Airtran 2006 Annual Report Download - page 13

Aircraft Maintenance and Operations. We are subject to the jurisdiction of the FAA with respect to aircraft maintenance and operations, including equipment,
dispatch, communications, training, flight personnel and other matters affecting air safety. In 2006, the FAA converted the oversight of AirTran to the ATOS (Aviation
Transportation Oversight System) programs. The ATOS process assesses the safety of air carrier operating systems using system safety principles, safety attributes,
risk management, and structured system engineering practices. ATOS utilizes structured, automated tools to develop a dynamic, flexible, air carrier-specific
comprehensive surveillance plan (CSP). The air carrier assessment tool (ACAT) looks for indicators of risk in the air carrier’s systems. The results of ACAT determine
the frequency of the inspections in AirTran’s CSP.
The FAA has the authority to issue new or additional regulations. To ensure compliance with its regulations, the FAA conducts regular safety audits and requires all
airlines to obtain operating, airworthiness and other certificates, which are subject to suspension or revocation for cause.
We cannot predict the cost of compliance with all present and future rules and regulations and the effect of such compliance on our business, particularly our
expansion plans and aircraft acquisition program.
Federal Aviation Taxes and Passenger Facility Charges. In 1997, a law was enacted imposing new aviation ticket taxes as part of larger tax legislation designed to
balance the nation’s budget and provide targeted tax relief as well as fund air traffic control, other FAA programs and airport development. As enacted, these new
taxes will be imposed through September 30, 2007. Currently, the federal excise tax on tickets is 7.5 percent of the base fare with a segment fee of $3.30 per
passenger enplanement, up to $6.60 each way or $13.20 per round trip. Beginning in January 2007, the segment fee was increased to $3.40 per passenger
enplanement up to $6.80 each way or $13.60 per round trip.
During 1990, Congress enacted legislation to permit airport authorities, with prior approval from the DOT, to impose passenger facility charges as a means of
funding local airport projects. These charges, which are intended to be collected by the airlines from their passengers, range from $3.00 to $4.50 per enplanement
up to $18 per round trip.
Fuel Taxes. We pay federal, state, and other taxes on fuel. We paid approximately $46.2 million, $41.4 million, and $28.8 million in fuel taxes during 2006, 2005
and 2004, respectively.
Security and Safety Measures. The Aviation and Transportation Security Act, was enacted in November 2001 and federalized substantially all aspects of civil
aviation security and required, among other things, the creation of the Transportation Security Administration, or the TSA, to oversee all aviation security and the
implementation of certain security measures by airlines and airports, such as the requirement that all passenger bags be screened for explosives. Funding for
airline and airport security under the law is partially provided by a per enplanement ticket tax of up to $5.00 each way or $10.00 per round trip, with authority
granted to the TSA to impose additional fees on the air carriers if necessary to cover additional federal aviation security costs. The security tax is currently $2.50
per enplaned passenger each way and has been imposed since February 18, 2002, the date the TSA began taking responsibility for airport security. Pursuant to its
authority, the TSA may revise the way it assesses this fee, which could result in increased costs for us. We cannot forecast what additional security and safety
requirements may be imposed in the future or the costs or revenue impact that would be associated with complying with such requirements.
Miscellaneous. All air carriers are subject to certain provisions of the Communications Act of 1934, as amended, because of their extensive use of radio and other
communication facilities, and are required to obtain an aeronautical radio license from the Federal Communications Commission (FCC). To the extent we are subject
to FCC requirements, we have taken and will continue to take all necessary steps to comply with those requirements.
Our labor relations are covered under Title II of the Railway Labor Act of 1926, as amended, and are subject to the jurisdiction of the National Mediation Board.
During a period of past fuel scarcity, air carrier access to jet fuel was subject to allocation regulations promulgated by the Department of Energy. We are also subject
to state and local laws and regulations at locations where we operate and the regulations of various local authorities that operate the airports we serve. Our
operations may become subject to additional federal regulatory requirements in the future.
All international service is subject to the regulatory requirements of the appropriate authorities of the other country involved. We currently operate scheduled
international service to Grand Bahamas Island. To the extent we seek to provide additional international air transportation in the future, we will be required to obtain
necessary authority from the DOT and the applicable foreign government.
Environmental Regulations. The Airport Noise and Capacity Act of 1990 (ANCA) generally recognizes the rights of airport operators with noise problems to implement
local noise abatement programs so long as they do not interfere unreasonably with interstate or foreign commerce or the national air transportation system. The
ANCA generally requires FAA approval of local noise restrictions on Stage 3 aircraft. While we have had sufficient scheduling flexibility to accommodate local noise
restrictions imposed to date, our operations could be adversely affected if locally-imposed regulations become more restrictive or widespread.
The Environmental Protection Agency (EPA) regulates operations, including air carrier operations, which affect the quality of air in the United States. We believe the
aircraft in our fleet meet all emission standards issued by the EPA.
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