JetBlue Airlines 2006 Annual Report Download - page 22

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Communications Commission, or FCC, and rights to all the patents and intellectual property used for
live in-seat satellite television, XM Satellite Radio service, wireless aircraft data link service, cabin
surveillance systems and Internet services. LiveTV’s major competitors include Rockwell Collins,
Thales Avionics Aircell and Panasonic Avionics. Except for Panasonic, none of these competitors is
currently providing in-seat live television.
LiveTV has contracts with six other domestic and international airlines for the sale of certain
hardware and installation, programming and maintenance of its live in-seat satellite television as well
as XM Satellite Radio Service and certain other products and services. LiveTV continues to pursue
additional customers.
Government Regulation
General. We are subject to regulation by the DOT, the FAA, the TSA and other governmental
agencies. The DOT primarily regulates economic issues affecting air service, such as certification and
fitness, insurance, consumer protection and competitive practices. The DOT has the authority to
investigate and institute proceedings to enforce its economic regulations and may assess civil penalties,
revoke operating authority and seek criminal sanctions. In February 2000, the DOT granted us a
certificate of public convenience and necessity authorizing us to engage in air transportation within the
United States, its territories and possessions.
The FAA primarily regulates flight operations and, in particular, matters affecting air safety, such
as airworthiness requirements for aircraft, the licensing of pilots, mechanics and dispatchers, and the
certification of flight attendants. The civil aviation security functions of the FAA were transferred to
the 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.
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. Should any of these
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.
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