United Airlines 2011 Annual Report Download - page 30

Table of Contents
Environmental Proceedings
In 2001, the California Regional Water Quality Control Board (“CRWQCB”) mandated a field study of the area surrounding Continental’s aircraft
maintenance hangar in Los Angeles. The study was completed in September 2001 and identified aircraft fuel and solvent contamination on and adjacent to this
site. In April 2005, Continental began environmental remediation of aircraft fuel contamination surrounding its aircraft maintenance hangar pursuant to a
workplan submitted to and approved by the CRWQCB and its landlord, the Los Angeles World Airports. Additionally, Continental could be responsible for
environmental remediation costs primarily related to solvent contamination on and near this site.
In 2009, the EU issued a directive to member states to include aviation in its greenhouse gas ETS, which required the Company to begin monitoring emissions
of carbon dioxide effective January 1, 2010. On December 17, 2009, the Air Transportation Association, joined by United, Continental and American
Airlines, filed a lawsuit in the United Kingdom’s High Court of Justice challenging regulations that transpose into UK law the EU ETS as applied to U.S.
carriers as violating international law due to the extra-territorial reach of the scheme and as an improper tax. In June 2010, the case was referred to the Court of
Justice of the European Union (Case C-366/10) and, on December 21, 2011, the CJEU issued an opinion that upheld the EU ETS. More than forty non-EU
countries have gone on record opposing the scheme and based upon this significant international dispute, it is unclear whether or not the inclusion of aviation
in the EU ETS will be sustained. If the scheme continues, it will increase the cost of carriers operating in the EU (by requiring the purchase of carbon
allowances). As of January 1, 2012, the ETS required the Company to ensure that by each compliance date, it has obtained sufficient emission allowances
equal to the amount of carbon dioxide emissions with respect to flights to and from EU member states in the preceding calendar year. Such allowances are to be
surrendered on an annual basis to the relevant government with an initial compliance date of April 30, 2013 for emissions subject to the EU ETS in 2012.
Other Legal Proceedings
The Company is involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies arising
in the ordinary course of business. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable environmental
regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) or
through notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial proceeding and
could potentially involve monetary sanctions. After considering a number of factors, including (but not limited to) the views of legal counsel, the nature of
contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these contingencies will not
materially affect its consolidated financial position or results of operations.
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Not applicable.
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