United Airlines 2012 Annual Report Download - page 18

Table of Contents
significantly because of capital improvements at such airports that the Company may be required to fund, directly or indirectly. In some circumstances, such
costs could be imposed by the relevant airport authority without the Company’s approval and may have a material adverse effect on the Company’s financial
condition.
The ability of carriers to operate flights on international routes between airports in the U.S. and other countries may be subject to change. Applicable
arrangements between the United States and foreign governments may be amended from time to time, government policies with respect to airport operations
may be revised, and the availability of appropriate slots or facilities may change. The Company currently operates a number of flights on international routes
under government arrangements, regulations or policies that designate the number of carriers permitted to operate on such routes, the capacity of the carriers
providing services on such routes, the airports at which carriers may operate international flights, or the number of carriers allowed access to particular
airports. Any further limitations, additions or modifications to such arrangements, regulations or policies could have a material adverse effect on the
Company’s financial position and results of operations. Additionally, if an open skies policy were to be adopted for any of the Company’s international
routes, such an event could have a material adverse impact on the Company’s financial position and results of operations and could result in the impairment
of material amounts of related tangible and intangible assets. In addition, competition from revenue-sharing joint ventures and other alliance arrangements by
and among other airlines could impair the value of the Company’s business and assets on the open skies routes. The Company’s plans to enter into or expand
U.S. antitrust immunized alliances and joint ventures on various international routes are subject to receipt of approvals from applicable U.S. federal
authorities and obtaining other applicable foreign government clearances or satisfying the necessary applicable regulatory requirements. There can be no
assurance that such approvals and clearances will be granted or will continue in effect upon further regulatory review or that changes in regulatory
requirements or standards can be satisfied.
Many aspects of the Company’s operations are also subject to increasingly stringent federal, state, local and international laws protecting the environment.
Future environmental regulatory developments, such as climate change regulations in the United States and abroad could adversely affect operations and
increase operating costs in the airline industry. There are certain climate change laws and regulations that have already gone into effect and that apply to the
Company, including the EU ETS (which is subject to international dispute), the State of California’s cap and trade regulations, environmental taxes for
certain international flights, limited greenhouse gas reporting requirements and land-use planning laws which could apply to airports and could affect airlines
in certain circumstances. In addition, there is the potential for additional regulatory actions in regard to the emission of greenhouse gases by the aviation
industry. The precise nature of future requirements and their applicability to the Company are difficult to predict, but the financial impact to the Company
and the aviation industry would likely be adverse and could be significant.
See Item 1, Business - Industry Regulation above, for further information on government regulation impacting the Company.
The Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of the
technology or these systems could materially harm its business.
The Company depends on automated systems and technology to operate its business, including computerized airline reservation systems, flight operations
systems, telecommunication systems and commercial websites, including www.united.com. United’s website and other automated systems must be able to
accommodate a high volume of traffic and deliver important flight and schedule information, as well as process critical financial transactions. These systems
could suffer substantial or repeated disruptions due to events including natural disasters, power failures, terrorist attacks, equipment or software failures,
computer viruses or cyber security attacks. Substantial or repeated website, reservation systems or telecommunication systems failures or disruptions,
including failures or disruptions related to the Company’s integration of technology systems, could reduce the attractiveness of the Company’s services versus
those of its competitors, materially impair its ability to market its services and operate its flights, result in the unauthorized release of confidential or otherwise
protected information, and result in increased costs, lost revenue and the loss or compromise of important data.
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