchase Agreement was $416
million, subject to certain adjustments. Under the Asset Purchase Agreement,
Delta also assumed certain liabilities, including $66 million in mortgages on
acquired assets and up to $100 million of Pan Am's passenger tickets under
certain circumstances. In connection with these asset acquisitions, Delta
hired approximately 7,800 Pan Am personnel and entered into operating leases
for 42 used aircraft.

Participation in Plan of Reorganization. Pursuant to a letter dated
August 11, 1991, as amended on October 22, 1991, among Delta, Pan Am and the
Official Committee of Unsecured Creditors of Pan Am (the "Creditors
Committee"), Delta agreed, subject to certain terms and conditions, to
participate in a plan of reorganization for Pan Am, to provide certain
debtor-in-possession financing (the "DIP Loan") to Pan Am prior to the
effective date of Pan Am's proposed plan of reorganization and to amend the
Asset Purchase Agreement in certain respects.

- 11 -
14

On December 1, 1991, Delta advised Pan Am that it could not agree to Pan
Am's request to provide additional financing to Pan Am prior to the effective
date of Pan Am's proposed plan of reorganization. Pan Am ceased operations on
December 4, 1991, and its proposed plan of reorganization before the United
States Bankruptcy Court for the Southern District of New York (the "Bankruptcy
Court") was not confirmed. Pan Am is liquidating its assets.

CRAF. To resolve certain claims against Pan Am by the United States Air
Force (the "Air Force") related to Pan Am's participation in the Civil Reserve
Air Fleet Enhancement Program (the "CRAF Program"), Delta entered into an
agreement in principle dated October 17, 1991, with the Air Force. Under the
agreement in principle, Delta committed to the CRAF Program, for five years,
aircraft having a certain point value under the CRAF Program. This commitment
is currently being met by Delta's agreeing to make available 26 of its
international-range aircraft for use by the military under certain stages of
readiness related to national emergencies.

Litigation Relating to Delta's Participation in Pan Am's Plan of
Reorganization. On March 6, 1992, Pan Am, the Creditors Committee and the Ad
Hoc Committee of Administrative and Priority Creditors of Pan Am filed a
consolidated amended complaint (the "Complaint") against Delta relating to
Delta's participation in Pan Am's proposed plan of reorganization. The
Complaint alleged, among other things, that Delta breached its contractual
obligations and promises to participate in the plan of reorganization; violated
its duty of good faith and fair dealing; breached its fiduciary duties to Pan
Am and its creditors; and acted in bad faith. The United States District Court
for the Southern District of New York ("District Court") conducted a trial
between May 4, 1994 and June 10, 1994 on liability issues. In an opinion and
order dated December 22, 1994, the District Court (1) ruled that Delta had no
liability in this lawsuit; (2) ordered Pan Am to repay to Delta the DIP Loan;
and (3) held that the Creditors Committee had no liability to Delta under
Delta's counterclaims. No party appealed the District Court's decision, and
the time period for filing an appeal expired on February 6, 1995.

Certain other legal actions relating to Delta's participation in Pan
Am's proposed plan of reorganization are still pending including, among others,
the following actions.

On March 12, 1992, a purported class action complaint was filed against
Delta in the District Court by former Pan Am employees who allege, among other
things, that they were intended third-party beneficiaries of Delta's agreement
with Pan Am to participate in Pan Am's proposed plan of reorganization. The
former employees, who have requested and are entitled to a jury trial, make
allegations and claims similar to those asserted in the Complaint described
above. In their complaint, the former employees seek damages of at least $1.1
billion for loss of employment, loss of continued wages and benefits with a
reorganized Pan Am and out-of-pocket losses; costs and attorneys' fees; and
other unspecified relief. On July 8, 1992, Delta filed its answer denying
liability in this lawsuit and asserting various affirmative defenses.
Additionally, Delta filed a third party complaint against the Creditors
Committee, its individual members and Pan Am alleging that these parties are
liable to Delta for any amounts that plaintiffs in this lawsuit may recover
from Delta. Pan Am filed an answer denying liability to Delta; the Creditors
Committee and its members filed a motion to dismiss Delta's third party
complaint. On December 4, 1992, the District Court dismissed Delta's third
party complaint against the Creditors Committee and its members, but granted
Delta permission to replead its claims. On January 25,

- 12 -
15

1993, Delta filed an amended third party complaint against the Creditors
Committee and its members, who filed a motion to dismiss Delta's amended
claims. The District Court (1) denied plaintiffs' motion for class action
certification on March 10, 1993 and reaffirmed this order on August 6, 1993;
and (2) denied the motion by the Creditors Committee and its members to dismiss
Delta's amended third party complaint on August 18, 1993. On September 24,
1993, the Creditors Committee and its members answered Delta's amended third
party complaint, denying liability to Delta and asserting various affirmative
defenses. On December 14, 1993, the District Court denied plaintiffs' motion
requesting the District Court to reconsider its order denying plaintiffs'
motion for class action certification or, alternatively, to permit an immediate
appeal of that order. On February 28, 1994, Delta filed a motion for summary
judgment on all of plaintiffs' claims in this lawsuit; the plaintiffs are
opposing this motion. Also on February 28, 1994, the Creditors Committee and
its members filed motions for summary judgment on Delta's third party claims
for indemnification and contribution in this lawsuit; Delta is opposing these
motions. On April 28, 1995, Delta filed a supplementary memorandum in support
of its motion for summary judgment on all of plaintiffs' claims; the plaintiffs
continue to oppose this motion, which is pending before the District Court. On
or about September 15, 1995, Delta and the plaintiffs agreed to settle this
lawsuit subject to the completion of definitive settlement documents and
approval of the settlement by the District Court.

On September 10, 1992, a lawsuit was filed against Delta in the District
Court by approximately 120 former Pan Am pilots who make allegations and claims
similar to those asserted in the purported class action complaint by former Pan
Am employees described in the preceding paragraph. In their complaint, the
plaintiffs, who have requested and are entitled to a jury trial, seek
unspecified damages for lost wages and benefits and out-of-pocket losses; costs
and attorneys' fees; and other unspecified relief. On January 8, 1993, Delta
filed its answer denying liability in this lawsuit and asserting various
affirmative defenses. Additionally, Delta filed a third party complaint
against the Creditors Committee and its individual members alleging that these
parties are liable to Delta for any amounts that plaintiffs in this lawsuit may
recover from Delta. The Creditors Committee and its members filed a motion to
dismiss Delta's third party complaint. On August 18, 1993, the District Court
denied this motion. On September 24, 1993, the Creditors Committee and its
members answered Delta's third party complaint, denying liability to Delta and
asserting various affirmative defenses. On February 28, 1994, Delta filed a
motion for summary judgment on all of plaintiffs' claims in this lawsuit; the
plaintiffs are opposing this motion. Also on February 28, 1994, the Creditors
Committee and its members filed motions for summary judgment on Delta's third
party claims for indemnification and contribution in this lawsuit; Delta is
opposing these motions. On April 28, 1995, Delta filed a supplementary
memorandum in support of its motion for summary judgment on all of plaintiffs'
claims; the plaintiffs continue to oppose this motion, which is pending before
the District Court. On or about September 15, 1995, Delta and the plaintiffs
(except one plaintiff who cannot be located) agreed to settle this lawsuit
subject to the completion of definitive settlement documents and approval of
the settlement by the District Court.

A purported class action complaint was commenced against Delta in the
Supreme Court of the State of New York, County of New York, on behalf of
participants of Pan Am's WorldPass Frequent Flyer Program ("WorldPass") who
elected to obtain Pan Am WorldPass travel certificates rather than to transfer
their accumulated miles into Delta's frequent flyer program.

- 13 -
16

The WorldPass participants were seeking unspecified damages, costs and
attorneys' fees, and other unspecified relief. Delta removed this action
to the Bankruptcy Court. On April 6, 1992, Delta filed its answer denying
liability in this lawsuit and asserting various affirmative defenses. On July
5, 1995, the plaintiff and Delta filed with the Bankruptcy Court a joint
application for the voluntary dismissal of this lawsuit with prejudice as to
the plaintiff and without prejudice as to all other putative class members.
The Bankruptcy Court approved the joint application on September 21, 1995.

ITEM 2. PROPERTIES

Flight Equipment

Information relating to Delta's aircraft fleet is set forth under
"Operational Review - Aircraft Fleet" on pages 9-10, and in Notes 8 and 9 of
the Notes to Consolidated Financial Statements on pages 32-33, of Delta's 1995
Annual Report to Stockholders, and is incorporated herein by reference.

Ground Facilities

Delta leases most of the land and buildings that it occupies. The
Company's largest aircraft maintenance base, various computer, cargo, flight
kitchen and training facilities and most of its principal offices are located
at or near Hartsfield Atlanta International Airport in Atlanta, Georgia, on
land leased from the City of Atlanta under long-term leases. Delta owns a
portion of its principal offices, its Atlanta reservations center and other
improved and unimproved real property in Atlanta, as well as a limited number
of radio transmitting and receiving sites and certain other facilities.

Delta leases ticket counter and other terminal space, operating areas
and air cargo facilities in most of the airports which it serves. These leases
generally run for periods of from less than one year to thirty years or more,
and contain provisions for periodic adjustment of lease rates. At most
airports which it serves, Delta has entered into use agreements which provide
for the non-exclusive use of runways, taxiways, and other facilities; landing
fees under these agreements normally are based on the number of landings and
weight of aircraft. The Company also leases aircraft maintenance facilities at
certain airports, generally under long-term leases which cover the cost of
providing, operating and maintaining such facilities. In addition, Delta
leases marketing, ticket and reservations offices in certain major cities which
it serves; these leases are generally for shorter terms than the airport
leases. Additional information relating to Delta's ground facilities is set
forth in Notes 4 and 8 of the Notes to Consolidated Financial Statements on
pages 29 and 32-33 of Delta's 1995 Annual Report to Stockholders, and is
incorporated herein by reference.

In recent years, some airports have increased or sought to increase the
rates charged to airlines to levels that, in the airlines' opinion, are
unreasonable. The extent to which such charges are limited by statute or
regulation and the ability of airlines to contest such charges has been subject
to litigation and to administrative proceedings before the DOT. If the
limitations on such charges are relaxed or the ability of airlines to challenge
such charges is restricted, the rates charged by airports to airlines may
increase substantially.

- 14 -
17

ITEM 3. LEGAL PROCEEDINGS

In January 1987, the Association of Flight Attendants ("AFA"), the
collective bargaining agent for the flight attendants at Western Air Lines,
Inc. ("Western") prior to the merger of Western into Delta on April 1, 1987
(the "Merger"), filed suit against Western in the United States District Court
for the District of Columbia. The AFA suit sought to compel Western to
arbitrate a grievance alleging that Western breached the AFA-Western collective
bargaining agreement by not requiring Delta (1) to be bound by that agreement;
and (2) to recognize the AFA as representing the former Western flight
attendants after the Merger. The District Court dismissed the action on the
grounds that the grievance raised representation matters which under the
Railway Labor Act are within the exclusive jurisdiction of the National
Mediation Board (which subsequently ruled that the representation certification
of the AFA at Western terminated on April 1, 1987). The AFA appealed to the
United States Court of Appeals for the District of Columbia, which reversed the
District Court's dismissal of the AFA's action to compel arbitration, ruling
(1) that the AFA's claim based on any right of continued representation is
moot; (2) that the AFA's claim for damages is not moot; and (3) that an
arbitrator has authority under the Railway Labor Act to adjudicate the AFA's
grievance to the extent it seeks damages for Western's alleged breach of the
collective bargaining agreement. Delta then filed a petition for certiorari in
the United States Supreme Court which, on April 2, 1990, refused to review the
Court of Appeals' decision. As a result, arbitration of the AFA's grievance
will proceed and, if the AFA's claim is upheld, damages could be assessed
against Delta. Delta has a number of defenses which it considers to be valid,
and will vigorously assert these defenses in the arbitration.

On May 16, 1994, a purported class action complaint was filed in the
United States District Court for the Northern District of Georgia against Delta
and certain Delta officers in their capacity as members of the Administrative
Committee responsible for administering certain Company employee benefit plans.
The plaintiffs, who have requested a jury trial, are 21 former Delta employees
who seek to represent the class consisting of the approximately 1,800 former
non-pilot employees of Delta who retired from active service between July 23,
1992 and January 1, 1993. The complaint alleges that Delta violated the
Employee Retirement Income Security Act by (1) modifying health benefits for
this group of retirees in spite of alleged oral and written representations
that it would not make any such modifications; (2) breaching its fiduciary
duties and interfering with plaintiffs' benefits by making such modifications
and by allegedly giving false assurances that no enhanced retirement benefit
incentives were being considered or would be offered in the future; and (3)
discriminating against certain benefit plan participants. The complaint also
alleges, among other things, that Delta breached a contract with plaintiffs by
amending Delta's pass policy to suspend the flight privileges of a retiree
during any period such retiree is employed by certain other airlines.
Plaintiffs are seeking injunctive relief, unspecified compensatory and punitive
damages, costs and attorneys' fees, and such other relief as the District Court
deems appropriate. On July 18, 1994, Delta filed its answer denying liability
under the complaint and asserting various affirmative defenses. On November 4,
1994, the District Court (1) denied the plaintiffs' motion for class action
certification; and (2) granted Delta's motion to dismiss plaintiffs' claims
concerning Delta's pass policy for lack of subject matter jurisdiction. On
January 11, 1995, the District Court denied plaintiffs' motion requesting the
District Court to reconsider its November 4, 1994 decision, but granted
plaintiffs' motion to permit an immediate appeal of that order. The plaintiffs
then filed a petition to appeal with the

- 15 -
18

United States Court of Appeals for the Eleventh Circuit which, on March 8,
1995, agreed to hear plaintiffs' appeal of the District Court's November 4,
1994 decision. Delta intends to defend this matter vigorously.

On February 10, 1995, Delta changed its domestic travel agency
commission program by introducing a maximum commission payment of $50 for any
round trip domestic airline ticket with a base fare in excess of $500, and $25
for any one-way domestic airline ticket with a base fare in excess of $250.
The maximum commission applies to all tickets issued by United States and
Canada-based travel agencies for travel on Delta flights within and between the
Continental United States, Alaska, Hawaii, Puerto Rico and the United States
Virgin Islands. Most of the major United States airlines subsequently adopted
similar commission cap programs.

Travel agents and a travel agency trade association have filed more than
30 class action antitrust lawsuits in various federal district courts against
airlines, including Delta, that implemented new travel agent commission cap
programs. The plaintiffs, who are seeking unspecified treble damages under the
antitrust laws and an injunction to prevent the airlines from maintaining the
new commission cap programs, allege that the defendants conspired to reduce the
commissions paid to travel agents in violation of the Sherman Act. On June 1,
1995, the Judicial Panel on Multidistrict Litigation consolidated these cases
for pretrial proceedings before the United States District Court in
Minneapolis, which has certified a plaintiff class consisting of all travel
agents in the United States who sold airline tickets subject to the commission
cap on American, Continental, Delta, Northwest, TWA, United or USAir. On
August 18, 1995, the District Court approved a settlement agreement between TWA
and the plaintiffs under which TWA represented it had terminated its commission
cap program and agreed, among other things, to pay the commissions it would
have paid between specified dates had its commission cap program not been in
place. On August 23, 1995, the District Court denied the plaintiffs' motion
for a preliminary injunction, as well as the motions for summary judgment filed
by the airline defendants (except TWA). On September 12, 1995, the airlines
(except TWA) filed a motion with the District Court to permit an immediate
appeal of the District Court's ruling denying the airlines' motions for summary
judgment; the District Court has not yet ruled on this motion. Delta believes
the allegations against it are without merit, and it intends to defend these
matters vigorously.

Delta is also a defendant in certain other legal actions relating to
alleged employment discrimination practices, other matters concerning past and
present employees, environmental issues and other matters concerning Delta's
business. Although the ultimate outcome of these matters, the matters
discussed above in this Item 3, and the litigation relating to Delta's
participation in Pan Am's proposed plan of reorganization (see "ITEM 1.
Business-Transactions with Pan Am Corporation" on pages 11-14 of this Form 10-K)
cannot be predicted with certainty and could have a material adverse effect on
Delta's consolidated financial condition, results of operations or liquidity,
management presently believes that the resolution of these actions is not
likely to have a material adverse effect on Delta's consolidated financial
condition, results of operations or liquidity.

- 16 -
19

For a discussion of certain environmental matters, see "ITEM 1.
Business - Environmental Matters" on pages 8-9 of this Form 10-K. For a
discussion of the settlement of certain antitrust litigation, see "Financial
Review - Future Outlook - Antitrust Settlement" on page 17 of Delta's 1995
Annual Report to Stockholders, which is incorporated herein by reference.

Several United States carriers, including Delta, have received civil
investigative demands from the United States Department of Justice related to
an antitrust investigation of incentives paid by airlines to travel agents in
excess of base commission payments. In response to the civil investigative
demands, Delta has produced documents relating to its travel agent programs.
Delta believes that its travel agent programs are legal and that it has not
violated the antitrust laws.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Certain information concerning Delta's executive officers follows. All
positions shown are with Delta. There are no family relationships between any
of Delta's executive officers.

Ronald W. Allen Mr. Allen has been Chairman of the
Board and Chief Executive Officer since
August 1, 1987. On March 1, 1993, Mr.
Allen was elected to the additional
office of President, a position he also
held from August 9, 1990 through April
30, 1991. He was President and Chief
Operating Officer from November 1983
through July 1987. Age 53.

H. C. Alger Executive Vice President - Operations,
March 1993 to date; Senior Vice
President - Operations, February 1992
through February 1993; Vice President -
Flight Operations, August 1987 through
January 1992. Age 57.

Robert W. Coggin Executive Vice President - Marketing,
September 13, 1995 to date; Senior Vice
President - Marketing, August 1992
through September 12, 1995; Senior
Vice President - Marketing Development
and Planning, February 1992 through
July 1992; Vice President - Marketing
Development and Planning, November 1991
through January 1992; Vice President -
Marketing Development, November 1988
through October 1991. Age 59.

Maurice W. Worth Executive Vice President - Customer
Service, September 13, 1995 to date;
Senior Vice President - Personnel, May
1991 through September 12, 1995; Vice
President - Personnel, November 1989
through April 1991. Age 55.

- 17 -
20

W. Martin Braham Senior Vice President - Airport
Customer Service, March 1993 to date;
Vice President - Airport Customer
Service, August 1992 through February
1993; Assistant Vice President -
International Airport Customer Service,
February 1992 through July 1992;
Assistant Vice President - Stations,
August 1991 through January 1992;
Director - Stations, August 1989
through July 1991. Age 50.

Robert S. Harkey Senior Vice President - General Counsel
and Secretary, November 1994 to date;
Senior Vice President - General
Counsel, November 1990 through October
1994; Vice President - General Counsel,
November 1988 through October 1990.
Age 54.

Russell H. Heil Senior Vice President - Technical
Operations, February 1992 to date;
Executive Vice President - Technical
Operations, May 1991 through January
1992; Executive Vice President -
Operations and Personnel, August 16,
1990 through April 1991; Senior Vice
President - Personnel, November 1984
through August 15, 1990. Age 53.

Rex A. McClelland Senior Vice President - Corporate
Services, August 1993 to date; Senior
Vice President - Administrative
Services, February 1992 through July
1993; Senior Vice President -
Operations, August 1987 through January
1992. Age 59.

Thomas J. Roeck, Jr. Senior Vice President - Finance and
Chief Financial Officer, June 1988 to
date. Age 51.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Information required by this item is set forth under "Common Stock and
Depositary Shares Representing Series C Convertible Preferred Stock", "Number
of Stockholders" and "Market Prices and Dividends" on page 44 of Delta's 1995
Annual Report to Stockholders, and is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Information required by this item is set forth on pages 42-43 of Delta's
1995 Annual Report to Stockholders, and is incorporated herein by reference.

- 18 -
21

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Information required by this item is set forth under "Operational Review
- - Leadership 7.5" on page 6, and under "Financial Review" on pages 10-17, of
Delta's 1995 Annual Report to Stockholders, and is incorporated herein by
reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item is set forth on pages 22-39, and in
"Report of Independent Public Accountants" on page 40, of Delta's 1995 Annual
Report to Stockholders, and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this item is set forth on pages 4-7, and under
"Other Matters Involving Directors and Executive Officers - Compliance with
Section 16(a) of the Securities Exchange Act of 1934" on page 12, of Delta's
Proxy Statement dated September 15, 1995, and is incorporated herein by
reference. Certain information regarding executive officers is contained in
Part I of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item is set forth under "General
Information - Compensation of Directors" on pages 3-4, and "- Charitable Award
Program" on page 4, and on pages 11 and 17-20, of Delta's Proxy Statement dated
September 15, 1995, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Information required by this item is set forth on pages 8-10 of Delta's
Proxy Statement dated September 15, 1995, and is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by this item is set forth on page 11 of Delta's
Proxy Statement dated September 15, 1995, and is incorporated herein by
reference.

- 19 -
22

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a)(1), (2). The financial statements and schedules required by this item
are listed in the Index to Consolidated Financial Statements and Schedules on
page 23 of this Form 10-K.

(3). The exhibits required by this item are listed in the Exhibit
Index on pages 28-31 of this Form 10-K. The management contracts and
compensatory plans or arrangements required to be filed as an exhibit to this
Form 10-K are listed as Exhibits 10.8 to 10.14 in the Exhibit Index.

(b) During the quarter ended June 30, 1995, Delta did not file
any Current Reports on Form 8-K.

- 20 -
23

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 26th day of
September, 1995.

DELTA AIR LINES, INC.

By: /s/ Ronald W. Allen
-----------------------------------
Ronald W. Allen
Chairman of the Board, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on the 26th day of September, 1995 by the
following persons on behalf of the registrant and in the capacities indicated.

Signature Title
--------- -----

/s/ Ronald W. Allen Chairman of the Board, President
- --------------------------------------- and Chief Executive Officer
Ronald W. Allen (Principal Executive Officer)

Edwin L. Artzt* Director
- --------------------------------------
Edwin L. Artzt

Henry A. Biedenharn, III* Director
- ---------------------------------
Henry A. Biedenharn, III

James L. Broadhead* Director
- ----------------------------------
James L. Broadhead

Edward H. Budd* Director
- -----------------------------------
Edward H. Budd

- 21 -
24

Signature Title
--------- -----

George D. Busbee* Director
- ------------------------------------
George D. Busbee

R. Eugene Cartledge* Director
- -----------------------------------
R. Eugene Cartledge

Mary Johnston Evans* Director
- -----------------------------------
Mary Johnston Evans

Gerald Grinstein* Director
- -----------------------------------
Gerald Grinstein

Jesse Hill, Jr.* Director
- -----------------------------------
Jesse Hill, Jr.

Peter D. Sutherland* Director
- -----------------------------------
Peter D. Sutherland

Andrew J. Young* Director
- -----------------------------------
Andrew J. Young

/s/ Thomas J. Roeck, Jr. Senior Vice President-Finance
- ----------------------------------- and Chief Financial Officer
Thomas J. Roeck, Jr. (Principal Financial Officer
and Principal Accounting Officer)

*By: /s/ Thomas J. Roeck, Jr. Attorney-In-Fact
-----------------------------
Thomas J. Roeck, Jr.

- 22 -
25

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS - Incorporated herein by reference to
"Report of Independent Public Accountants" on page 40 of Delta's 1995
Annual Report to Stockholders.

FINANCIAL STATEMENTS - All of which are incorporated herein by reference to
Delta's 1995 Annual Report to Stockholders.

Consolidated Balance Sheets - June 30, 1995 and 1994

Consolidated Statements of Operations for the years ended June 30, 1995,
1994 and 1993

Consolidated Statements of Cash Flows for the years ended June 30, 1995,
1994 and 1993

Consolidated Statements of Stockholders' Equity for the years ended June
30, 1995, 1994 and 1993

Notes to Consolidated Financial Statements - June 30, 1995, 1994 and 1993

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES

SCHEDULES SUPPORTING FINANCIAL STATEMENTS:

Schedule
Number
------

II Valuation and Qualifying Accounts for the years ended June 30, 1995,
1994 and 1993

All other schedules have been omitted as not applicable or because the
required information is included in the financial statements or notes thereto.

- 23 -
26

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE

To Delta Air Lines, Inc.:

We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in Delta Air Lines, Inc.'s annual
report to stockholders incorporated by reference in this Form 10-K and have
issued our report thereon dated August 18, 1995. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The
schedule listed in the accompanying index is the responsibility of the
Company's management, is presented for purposes of complying with the
Securities and Exchange Commission's rules, and is not part of the basic
financial statements. The schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic consolidated financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
August 18, 1995

- 24 -
27
SCHEDULE II

DELTA AIR LINES, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1995

(Amounts in Millions)

Column A Column B Column C Column D Column E

Additions
---------
Charged to
Balance At Charged to Other Balance at
Beginning Costs and Accounts- Deductions- End of
Description of Period Expenses describe describe Period
----------- --------- --------- ---------- ----------- ----------

DEDUCTION (INCREASE) IN THE BALANCE SHEET
FROM THE ASSET TO WHICH IT APPLIES:

Allowance for uncollectible accounts
receivable: $ 50 $21 $ - $42 (a) $ 29

Allowance for unrealized losses (gains) on
marketable securities: $(85) $ - $(46) (b) $ - $(131)

(a) Represents write-off of accounts considered to be uncollectible, less
collections.

(b) Represents net unrealized gain resulting from changes in market values.

-25-
28

SCHEDULE II

DELTA AIR LINES, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1994

(Amounts in Millions)

Column A Column B Column C Column D Column E

DEDUCTION (INCREASE) IN THE BALANCE SHEET
FROM THE ASSET TO WHICH IT APPLIES:

Allowance for uncollectible accounts
receivable: $82 $23 $ - $55 (a) $ 50

Allowance for unrealized losses (gains) on
marketable securities: $ 1 $ - $(85) (b) $ 1 $(85)

(a) Represents write-off of accounts considered to be uncollectible, less
collections.

(b) Represents net unrealized gain resulting from changes in market values.

-26-
29

SCHEDULE II

DELTA AIR LINES, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1993

(Amounts in Millions)

Column A Column B Column C Column D Column E

DEDUCTION IN THE BALANCE SHEET
FROM THE ASSET TO WHICH IT APPLIES:

Allowance for uncollectible accounts
receivable: $67 $27 $ - $12 (a) $82

Allowance for unrealized losses on
marketable securities: $19 $ - $ - $18 (b) $ 1

(a) Represents write-off of accounts considered to be uncollectible, less
collections.

(b) Represents reversal of previously recognized losses resulting from changes
in market values.

-27-
30

EXHIBIT INDEX

3.1 Delta's Certificate of Incorporation (Filed as Exhibit 3 to
Delta's Current Report on Form 8-K dated November 17, 1993).*

3.2 Delta's By-Laws (Filed as Exhibit 3 to Delta's Current
Report on Form 8-K dated November 17, 1993).*

4.1 Rights Agreement dated as of October 23, 1986, and Amendment
No. 1 thereto dated as of June 19, 1992, between Delta and NationsBank of
Georgia, N.A. (Filed as Exhibit 1 to Delta's Current Report on Form 8-K dated
November 4, 1986, and Exhibit 4-I to Amendment No. 2 to Delta's Registration
Statement on Form S-3 (Registration No. 33-48136)).*

4.2 Resignation, Transfer and Acceptance Agreement dated
November 30, 1992, among NationsBank of Georgia, N.A., First Chicago Trust
Company of New York, and Delta (Filed as Exhibit 4-G to Amendment No. 1 to
Delta's Registration Statement on Form S-3 (Registration No. 33-62048)).*

4.3 Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock, Series B ESOP Convertible
Preferred Stock and Series C Convertible Preferred Stock (Filed as part of
Exhibit 3 to Delta's Current Report on Form 8-K dated November 17, 1993).*

4.4 Indenture dated as of March 1, 1983, between Delta and The
Citizens and Southern National Bank, Trustee, as supplemented by the First and
Second Supplemental Indentures thereto dated as of January 27, 1986 and May 26,
1989, respectively (Filed as Exhibit 4 to Delta's Registration Statement on
Form S-3 (Registration No. 2-82412), Exhibit 4(b) to Delta's Registration
Statement on Form S-3 (Registration No. 33-2972), and Exhibit 4.5 to Delta's
Annual Report on Form 10-K for the year ended June 30, 1989).*

4.5 Agreement dated May 31, 1989, among Delta, The Citizens and
Southern National Bank and The Citizens and Southern National Bank of Florida
relating to the appointment of a successor trustee under the Indenture dated as
of March 1, 1983, as supplemented, between Delta and The Citizens and Southern
National Bank (Filed as Exhibit 4.6 to Delta's Annual Report on Form 10-K for
the year ended June 30, 1989).*

4.6 Indenture dated as of April 30, 1990, between Delta and The
Citizens and Southern National Bank of Florida, Trustee (Filed as Exhibit 4(a)
to Amendment No. 1 to Delta's Registration Statement on Form S-3 (Registration
No. 33-34523)).*

4.7 Indenture dated as of May 1, 1991, between Delta and The
Citizens and Southern National Bank of Florida, Trustee (Filed as Exhibit 4 to
Delta's Registration Statement on Form S-3 (Registration No. 33-40190)).*

- 28 -
31

4.8 Indenture dated as of June 15, 1993, between Delta and
NationsBank of Georgia, N.A., Trustee, relating to Delta's 3.23% Convertible
Subordinated Notes due June 15, 2003 (Filed as Exhibit 4.2 to Delta's Current
Report on Form 8-K dated June 29, 1993).*

4.9 Note Purchase Agreement dated February 22, 1990, among the
Delta Family-Care Savings Plan, Issuer, Delta, Guarantor, and Various Lenders
relating to the Guaranteed Serial ESOP Notes (Filed as Exhibit 10 to Delta's
Current Report on Form 8-K dated April 25, 1990).*

4.10 Indenture of Trust dated as of August 1, 1993, among Delta,
Fidelity Management Trust Company, ESOP Trustee, and Wilmington Trust Company,
Trustee, relating to the Guaranteed Serial ESOP Notes (Filed as Exhibit 4.12 to
Delta's Annual Report on Form 10-K for the year ended June 30, 1993).*

4.11 Letter of Credit dated August 12, 1993, issued by
NationsBank of Georgia, N.A., to Wilmington Trust Company, Trustee, relating to
the Guaranteed Serial ESOP Notes (Filed as Exhibit 4.13 to Delta's Annual
Report on Form 10-K for the year ended June 30, 1993).*

4.12 Amended and Restated Credit Agreement dated as of December
4, 1992, among Delta, Certain Banks and NationsBank of Georgia, N.A., as Agent
Bank, as amended by the First Amendment thereto dated as of June 4, 1993
(Filed as Exhibit 4.2 to Delta's Current Report on Form 8-K dated December 8,
1992 and Exhibit 4-I to Amendment No. 2 to Delta's Registration Statement on
Form S-3 (Registration No. 33-62048)).*

Delta is not filing any other instruments evidencing any indebtedness
because the total amount of securities authorized under any single such
instrument does not exceed 10% of the total assets of Delta and its
subsidiaries on a consolidated basis. Copies of such instruments will be
furnished to the Securities and Exchange Commission upon request.

10.1 Purchase Agreement No. 1646 between The Boeing Company and
Delta relating to Boeing Model 737-332 aircraft (Filed as Exhibit 10.8 to
Delta's Annual Report on Form 10-K for the year ended June 30, 1990).*

10.2 Stock Purchase Agreement dated July 10, 1989, between Delta
and Swissair, Swiss Air Transport Company Ltd. (Filed as Exhibit 10.2 to
Delta's Current Report on Form 8-K dated July 24, 1989).*

10.3 Stock Purchase Agreement dated August 21, 1989, between
Delta and Swissair, Swiss Air Transport Company Ltd. (Filed as Exhibit 10.9 to
Delta's Annual Report on Form 10-K for the year ended June 30, 1989).*

-29-
32

10.4 Stock Purchase Agreement dated October 26, 1989, between
Singapore Airlines Limited and Delta (Filed as Exhibit 10.1 to Delta's Current
Report on Form 8-K dated November 2, 1989).*

10.5 Stock Purchase Agreement dated October 26, 1989, between
Delta and Singapore Airlines Limited (Filed as Exhibit 10.2 to Delta's Current
Report on Form 8-K dated November 2, 1989).*

10.6 Sixth Amended and Restated Limited Partnership Agreement of
WORLDSPAN, L.P. dated as of April 30, 1993 (Filed as Exhibit 10.6 to Delta's
Annual Report on Form 10-K for the year ended June 30, 1993).*

10.7 Purchase Agreement No. DAC 90-10-D between McDonnell Douglas
Corporation and Delta relating to MD-90 aircraft, as amended (Filed as Exhibit
10.1 to Delta's Quarterly Report on Form 10-Q for the quarter ended September
30, 1990, and Exhibit 10 to Delta's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994). *

10.8 Employment Agreement dated July 29, 1987, between Delta and
Mr. Ronald W. Allen, as amended by the Amendments thereto dated February 1,
1992, August 15, 1992, and October 28, 1993 (Filed as Exhibit 10.8 to Delta's
Annual Report on Form 10-K for the year ended June 30, 1987, Exhibit 10 to
Delta's Quarterly Report on Form 10-Q for the quarter ended March 31, 1992,
Exhibit 10.13 to Delta's Annual Report on Form 10-K for the year ended June 30,
1992, and Exhibit 10 to Delta's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1993).*

10.9 Delta's Incentive Compensation Plan, as amended.

10.10 Delta's 1989 Stock Incentive Plan, as amended (Filed as
Exhibit 10.10 to Delta's Annual Report on Form 10-K for the year ended June 30,
1994).*

10.11 Delta's Executive Deferred Compensation Plan, as amended.

10.12 Directors' Deferred Compensation Plan (Filed as Exhibit
10.14 to Delta's Annual Report on Form 10-K for the year ended June 30, 1987).*

10.13 Directors' Charitable Award Program (Filed as Exhibit 10.14
to Delta's Annual Report on Form 10-K for the year ended June 30, 1993).*

10.14 1991 Delta Excess Benefit Plan, The Delta Supplemental
Excess Benefit Plan and Form of Excess Benefit Plan Agreement (Filed as Exhibit
10.18 to Delta's Annual Report on Form 10-K for the year ended June 30, 1992).*

10.15 Agreement between Delta and The Air Line Pilots in the
Service of Delta as Represented by The Air Line Pilots Association,
International as supplemented (Filed as Exhibit

-30-
33

10.28 to Delta's Annual Report on Form 10-K for the year ended June 30, 1990
and Exhibit 10.20 to Delta's Annual Report on Form 10-K for the year ended June
30, 1992).*

11. Statement regarding computation of per share earnings for
the years ended June 30, 1993, 1994 and 1995.

12. Statement regarding computation of ratio of earnings to
fixed charges for the years ended June 30, 1991, 1992, 1993, 1994 and 1995.

13. Portions of Delta's 1995 Annual Report to Stockholders.

23. Consent of Arthur Andersen LLP.

24. Powers of Attorney.

27. Financial Data Schedule (for SEC use only).

- --------------------

*Incorporated herein by reference

- 31 -