American Airlines 2004 Annual Report Download - page 10

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Environmental Matters The Company is subject to various laws and government regulations concerning
environmental matters and employee safety and health in the U.S. and other countries. U.S. federal laws that
have a particular impact on the Company include the Airport Noise and Capacity Act of 1990 (ANCA), the Clean
Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, and the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or the Superfund Act).
Certain operations of the Company are also subject to the oversight of the Occupational Safety and Health
Administration (OSHA) concerning employee safety and health matters. The U.S. Environmental Protection
Agency (EPA), OSHA, and other federal agencies have been authorized to promulgate regulations that have an
impact on the Company's operations. In addition to these federal activities, various states have been delegated
certain authorities under the aforementioned federal statutes. Many state and local governments have adopted
environmental and employee safety and health laws and regulations, some of which are similar to or stricter than
federal requirements.
The ANCA recognizes the rights of airport operators with noise problems to implement local noise abatement
programs so long as they do not interfere unreasonably with interstate or foreign commerce or the national air
transportation system. Authorities in several cities have promulgated aircraft noise reduction programs, including
the imposition of nighttime curfews. The ANCA generally requires FAA approval of local noise restrictions on
aircraft. While the Company has had sufficient scheduling flexibility to accommodate local noise restrictions
imposed to date, the Company’s operations could be adversely affected if locally-imposed regulations become
more restrictive or widespread.
American has been named as a potentially responsible party (PRP) for contamination at the former Operating
Industries, Inc. Landfill in Monterrey Park, CA (OII). American's alleged volumetric contributions at OII are small
when compared with those of other PRPs. American is participating with a number of other PRPs in a Steering
Committee that has conducted extensive negotiations with the EPA and state officials in recent years. Members
of the Steering Committee, including American, have entered into a series of partial consent decrees with EPA
and the State of California which address specific aspects of investigation and cleanup at OII. To date American
has paid approximately $1.25 million toward its share of cleanup costs under those consent decrees. Together
with a number of other small-volume PRPs at OII, American seeks a settlement that will enable it to resolve all of
its remaining past and present liabilities at OII in exchange for a one-time, lump-sum settlement payment. The
amount of American's potential contribution towards such a settlement is not yet known but American expects that
its payments will be immaterial.
American also has been named as a PRP for contamination at the Double Eagle Superfund Site in Oklahoma City,
OK (Double Eagle). American's alleged volumetric contributions are small when compared with those of other
PRPs. American is participating with a number of other PRPs at Double Eagle in a Joint Defense Group that is
actively conducting settlement negotiations with the EPA and state officials. The group is seeking a settlement on
behalf of its members that will enable American to resolve its past and present liabilities at Double Eagle in
exchange for a one-time, lump-sum settlement payment. American expects that its payment will be immaterial.
American, along with most other tenants at the San Francisco International Airport (SFIA), has been ordered by the
California Regional Water Quality Control Board to engage in various studies of potential environmental
contamination at the airport and to undertake remedial measures, if necessary. In 1997, the SFIA pursued a cost
recovery action in the U.S. District Court of Northern California against certain airport tenants to recover past and
future costs associated with historic airport contamination. American entered an initial settlement for accrued past
costs in 2000 for $850,000. In 2004, American resolved its liability for all remaining past and future costs. Based
on SFIA’s cost projections, the value of American’s second settlement is approximately $4 million payable over a
30 year period.
Miami-Dade County (the County) is currently investigating and remediating various environmental conditions at the
Miami International Airport (MIA) and funding the remediation costs through landing fees and various cost
recovery methods. American and AMR Eagle have been named PRPs for the contamination at MIA. See Item 3,
Legal Proceedings, for additional information.