Delta Airlines 2013 Annual Report Download - page 14

Airport Access
Operations at four major domestic airports and certain foreign airports served by us are regulated by governmental entities through allocations
of “slots” or similar regulatory mechanisms which limit the rights of carriers to conduct operations at those airports. Each slot represents the
authorization to land at or take off from the particular airport during a specified time period.
In the U.S., the FAA currently regulates the allocation of slots, slot exemptions, operating authorizations, or similar capacity allocation
mechanisms at Reagan National in Washington, D.C. and LaGuardia, John F. Kennedy International Airport and Newark in the New York City
area. Our operations at these airports generally require the allocation of slots or analogous regulatory authorizations. Similarly, our operations at
Tokyo's Narita and Haneda Airports, London's Heathrow airport and other international airports are regulated by local slot coordinators pursuant
to the International Air Transport Association's Worldwide Scheduling Guidelines and applicable local law. We currently have sufficient slots or
analogous authorizations to operate our existing flights, and we have generally been able to obtain the rights to expand our operations and to
change our schedules. There is no assurance, however, that we will be able to do so in the future because, among other reasons, such allocations
are subject to changes in governmental policies.
Environmental Matters
Emissions . The U.S. Environmental Protection Agency (the “EPA”) is authorized to regulate aircraft emissions and has historically
implemented emissions control standards adopted by the International Civil Aviation Organization (“ICAO”). Our aircraft comply with existing
EPA standards as applicable by engine design date. The ICAO has adopted two additional aircraft engine emissions standards, the first of which
is applicable to engines certified after December 31, 2007, and the second of which is applicable to engines certified after December 31, 2013. In
June 2012, the EPA published a final rulemaking for new emission standards for oxides of nitrogen (NOx), adopting ICAO's additional
standards. Included in the rule are two new tiers of more stringent emission standards for NOx. These standards, referred to as the Tier 6
standards, become effective for newly-manufactured aircraft engines beginning in 2013.
Concern about aviation environmental issues, including climate change and greenhouse gases, has led to taxes on our operations in the United
Kingdom and in Germany, both of which have levied taxes directly on our customers. We may face additional regulation of aircraft emissions in
the United States and abroad and become subject to further taxes, charges or additional requirements to obtain permits or purchase allowances or
emission credits for greenhouse gas emissions in various jurisdictions. This could result in taxation or permitting requirements from multiple
jurisdictions for the same operations.
Ongoing bilateral discussions between the United States and other nations may lead to international treaties
or other actions focusing on reducing greenhouse gas emissions from aviation. In addition, at the 38
th
ICAO Assembly that concluded October 4,
2013 in Montreal, the Assembly adopted a climate change resolution committing ICAO to develop a global market-
based measure to be finalized
at the 2016 ICAO Assembly which would enable the airline industry to achieve carbon-neutral growth from 2020.
The European Union has required its member states to implement regulations including aviation in its Emissions Trading Scheme (“ETS”).
Under these regulations, any airline with flights originating or landing in the European Union is subject to the ETS and, beginning in 2012, was
required to purchase emissions allowances if the airline exceeds the number of free allowances allocated to it under the ETS. At the end of
November 2012, the United States government enacted legislation exempting U.S. airlines from the ETS. In April 2013, the European
Parliament deferred enforcement until April 2014 of the ETS with respect to flights operated to and from non-EU destinations; however, all
intra-EU flights on any carrier (based in the EU or not) had to comply with the requirements of the ETS. The European Commission has
proposed new legislation that would extend the ETS beyond intra-EU flights to include the portion of flights to and from the EU while in EU
airspace for those countries whose international revenue ton kilometers exceeds a 1% de minimis threshold. This legislation faces opposition
from the United States and some EU member countries.
Cap and trade restrictions have also been proposed in the United States. In addition, other legislative or regulatory action, including by the
EPA, to regulate greenhouse gas emissions is possible. In particular, the EPA has found that greenhouse gases threaten the public health and
welfare, which could result in regulation of greenhouse gas emissions from aircraft. In the event that legislation or regulation is enacted in the
U.S. or in the event similar legislation or regulation is enacted in jurisdictions other than the European Union where we operate or where we
may
operate in the future, it could result in significant costs for us and the airline industry. In addition to direct costs, such regulation may have a
greater effect on the airline industry through increases in fuel costs that could result from fuel suppliers passing on increased costs that they incur
under such a system. We are monitoring and evaluating the potential impact of such legislative and regulatory developments.
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