Delta Airlines 2014 Annual Report Download - page 13

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, JFK 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
U.S. 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 U.S. 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. The ETS has been amended to apply
only to flights within the European Economic Area (“EEA”) from 2013 through 2016. As a result, we operate a limited number of flights that will be
subject to the ETS through 2016. After 2016, the ETS would apply to all flights originating or landing in the European Union.
Cap and trade restrictions have also been proposed in the U.S. 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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