Delta Airlines 2012 Annual Report Download - page 24

Other laws, regulations, taxes and airport rates and charges have also been imposed from time to time that significantly increase the cost of airline
operations or reduce revenues. The industry is heavily taxed. For example, the Aviation and Transportation Security Act mandates the federalization
of certain airport security procedures and imposes security requirements on airports and airlines, most of which are funded by a per ticket tax on
passengers and a tax on airlines. The federal government has on several occasions proposed a significant increase in the per ticket tax and has
recently proposed additional departure fees. A ticket tax increase or additional fees, if implemented, could negatively impact our results of
operations.
Proposals to address congestion issues at certain airports or in certain airspace, particularly in the Northeast United States, have included concepts
such as “congestion-based” landing fees, “slot auctions” or other alternatives that could impose a significant cost on the airlines operating in those
airports or airspace and impact the ability of those airlines to respond to competitive actions by other airlines. In addition, the failure of the federal
government to upgrade the U.S. air traffic control system has resulted in delays and disruptions of air traffic during peak travel periods in certain
congested markets. The failure to improve the air traffic control system could lead to increased delays and inefficiencies in flight operations as
demand for U.S. air travel increases, having a material adverse effect on our operations. Failure to update the air traffic control system in a timely
manner, and the substantial funding requirements of an updated system that may be imposed on air carriers, may have an adverse impact on our
financial condition and results of operations.
Events related to extreme weather delays caused the Department of Transportation to promulgate regulations imposing potentially severe financial
penalties upon airlines that have flights experiencing extended tarmac delays. These regulations could have a negative impact on our operations in
certain circumstances.
Future regulatory action concerning climate change and aircraft emissions could have a significant effect on the airline industry. For example, the
European Commission has adopted an emissions trading scheme applicable to all flights operating in the European Union, including flights to and
from the United States. If fully implemented, we expect that this system would impose additional costs on our operations in the European Union.
Other laws or regulations such as this emissions trading scheme or other U.S. or foreign governmental actions may adversely affect our operations
and financial results, either through direct costs in our operations or through increases in costs for jet fuel that could result from jet fuel suppliers
passing on increased costs that they incur under such a system.
We and other U.S. carriers are subject to domestic and foreign laws regarding privacy of passenger and employee data that are not consistent in all
countries in which we operate. In addition to the heightened level of concern regarding privacy of passenger data in the United States, certain
European government agencies are initiating inquiries into airline privacy practices. Compliance with these regulatory regimes is expected to result in
additional operating costs and could impact our operations and any future expansion. In addition, a security breach in which passenger or employee
data is exposed could result in disruption to our operations, damage to our reputation and significant costs.
Terrorist attacks or international hostilities may adversely affect our business, financial condition and operating results.
The terrorist attacks of September 11, 2001 caused fundamental and permanent changes in the airline industry, including substantial revenue
declines and cost increases, which resulted in industry-wide liquidity issues. Potential terrorist attacks or security breaches or fear of such events,
even if not made directly on the airline industry, could negatively affect us and the airline industry. The potential negative effects include increased
security (including as a result of our global operations), insurance and other costs and lost revenue from increased ticket refunds and decreased ticket
sales. Our financial resources might not be sufficient to absorb the adverse effects of any further terrorist attacks or other international hostilities
involving the United States.
The rapid spread of contagious illnesses can have a material adverse effect on our business and results of operations.
The rapid spread of a contagious illness can have a material adverse effect on the demand for worldwide air travel and therefore have a material
adverse effect on our business and results of operations. Moreover, our operations could be negatively affected if employees are quarantined as the
result of exposure to a contagious illness. Similarly, travel restrictions or operational problems resulting from the rapid spread of contagious illnesses
in any part of the world in which we operate may have a materially adverse impact on our business and results of operations.
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