Alaska Airlines and Horizon Air 2013 Annual Report Download - page 101

REGULATION
GENERAL
The airline industry is highly regulated. The
Department of Transportation (DOT), the Federal
Aviation Administration (FAA) and the
Transportation Security Administration (TSA)
exercise significant regulatory authority over air
carriers.
•DOT: In order to provide passenger and
cargo air transportation in the U.S., a
domestic airline is required to hold a
certificate of public convenience and
necessity issued by the DOT. Subject to
certain individual airport capacity, noise and
other restrictions, this certificate permits an
air carrier to operate between any two points
in the U.S. Certificates do not expire, but
may be revoked for failure to comply with
federal aviation statutes, regulations, orders
or the terms of the certificates. While
airlines are permitted to establish their own
fares without governmental regulation, the
DOT has jurisdiction over the approval of
international codeshare agreements,
marketing alliance agreements between
major domestic carriers, international and
some domestic route authorities, Essential
Air Service market subsidies, carrier liability
for personal or property damage, and certain
airport rates and charges disputes.
International treaties may also contain
restrictions or requirements for flying
outside of the U.S. and impose different
carrier liability limits than those applicable
to domestic flights. The DOT has recently
been active in implementing a variety of
“passenger protection” regulations, covering
subjects such as advertising, passenger
communications, denied boarding
compensation and tarmac delay response.
•FAA: The FAA, through Federal Aviation
Regulations (FARs), generally regulates all
aspects of airline operations, including
establishing personnel, maintenance and
flight operation standards. Domestic airlines
are required to hold a valid air carrier
operating certificate issued by the FAA.
Pursuant to these regulations we have
established, and the FAA has approved, our
operations specifications and a
maintenance program for each type of
aircraft we operate. The maintenance
program provides for the ongoing
maintenance of such aircraft, ranging from
frequent routine inspections to major
overhauls. From time to time the FAA issues
airworthiness directives (ADs) that must be
incorporated into our aircraft maintenance
program and operations. All airlines are
subject to enforcement actions that are
brought by the FAA from time to time for
alleged violations of FARs or ADs. At this
time, we are not aware of any enforcement
proceedings that could either materially
affect our financial position or impact our
authority to operate.
•TSA: Airlines serving the U.S. must operate
a TSA-approved Aircraft Operator Standard
Security Program (AOSSP), and comply with
TSA Security Directives (SDs) and
regulations. Airlines are subject to
enforcement actions that are brought by the
TSA from time to time for alleged violations
of the AOSSP, SDs or security regulations.
We are not aware of any enforcement
proceedings that could either materially
affect our financial position or impact our
authority to operate. Under TSA authority,
we are also required to collect a
September 11 Security Fee of $2.50 per
enplanement from passengers and remit
that sum to the government to fund aviation
security measures. Carriers also pay the
TSA a security infrastructure fee to cover
passenger and property screening costs.
These security infrastructure fees amounted
to $13 million each year in 2013, 2012 and
2011. Starting July 1, 2014, the TSA
security fee will increase to $5.60 per one-
way trip. In addition, starting October 1,
2014, the security infrastructure fees will no
longer be in effect.
The Department of Justice and DOT have
jurisdiction over airline antitrust matters. The
U.S. Postal Service has jurisdiction over certain
aspects of the transportation of mail and related
services. Labor relations in the air transportation
industry are regulated under the Railway Labor
Act. To the extent we continue to fly to foreign
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ŠForm 10-K