Southwest Airlines 2005 Annual Report Download - page 21

certificates, in whole or in part, for intentional failure to gers, baggage, cargo, mail, employees, and vendors,
comply with certain provisions of the enhanced training and qualifications of security screen-
U.S. Transportation Code, or any order or regulation ing personnel, additional provision of passenger data to
issued thereunder or any term of such certificate; pro- U.S. Customs, and enhanced background checks. Be-
vided that, with respect to revocation, the certificate ginning February 1, 2002, a $2.50 per enplanement
holder has first been advised of the alleged violation and security fee is imposed on passengers (maximum of
fails to comply after being given a reasonable time to do $5.00 per one-way trip). This fee was suspended by
so. Congress from June 1 through September 30, 2003.
Pursuant to authority granted to the TSA to impose
DOT prescribes uniform disclosure standards re- additional fees on air carriers if necessary to cover
garding terms and conditions of carriage and prescribes additional federal aviation security costs, the TSA has
that terms incorporated into the Contract of Carriage by imposed an annual Security Infrastructure Fee, which
reference are not binding upon passengers unless notice approximated $26 million for Southwest in 2004 and
is given in accordance with its regulations. $50 million in 2005. Like the FAA, the TSA may
Safety. The Company and its third-party mainte- impose and collect fines for violations of its regulations.
nance providers are subject to the jurisdiction of the Enhanced security measures have had, and will
Federal Aviation Administration (""FAA'') with respect continue to have, a significant impact on the airport
to its aircraft maintenance and operations, including experience for passengers. While these security require-
equipment, ground facilities, dispatch, communications, ments have not impacted aircraft utilization, they have
flight training personnel, and other matters affecting air impacted our business. The Company has invested
safety. To ensure compliance with its regulations, the significantly in facilities, equipment, and technology to
FAA requires airlines to obtain operating, airworthiness, process Customers efficiently and restore the airport
and other certificates, which are subject to suspension or experience. The Company has implemented its Auto-
revocation for cause. The Company has obtained such mated Boarding Passes and RAPID CHECK-IN self
certificates. The FAA, acting through its own powers or service kiosks in all airports it serves to reduce the
through the appropriate U.S. Attorney, also has the number of lines in which a Customer must wait. The
power to bring proceedings for the imposition and Company has installed gate readers at all of its airports
collection of fines for violation of the Federal Air to improve the boarding reconciliation process, has
Regulations. introduced baggage checkin through RAPID CHECK-
The Company is subject to various other federal, IN kiosks at certain airport locations, and has also
state, and local laws and regulations relating to occupa- introduced Internet checkin and transfer boarding
tional safety and health, including Occupational Safety passes at the time of checkin.
and Health Administration (OSHA) and Food and
Environmental. Certain airports, including
Drug Administration (FDA) regulations.
San Diego and Orange County, have established airport
Security. In November 2001, President Bush restrictions to limit noise, including restrictions on
signed into law the Aviation and Transportation Secur- aircraft types to be used, and limits on the number of
ity Act, or the Aviation Security Act. This law federal- hourly or daily operations or the time of such opera-
ized substantially all aspects of civil aviation security, tions. In some instances, these restrictions have caused
creating the Transportation Security Administration curtailments in service or increases in operating costs
(""TSA''), which is part of the Department of Home- and such restrictions could limit the ability of Southwest
land Security. The Aviation Security Act generally to expand its operations at the affected airports. Local
provides for enhanced aviation security measures. Under authorities at other airports may consider adopting
the Aviation Security Act, substantially all security similar noise regulations, but such regulations are sub-
screeners at airports are federal employees and signifi- ject to the provisions of the Airport Noise and Capacity
cant other elements of airline and airport security are Act of 1990 and regulations promulgated thereunder.
overseen and performed by federal employees, including
federal security managers, federal law enforcement of- Operations at John Wayne Airport, Orange
ficers, and federal air marshals. The law mandates, County, California, are governed by the Airport's
among other things, improved flight deck security, Phase 2 Commercial Airline Access Plan and Regula-
deployment of federal air marshals onboard flights, tion (the ""Plan''). Pursuant to the Plan, each airline is
improved airport perimeter access security, airline crew allocated total annual seat capacity to be operated at the
security training, enhanced security screening of passen- airport, subject to renewal/reallocation on an annual
2