Alaska Airlines and Horizon Air 2009 Annual Report Download - page 114

the premiums charged by aviation insurers for
this coverage will be substantially higher than
the premiums currently charged by the
government and the coverage will be much more
limited, including smaller aggregate limits and
shorter cancellation periods. Significant
increases in insurance premiums would
adversely affect our business, financial condition
and results of operations.
SAFETY, COMPLIANCE AND OPERATIONAL
EXCELLENCE
Our reputation and financial results could be
harmed in the event of an airline accident or
incident.
An accident or incident involving one of our
aircraft could involve a significant loss of life and
result in a loss of confidence in our airlines by
the flying public. We could experience significant
potential claims from injured passengers and
surviving relatives, as well as costs for the repair
or replacement of a damaged aircraft and its
consequential temporary or permanent loss from
service. We maintain liability insurance in
amounts and of the type generally consistent
with industry practice. However, the amount of
such coverage may not be adequate to fully
cover all claims and we may be forced to bear
substantial losses from an accident. Substantial
claims resulting from an accident in excess of
our related insurance coverage would harm our
business and financial results. Moreover, any
aircraft accident or incident, even if fully insured
and even if it does not involve one of our
airlines, could cause a public perception that our
airlines or the equipment they fly is less safe or
reliable than other transportation alternatives,
which would harm our business.
Changes in government regulation imposing
additional requirements and restrictions on our
operations or on the airports at which we
operate could increase our operating costs and
result in service delays and disruptions.
Airlines are subject to extensive regulatory and
legal requirements, both domestically and
internationally, that involve significant
compliance costs. In the last several years,
Congress has passed laws, and the U.S. DOT,
the TSA and the FAA have issued regulations
that have required significant expenditures
relating to the maintenance and operation of
airlines. Similarly, many aspects of an airline’s
operations are subject to increasingly stringent
federal, state and local laws protecting the
environment.
Because of significantly higher security and other
costs incurred by airports since September 11,
2001, many airports have increased their rates
and charges to air carriers. Additional laws,
regulations, taxes, and airport rates and charges
have been proposed from time to time that could
significantly increase the cost of airline
operations or reduce the demand for air travel.
Although lawmakers may impose these
additional fees and view them as “pass-through”
costs, we believe that a higher total ticket price
will influence consumer purchase and travel
decisions and may result in an overall decline in
passenger traffic, which would harm our
business.
If we do not maintain the privacy and security
of customer-related information, we could
damage our reputation, incur substantial
additional costs and become subject to
litigation.
We receive, retain, and transmit certain personal
information about our customers. In addition, our
online operations at alaskaair.com depend on
the secure transmission of confidential
information over public networks, including credit
card information. A compromise of our security
systems or those of other business partners that
results in our customers’ personal information
being obtained by unauthorized persons could
adversely affect our reputation with our
customers and others, as well as our operations,
results of operations, financial position and
liquidity, and could result in litigation against us
or the imposition of penalties. In addition, a
security breach could require that we expend
significant additional resources related to the
security of information systems and could result
in a disruption of our operations, particularly our
online sales operations.
Additionally, the use of individually identifiable
data by our business and our business partners
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