American Airlines 2008 Annual Report Download - page 19

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16
The results of our operations, demand for air travel, and the manner in which we conduct our business each may
be affected by changes in law and future actions taken by governmental agencies, including:
•
changes in law which affect the services that can be offered by airlines in particular markets and at
particular airports;
•
the granting and timing of certain governmental approvals (including foreign government approvals) needed
for codesharing alliances and other arrangements with other airlines;
•
restrictions on competitive practices (for example court orders, or agency regulations or orders, that would
curtail an airline’s ability to respond to a competitor);
•
the adoption of regulations that impact customer service standards (for example new passenger security
standards, passenger bill of rights);
•
restrictions on airport operations, such as restrictions on the use of takeoff and landing slots at airports or
the auction of slot rights currently or previously held by us; or
•
the adoption of more restrictive locally imposed noise restrictions.
In addition, the air traffic control (ATC) system, which is operated by the FAA, is not successfully managing the
growing demand for U.S. air travel. U.S. airlines carry about 740 million passengers a year and are forecasted to
accommodate a billion passengers annually by 2015. Air-traffic controllers rely on outdated technologies that
routinely overwhelm the system and compel airlines to fly inefficient, indirect routes. We support a common-sense
approach to ATC modernization that would allocate cost to all ATC system users in proportion to the services they
consume. The reauthorization by the U.S. Congress of legislation that funds the FAA, which includes proposals
regarding upgrades to the ATC system, is pending, but it is uncertain when any such legislation will be enacted.
We could be adversely affected by conflicts overseas or terrorist attacks.
Actual or threatened U.S. military involvement in overseas operations has, on occasion, had an adverse impact on
our business, financial position (including access to capital markets) and results of operations, and on the airline
industry in general. The continuing conflicts in Iraq and Afghanistan, or other conflicts or events in the Middle East
or elsewhere, may result in similar adverse impacts.
The Terrorist Attacks had a material adverse impact on us. The occurrence of another terrorist attack (whether
domestic or international and whether against us or another entity) could again have a material adverse impact on
us.
Our international operations could be adversely affected by numerous events, circumstances or
government actions beyond our control.
Our current international activities and prospects could be adversely affected by factors such as reversals or
delays in the opening of foreign markets, exchange controls, currency and political risks, environmental regulation,
taxation and changes in international government regulation of our operations, including the inability to obtain or
retain needed route authorities and/or slots.
For example, the “open skies” air services agreement between the United States and the EU which took effect in
March 2008, provides airlines from the United States and EU member states open access to each other’s
markets, with freedom of pricing and unlimited rights to fly beyond the United States and any airport in the EU
including London’s Heathrow Airport. The agreement has resulted in American facing increased competition in
these markets, including Heathrow, where we have lost market share.
We could be adversely affected by an outbreak of a disease that affects travel behavior.
In 2003, there was an outbreak of Severe Acute Respiratory Syndrome (SARS), which had an adverse impact
primarily on our Asia operations. More recently, there have been concerns about a potential outbreak of avian flu.
If there were another outbreak of a disease (such as SARS or avian flu) that affects travel behavior, it could have a
material adverse impact on us.