United Airlines 2015 Annual Report Download - page 13

Terrorist attacks or international hostilities, or the fear of terrorist attacks or hostilities, even if not made directly on the airline industry, could negatively
affect the Company and the airline industry.
The terrorist attacks on September 11, 2001 involving commercial aircraft severely and adversely impacted the Company’s financial condition and results of
operations, as well as the prospects for the airline industry. Among the effects experienced from the September 11, 2001 terrorist attacks were substantial
flight disruption costs caused by the FAA-imposed temporary grounding of the U.S. airline industry’s fleet, significantly increased security costs and
associated passenger inconvenience, increased insurance costs, substantially higher ticket refunds and significantly decreased traffic and passenger revenue.
Additional terrorist attacks, even if not made directly on the airline industry, or the fear of or the precautions taken in anticipation of such attacks (including
elevated national threat warnings or selective cancellation or redirection of flights) could materially and adversely affect the Company and the airline
industry. Wars and other international hostilities could also have a material adverse impact on the Company’s financial condition, liquidity and results of
operations. The Company’s financial resources may not be sufficient to absorb the adverse effects of any future terrorist attacks or other international
hostilities.
A significant data breach or the Company’s inability to comply with legislative or regulatory standards may adversely affect the Company’s business.
The Company is subject to increasing legislative, regulatory and customer focus on privacy issues and data security. A number of the Company’s commercial
partners, including credit card companies, have imposed data security standards that the Company must meet and these standards continue to evolve. The
Company will continue its efforts to meet new and increasing privacy and security standards; however, it is possible that certain new standards may be
difficult to meet and could increase the Company’s costs. Additionally, any compromise of the Company’s technology systems could result in the loss,
disclosure, misappropriation of or access to customers’, employees’ or business partners’ information. Any such loss, disclosure, misappropriation or access
could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information. Any significant data
breach or the Company’s failure to comply with applicable U.S. and foreign privacy or data security regulations or security standards imposed by the
Company’s commercial partners may adversely affect the Company’s reputation, business, results of operations and financial condition.
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, revenue management systems, accounting 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, maintain secure information and deliver important flight and
schedule information, as well as process critical financial transactions. These systems could suffer substantial or repeated disruptions due to various events,
some of which are beyond the Company’s control, including natural disasters, power failures, terrorist attacks, equipment or software failures, computer
viruses or cyber security attacks. Substantial or repeated systems failures or disruptions, including failures or disruptions related to the Company’s complex
integration of 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, result in increased costs, lost revenue and
the loss or compromise of important data, and may adversely affect the Company’s business, results of operations and financial condition.
Current or future litigation and regulatory actions could have a material adverse impact on the Company.
From time to time, we are subject to litigation and other legal and regulatory proceedings relating to our business or investigations or other actions by
governmental agencies, including as described in Part I, Item 3 “Legal
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Source: United Continental Holdings, Inc., 10-K, February 18, 2016 Powered by Morningstar® Document Research℠
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