US Airways 2010 Annual Report Download - page 11

Table of Contents
termination of these agreements and affect our international operations. We could continue to see significant changes in terms of air
service between the United States and Europe as a result of the implementation of the U.S. and the EU Air Transport Agreement,
generally referred to as the Open Skies Agreement, which took effect in March 2008. The Open Skies Agreement removes bilateral
restrictions on the number of flights between the U.S. and EU. One result of the Open Skies Agreement has been applications before the
DOT for antitrust immunity between various domestic and international airlines. The DOT approved two such transatlantic immunities in
2010 involving other carriers. It is possible that the grant of these immunities could have an impact on our international operations.
Security
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. The TSA may lift this
cap at any time and set a new higher fee for air carriers.
In 2010, we incurred expenses of $50 million for the ASIF, including amounts paid by our wholly owned regional subsidiaries, PSA
and Piedmont, and amounts attributable to our other regional carriers. Implementation of and compliance with the requirements of the
Aviation Security Act have resulted and will continue to result in increased costs for us and our passengers and have resulted 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.
Civil Reserve Air Fleet
We are a participant in the Civil Reserve Air Fleet program, which is a voluntary program administered by the U.S. Air Force Air
Mobility Command. The General Services Administration of the U.S. Government requires that airlines participate in the Civil Reserve
Air Fleet program in order to receive U.S. Government business. We are reimbursed at compensatory rates if aircraft are activated under
the Civil Reserve Air Fleet program or when participating in Department of Defense business.
Environmental
The airline industry is also subject to increasingly stringent federal, state and local laws aimed at protecting the environment. Future
regulatory developments and actions could affect operations and increase operating costs for the airline industry, including our airline
subsidiaries.
Recently, climate change issues and greenhouse gas emissions (including carbon) have attracted international and domestic regulatory
interest that may result in the imposition of additional regulation on airlines. The U.S. Congress is currently considering legislation on
climate change. Although no federal legislation was passed in the last Congress on climate change, several states have adopted or are in
the process of adopting greenhouse gas reporting or cap-and-trade programs.
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