Delta Airlines 2013 Annual Report Download - page 13

Regulatory Matters
The Department of Transportation (“DOT”) and the Federal Aviation Administration (the “FAA”) exercise regulatory authority over air
transportation in the U.S. The DOT has authority to issue certificates of public convenience and necessity required for airlines to provide
domestic air transportation. An air carrier that the DOT finds fit to operate is given authority to operate domestic and international air
transportation (including the carriage of passengers and cargo). Except for constraints imposed by regulations regarding “Essential Air Services,”
which are applicable to certain small communities, airlines may terminate service to a city without restriction.
The DOT has jurisdiction over certain economic and consumer protection matters, such as unfair or deceptive practices and methods of
competition, advertising, denied boarding compensation, baggage liability and disabled passenger transportation. The DOT also has authority to
review certain joint venture agreements between major carriers and engages in regulation of economic matters such as slot transactions. The
FAA has primary responsibility for matters relating to the safety of air carrier flight operations, including airline operating certificates, control of
navigable air space, flight personnel, aircraft certification and maintenance and other matters affecting air safety.
Authority to operate international routes and international codesharing arrangements is regulated by the DOT and by the governments of the
foreign countries involved. International certificate authorities are also subject to the approval of the U.S. President for conformance with
national defense and foreign policy objectives.
The Transportation Security Administration and the U.S. Customs and Border Protection, each a division of the Department of Homeland
Security, are responsible for certain civil aviation security matters, including passenger and baggage screening at U.S. airports and international
passenger prescreening prior to entry into or departure from the U.S.
Airlines are also subject to various other federal, state, local and foreign laws and regulations. For example, the U.S. Department of Justice
has jurisdiction over airline competition matters. The U.S. Postal Service has authority over certain aspects of the transportation of mail. Labor
relations in the airline industry, as discussed below, are generally governed by the Railway Labor Act. Environmental matters are regulated by
various federal, state, local and foreign governmental entities. Privacy of passenger and employee data is regulated by domestic and foreign laws
and regulations.
Fares and Rates
Airlines set ticket prices in all domestic and most international city pairs with minimal governmental regulation, and the industry is
characterized by significant price competition. Certain international fares and rates are subject to the jurisdiction of the DOT and the
governments of the foreign countries involved. Many of our tickets are sold by travel agents, and fares are subject to commissions, overrides and
discounts paid to travel agents, brokers and wholesalers.
Route Authority
Our flight operations are authorized by certificates of public convenience and necessity and also by exemptions and limited-entry frequency
awards issued by the DOT. The requisite approvals of other governments for international operations are controlled by bilateral agreements (and
a multilateral agreement in the case of the U.S. and the European Union) with, or permits or approvals issued by, foreign countries. Because
international air transportation is governed by bilateral or other agreements between the U.S. and the foreign country or countries involved,
changes in U.S. or foreign government aviation policies could result in the alteration or termination of such agreements, diminish the value of
our international route authorities or otherwise affect our international operations. Bilateral agreements between the U.S. and various foreign
countries served by us are subject to renegotiation from time to time. The U.S. government has negotiated “open skies” agreements with many
countries, which allow unrestricted access between the U.S. and the foreign markets. These agreements include separate agreements with the
European Union and Japan.
Certain of our international route authorities are subject to periodic renewal requirements. We request 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 this practice will continue in general or with respect to a specific renewal. Dormant route authorities may not be
renewed in some cases, especially where another U.S. carrier indicates a willingness to provide service.
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