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Public Policy

A319 Rendering

As a global airline, we are affected by numerous laws, regulations and policies that govern various aspects of our business. We are active in reviewing and discussing existing and upcoming policy changes and regulatory initiatives. We also take part in industry dialogue and lobbying efforts related to those issues of highest importance to our company's success and the concerns of our stakeholders. In all that we do, we strive to adhere to our Global Corporate Responsibility Statement and work to deliver on the company's overall strategic objectives.

Through our Political Action Committee (PAC), which is funded solely through voluntary employee contributions, we engage with elected officials who share our views on critical issues such as air traffic modernization, energy, the environment and tax and regulatory reform. The PAC, established in 1985, maintains strict standards for contributions to elected officials, applying specific criteria such as voting record or position on issues regardless of political affiliation.

We participate in industry associations such as Airlines for America (A4A), the International Air Transport Association (IATA) and the Regional Airline Association (RAA). Our involvement allows us to gain insight into core issues for the airline industry as a whole and to advocate jointly for regulations that support a healthy, competitive industry. We also benefit from the opportunity to share technical expertise and operational knowledge that leads to better safety, customer service and overall efficiency.

European Union Emissions Trading Scheme

Beginning in 2012, aviation will be included in the European Union's Emissions Trading Scheme (EU ETS). The ETS is a cap and trade system that requires companies within specific industries to submit allowances to cover certain emissions from their operations. With limited exceptions, all flights landing in or departing from the EU will be covered in the ETS regardless of where the operator is incorporated. Emissions from all phases of the flight are included in the ETS.

Although American believes the EU ETS violates international law, American is complying with applicable requirements. We have made clear, however, that we are complying "under protest" given significant legal concerns.

Specifically, American Airlines believes that the unilateral application of the EU ETS to non-EU airlines violates international law. It is a commonly held view of airlines throughout the world and of countries outside of the EU that greenhouse gas (GHG) emissions should be addressed under a global approach, rather than through a unilateral action by the EU. Non-EU governments are continuing to consider formal challenges to the EU ETS as applied to aviation.

Given aviation's worldwide operations, aviation GHG emissions should be addressed on a global sectoral basis. Our position is that the International Civil Aviation Organization (ICAO), the United Nations body charged by treaty with establishing environmental and other standards for international aviation, is the appropriate entity to establish such measures.

The world's airline industry, air navigation service providers, airports and aircraft engine and airframe manufacturers are putting together a concrete and aggressive proposal for a global approach, with emission reduction targets that will ensure we continue our strong record of continuous reductions. Under our proposal, all airline emissions would be subject to collective emissions targets — an annual average fuel and CO2 efficiency improvement of 1.5 percent through 2020 and carbon-neutral growth from 2020, with an aspirational goal of a 50 percent reduction in CO2 by 2050 relative to 2005 levels. While participating airlines will have to make significant investments to meet these targets, they will also depend on governments doing their part with respect to air traffic control modernization, alternative fuels and research and development investments.

U.S. Congress Successfully Passes FAA Reauthorization Bill

In 2012, the United States House of Representatives and the U.S. Senate reached an agreement on legislation to reauthorize the Federal Aviation Administration for four years (through 2015) and to continue raising revenue for the Airport and Airways Trust Fund. The President signed the measure on February 14, 2012. This funding, totaling approximately $63 billion, will help the U.S. air traffic control (ATC) system manage the growing demand for U.S. air travel. Improvements in ATC technology and equipment will also help airlines fly more efficient routes.

American Airlines governmental affairs team participated in an industry coalition formed under the auspices of Airlines for America (A4A), formerly known as the Air Transport Association of America, Inc. (ATA), to lobby for passage of the bill. The success of the legislation provides the means for the FAA to pursue safety, modernization and capacity projects at airports across the United States, including $500 million annually for security improvement projects.

Additional provisions in the FAA reauthorization relate to support for essential air service, directives on unmanned aircraft systems, transportation of lithium batteries, and a commitment to development of the Next-Generation Air Transportation System. The law also reflects Congressional consensus that the European Union should not extend its emissions trading (EU ETS) proposal to international civil aviation without working through ICAO.