US Airways 2008 Annual Report Download - page 12

Table of Contents
Item 1A. "Risk Factors — Risk Factors Relating to the Company and Industry Related Risks — We are subject to many forms of
environmental regulation and may incur substantial costs as a result."
Our airline subsidiaries are obligated to collect a federal excise tax, commonly referred to as the "ticket tax," on domestic and
international air transportation. Our airline subsidiaries collect the ticket tax, along with certain other U.S. and foreign taxes and user fees
on air transportation, and pass along the collected amounts to the appropriate governmental agencies. Although these taxes are not our
operating expenses, they represent an additional cost to our customers. There are a number of efforts in Congress to raise different
portions of the various taxes imposed on airlines and their passengers.
The Aviation and Transportation Security Act (the "Aviation Security Act") was enacted in November 2001. Under the Aviation
Security Act, substantially all aspects of civil aviation security screening were federalized, and a new Transportation Security
Administration (the "TSA") under the DOT was created. The TSA was then transferred to the Department of Homeland Security pursuant
to the Homeland Security Act of 2002. The Aviation Security Act, among other matters, mandates improved flight deck security; carriage
at no charge of federal air marshals; enhanced security screening of passengers, baggage, cargo, mail, employees and vendors; enhanced
security training; fingerprint-based background checks of all employees and vendor employees with access to secure areas of airports
pursuant to regulations issued in connection with the Aviation Security Act; and the provision of certain passenger data to U.S. Customs
and Border Protection.
Funding for the TSA is provided by a combination of air-carrier fees, passenger fees and taxpayer monies. A "passenger security
fee," which is collected by air carriers from their passengers, is currently set at a rate of $2.50 per flight segment but not more than $10
per round trip. An air-carrier fee, or Aviation Security Infrastructure Fee ("ASIF"), has also been imposed with an annual cap equivalent
to the amount that an individual air carrier paid in calendar year 2000 for the screening of passengers and property. TSA may lift this cap
at any time and set a new higher fee for air carriers.
In 2008, we incurred expenses of $53 million for the ASIF, including amounts paid by US Airways Group's wholly owned regional
subsidiaries and amounts attributable to regional carriers. Implementation of the requirements of the Aviation Security Act have resulted
and will continue to result in increased costs for us and our passengers and has and will likely continue to result in service disruptions and
delays. As a result of competitive pressure, US Airways and other airlines may be unable to recover all of these additional security costs
from passengers through increased fares. In addition, we cannot forecast what new security and safety requirements may be imposed in
the future or the costs or financial impact of complying with any such requirements.
Most major U.S. airports impose a passenger facility charge. The ability of airlines to contest increases in this charge is restricted by
federal legislation, DOT regulations and judicial decisions. With certain exceptions, air carriers pass these charges on to passengers.
However, our ability to pass through passenger facility charges to our customers is subject to various factors, including market conditions
and competitive factors. The current cap on the passenger facility charge is $4.50 per passenger.
At John F. Kennedy International, LaGuardia, Newark Liberty International and Reagan National Airports, which are designated
"High Density Airports" by the FAA, there are restrictions that limit the number of departure and arrival slots available to air carriers
during peak hours. In April 2000, legislation was enacted that eliminated slot restrictions in January 2007 at LaGuardia and Kennedy.
The FAA proposed a comprehensive final rule for LaGuardia in August 2006. The proposed rule would require a minimum number of
seats on certain operations to/from LaGuardia. Failure to comply with the minimum seat requirement would lead to the withdrawal of
operating authority until compliance is achieved. The proposed rule also introduces a finite lifespan for "operating authorizations" of no
more than ten years. The FAA intends to seek Congressional approval for the introduction of market based mechanisms for allocating
expiring operating authorizations. We filed extensive comments with the FAA in December 2006 detailing the numerous concerns we
have with the proposed rule. Other than making some technical corrections to the current operating restrictions at LaGuardia, no other
action concerning the level of operations at LaGuardia was taken by the federal government in 2007. The DOT and FAA convened an
Aviation Rulemaking Committee ("ARC") to address congestion and delays in the New York region.
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