JetBlue Airlines 2004 Annual Report Download - page 23

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TSA under the Aviation Security Act. The FAA requires each airline to obtain an operating certificate
authorizing the airline to operate at specific airports using specified equipment. We have and maintain
FAA certificates of airworthiness for all of our aircraft and have the necessary FAA authority to fly to
all of the cities that we currently serve. We are in the process of obtaining the necessary certification
from the Brazilian aviation regulatory authority for the new Embraer E190 as well as validation from
the FAA as to the aircraft’s airworthiness.
Like all U.S. certified carriers, we cannot fly to new destinations without the prior authorization of
the FAA. The FAA has the authority to modify, suspend temporarily or revoke permanently our
authority to provide air transportation or that of our licensed personnel, after providing notice and a
hearing, for failure to comply with FAA regulations. The FAA can assess civil penalties for such failures
or institute proceedings for the imposition and collection of monetary fines for the violation of certain
FAA regulations. The FAA can revoke our authority to provide air transportation on an emergency
basis, without providing notice and a hearing, where significant safety issues are involved. The FAA
monitors our compliance with maintenance, flight operations and safety regulations, maintains onsite
representatives and performs frequent spot inspections of our aircraft, employees and records.
The FAA also has the authority to issue maintenance directives and other mandatory orders
relating to, among other things, inspection of aircraft and engines, fire retardant and smoke detection
devices, increased security precautions, collision and windshear avoidance systems, noise abatement and
the mandatory removal and replacement of aircraft parts that have failed or may fail in the future.
We believe that we are operating in material compliance with DOT, FAA and TSA regulations and
hold all necessary operating and airworthiness authorizations and certificates. Upon successful
completion of our fourth DOT financial, managerial fitness and safety compliance review in
December 2004, all restrictions on the number of aircraft we are allowed to operate were removed. We
are still regulated by the DOT and FAA and should any of their authorizations or certificates be
modified, suspended or revoked, our business could be materially adversely affected.
The TSA operates under the Department of Homeland Security and is responsible for all civil
aviation security, including passenger and baggage screening, cargo security measures, airport security,
assessment and distribution of intelligence, and security research and development. The TSA also has
law enforcement powers and the authority to issue regulations, including in cases of national
emergency, without a notice or comment period.
Environmental. We are subject to various federal, state and local laws relating to the protection of
the environment, including the discharge or disposal of materials and chemicals and the regulation of
aircraft noise, which are administered by numerous state and federal agencies. Prior to our
governmental certification, our projected operations, particularly at JFK, were studied in an FAA
environmental assessment. The assessment was conducted for the FAA as part of the issuance of our
operating and airworthiness authorizations and certificates, as well as for the DOT in conjunction with
the granting of our slot exemption request at JFK. The finding of the assessment was that the
environmental impact of our proposed operations would be de minimis.
The Airport Noise and Capacity Act of 1990 recognizes the right of airport operators with special
noise problems to implement local noise abatement procedures as long as those procedures do not
interfere unreasonably with the interstate and foreign commerce of the national air transportation
system. Certain airports, including San Diego and Long Beach, have established restrictions to limit
noise, which can include limits on the number of hourly or daily operations and the time of such
operations. These limitations serve to protect the local noise-sensitive communities surrounding the
airport. Our scheduled flights at Long Beach and San Diego are in compliance with the noise curfew
limits, but when we experience irregular operations, on occasion we violate these curfews. We have
agreed to a payment structure with the Long Beach City Prosecutor for any violations, which we pay
quarterly to the Long Beach Public Library Foundation and are based on the number of infractions in
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