How Would You Penalize The Airlines For Safety Violations?

Yesterday, when we posted about the record-setting $24 million penalty the FAA gave to American Airlines over allegations the carrier flew thousands of flights in planes with potentially dangerous wiring, some Consumerist readers expressed the sentiment that the massive fine was either ineffective in properly punishing AA or that it did little to make air travel better for passengers.

Perhaps the most common comment on this news was the belief that the penalty will ultimately just be passed on to the customer in the form of higher airfares and additional fees.

Also along these lines, some pointed out that when the $24 million is divided among the 14,278 flights in question, it comes out to a penalty of less than $1,700/flight. Divided again among the number of passengers on each flight and and that fine only comes out to somewhere between $10-$35/passenger. That’s a far cry from the $27,500/passenger fines airlines could face just for sitting on the tarmac for more than three hours.

If the money doesn’t go back to the passengers on those planes, and the airline is just going to recoup the $24 million from other travelers, there must be a better way for the FAA to penalize airlines for safety violations, yes?

A commenter with the uncomplicated name of Ed wrote, “They need to hit them where it hurts. Don’t make them pay fines. Make them give us 2 inches more of legroom or deny them access to certain routes for a period of time.”

Meanwhile, Your New Nemesis dreamily suggested: “How about instead of fining just the corporation, we impose legal and financial hardship on the highest level executives responsible for any infractions like this. So, airline doesn’t update it’s wiring, then who-ever said ‘no, don’t fix it, they’re fine’ gets fined personally, and sees some jail time.”

Now here’s your chance in the comments to be creative (don’t let things like “laws” hamper your pipe dream) and tell us how you’d punish Airlines — or really any huge business that screws up big time — in a way that couldn’t easily be passed on to the consumers and, heaven forbid, might actually benefit them.

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  1. fsnuffer says:

    Take the airplane with the worst maintenance writeups in that airline and make the top 5 executives fly in it coast to coast. Just give the pilots parachutes just in case.

    • RaysPizza says:

      Alternately, they should make it that the executives always have to with their own airlines planes and pre-reserve the flight to be on the plane with the largest number of outstanding maintainence items pending completion. If they’re fine with it, then the 24M fine can go away. Though I doubt you’ll ever find them and their families on the same plane together.

    • bben says:

      I flew a Flying Tiger Airlines flight from Okinawa to California in 1962 one week after one of their planes (Flight 739) vanished over the Pacific. They did exactly what you recommended. A senior vice president was on the flight with us and introduced himself to everyone on board to let us know they were confident that our flight was safe.

  2. BigHeadEd says:

    Take landing and / or gate slots aways from them, especially at their super hubs, and give them to competitors.

    • jimmyhl says:

      Yep. That’s what they do to dangerous drivers—suspend their licenses and keep ‘em off the road. It really stings. The problem with that approach in the case of airlines is that they’ll lay off their employees while they’re grounded. It’s still not a bad idea.

  3. SkokieGuy says:

    Corporations have won the legal right to make unlimited campaign contributions. They are now “persons”, yet want the legal shielding of responsibility from their actions. Having it both ways should be over. Individual employees of corporations should be held accountable for their actions, when their actions have a significant impact on the public. A precedent exists

    The Sarbane Oxley financial reforms Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. …It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance.

    Let’s expand this type of legislation to include a broader range of criminal or civil actions, such as health and safety violations and more.

  4. menty666 says:

    I’d do this across the board anyway, but make it illegal for them to offer preferred seating, first class, express check in and and all the other employee perks in travelling so that they had to go through the same hell as every other schmoe that they inflict their “service” on.

    “Say three to enter the seventh ring of hell. I’m sorry, I didn’t understand that. Say three to enter the seventh ring of hell. I’m sorry, please try again. Say three……”

    • UCLAri: Allergy Sufferer says:

      Seriously? You’d get rid of business and first class?

      And really, you’ll pry my priority registration/free bags out of my cold, dead hands. I didn’t spend a year racking up those miles for nothing!

      • menty666 says:

        No no no….I’d make it so the airline employees couldn’t use them, make them fly coach to see what they’re doing to their customers.

  5. mandarynn says:

    Freeze their ability to raise costs or add fees for a year.

  6. Bob Lu says:

    Ground.

    • Bob Lu says:

      I think it should not just be about punishment, but more about safety. Since there are safety concerns regarding a lot of their planes, ALL such planes must be grounded until they are fixed to meet the standards of flying safely.

  7. Loias supports harsher punishments against corporations says:

    You want punishment?

    Give each airline 3 strikes, and if they “strike out” then their airline becomes a public utility and they no longer make obscene profits anymore. All executive salaries would be cut to reasonable numbers and it would be overseen by the federal government.

    Howard Hughes just turned over in his grave.

    • fsnuffer says:

      Why would we treat them like healthcare

    • John B says:

      Profits?

      Er, we’re talking about AIRLINES, not banks……

    • John B says:

      Profits?

      Er, we’re talking about AIRLINES, not banks……

    • JMILLER says:

      Obscene profits? What hole have you been living in?
      Looking at the top 9 US airlines:
      “On the whole, those nine airlines collectively had losses of $3.4 billion. That was a huge improvement over 2008, when the same companies together tallied net losses of $19.5 billion.”

      I am sure they will gladly give you every dime of profit.

    • EllenRose says:

      “All executive salaries would be cut to reasonable numbers and it would be overseen by the federal government.”

      I suppose it’s better the salaries are overseen by the feds instead of California, but government jobs are known for their perks and salaries. (Oh, a lot of the money federalistas get comes from selling influence, but still …)

  8. JohnDeere says:

    ground all the planes that were not in compliance for the amount of time they were out of compliance, or they could pay the fine.

  9. ARP says:

    Even if they do pass on financial penalties to the customer, that’s not a bad thing (hear me out). This essentially means their rates would go up, meaning that its likely that consumers will turn to other airlines with lower fares. The fines should be greater than the savings from non-compliance, so that its in their financial interest to be safe.

    In short, unsafe airlines should not be in business. I think the complicating factor comes when there is limited competition in certain cities/routes. That’s where allowing International airlines to compete on domestic routes, would help.

    Oh, and I’m all for jail time for executives or senior persons who request, imply, or make it impossible to comply with safety regs.

    • dwasifar says:

      Yeah, that’s how it should work.

      Unfortunately, what would REALLY happen would be that when one airline raised its fares to recoup a fine, the other airlines would raise their fares to match, just to make more money.

      Want proof? Look at what happened with bag fees. One airline started doing it, and BAM the others followed immediately; they didn’t sit back and wait for the price-shopping customers to switch to them.

    • lidor7 says:

      I was going to say the same thing, but I’m glad someone beat me to it. The fines are applied to the offending airline, not the industry as a whole. Fines are an added cost to operations, making their prices less competitive.

      Now if one airline raises their prices and the rest raise their prices as well, that’s separate issue altogether.

  10. pecan 3.14159265 says:

    Money talks. It’s not just about fines or slaps on the wrist – you need to penalize them where it will affect the bottom line. Ground them, take away some of their most profitable hubs, target the areas where they fail the most and give them real consequences to deal with – customers don’t want to get screwed over by higher fares, but they’re already getting screwed over by incompetence and apathy. Better to make the airlines do something about it.

    • ARP says:

      Ignoring my comment above them on fines, the problem is that the persons that cause or encourage that sort of behaviour will just move on to another industry if their salary gets too low due to the fines, or shrinking route base. I say you actually fine the persons responsible for that decision. The company may reimburse them for the fine, but at a certain point, you’ll get shareholder rebellion if they have to keep paying out for executive fines.

  11. inelegy says:

    The problem with large fines like the one AA just got hit with is they will simply pass the cost along to future passenger fares.

    How about this: after an airline receives a significant fine it would not only have to pay said fine but also be barred from raising fares and other tariffs (freight rates, fees, etc.) for a given period of time. They would be allowed to have fare sales to stay competitive but the ceiling would be locked as far as raising fares above a median over the period of when the violation took place.

    In the recent case of AA’s fine, I’d say that or two to three years of frozen fares would make an impression on the airline and compel it to focus on better managing all aspects of its business model.

  12. Dover says:

    The responsible individuals in the corporate chains of command should be prosecuted for accidents. I’m thinking about the Upper Big Branch Mine and Deepwater Horizon disasters. Between e-mails, phone logs, safety records, and employee testimony, determine who made the decisions that led to the disaster and hold them criminally and civilly accountable for the death and destruction their orders caused. Hopefully these people would clean up their acts, but we’d get justice at the very least.

    • Platypi {Redacted} says:

      Agreed, criminal liability may have a bigger impact on those making these decisions. Fines to the company may irritate a corporation, but sending a VP to jail for 6 months is even better! Of course, then you get companies hiring scapegoats to take the fall (similar to the Dick and Jane movie with Jim Carey).

      • Difdi says:

        On the other hand, doing so is criminal fraud and perjury for the executive who hired the scapegoat.

    • fsnuffer says:

      Disagree. Criminalizing accidents hampers accident investigations. Right after an accident, everyone lawyers up and pleads the fifth preventing investigators from finding the cause in any timely fashion.

      • Difdi says:

        Nobody suggested criminalizing accidents. Negligence, on the other hand, is already criminalized. We just need enforcement.

      • BBBB says:

        When there are no criminal issues to pursue, violations should result in mandatory training for all personnel involved up to the CEO. This is appropriate since the executives set the example for corporate climate.

        Executives really hate to be bothered with dealing with mundane things. 100 hours of safety training sitting between the the shop supervisor and a mechanic will be noticed by an executive – think of all the golf and champagne they would miss.

      • JMILLER says:

        Why wouldn’t you criminalize them for not doing their job? BP, Haliburton and the rest incvolved should be brought up on criminal charges for the MURDER of 11 men and the Gulf of Mexico. They of course will use money to maker it go away.

  13. Angus99 says:

    Another vote for grounding. The degradation of the safety focused culture is what results in incidents like the Challenger catastrophe – it is undercut by inches and by one bureacratic decision at a time, until a critical mass is reached. Ground them, and enforce a requirement for comprehensive proof of rectification of fault, preferably with a third party that has no financial interest and can act as enforcer of the criteria. Plus, grounding hits them in a much more severe financial sense – they should be forced to refund the costs of impacted travellers, including any cost that the traveller incurred for non airline expense that could not be cancelled without penalty. It’s also harder for them to pass on the lost revenue and damages, short of raising prices – which would penalize them on a go forward basis. They’d have to eat most of it.

  14. Santas Little Helper says:

    I don’t see how a fine really works as a motivating factor though. This is a real problem, but not just for the airline. Say ok, we fine them 24 mil, but sometimes the fine is far cheaper than actually fixing the problem. Say then, ok we cut your routes, gates, flight, etc, ok, what if you already paid for that canceled flight, way to go, now you and 1000′s of other people have to make other arrangements, good luck getting to your destination.

    Ultimately I think the airline industry needs to go back to strict regulation, a la pre 1980′s deregulation. Sure everything cost more, and flights were not cheap, but you had service, plenty of non-stop travel, solid jobs for millions of people. There was a nice arrangement between the govt. and airlines. Airlines were all but guaranteed profit and therefore did not have the insanely competitive market they are in today. Aviation is too dangerous of a field to simply let the lowest bidder win. It’s one the few examples where the free market completely fails, as we have seen in an era since deregulation.

    • fs2k2isfun says:

      I strongly disagree. Deregualtion has opened up air travel to people who could never afford it before. If airlines were reregulated as you describe, they would all shrink and jobs would be lost as fewer could afford to fly.

  15. nwgray says:

    I would, for all businesses not just airlines, make it a law that, after a punitive decision, the companies could NOT pass that cost along to the consumer. If company A gets fined $1M and then bumps up fees to customers to cover that cost, the punishment of the fine has been lost. The fine needs to come out of their own pockets, not the customer’s pocket.

    • JMILLER says:

      The customer does mot pay for it if they do not fly them anymore. If AA can raise prices anytime they want, why wouldn’t they charge whatever they want on a flight? It sounds like contractor type pricing to me. You calculate costs, add profit, that is your bid. The airline industry and any successful industry uses market based pricing strategies. I can charge this for my service because it is what the market will bear. They are willing to pay X amount extra to be on my plane because I offer Y. If AA were a monopoly your point is correct (uility companies are a great example) but airlines are hardly a monopoly

    • Doubts42 says:

      That is a great theory, but enforcement would be impossible.

      • Southern says:

        Not to mention most likely unconstitutional, since the there are no laws or provisions for the government to mandate airline prices.

    • dwasifar says:

      And if they don’t have it in their pockets? What then?

      It’s a nice idea to say we should prevent the penalties from being passed on to the consumer, but the problem is that ALL the money in the corporation’s pockets comes from the customers. Where else do you expect them to get the money? Sell the planes?

      Capping fares or fees or whatnot after the fine is levied is not going to work, because the economy is not static and fares NEED to change, to match changing demand or competition. For example: let’s say United gets a fine and it comes with a one-year fare freeze. Then fuel costs rise (they do that sometimes), or fares rise in the industry in general for some other reason, and now suddenly United is operating every flight at a loss. By the time the freeze expires, United is in serious financial trouble even by airline standards, and is implementing drastic cost-cutting measures to survive. Inevitably this affects service and maintenance, generating more violations, more fines, and more fare freezes. Lather, rinse, repeat until bankruptcy.

  16. Gman says:

    You are right, whatever fee they are made to pay, they will just pass onto the consumer.

    So from now on, if there is a safety violation – ground every plane in the fleet until the violations are fixed [and verified fixed].

    In addition, make sure they fully refund all tickets already purchased [even if it was purchased through a 3rd party].

    Now paying employees is a difficult one. Thousands of them will be really hurt in the pocketbook. I have no clue how to make that part right.

  17. bball123h says:

    Confiscate the airplanes! Eventually they’ll run out.

  18. c!tizen says:

    I’ve got an idea. All I need is some tar, some feathers, broken glass, a hung donkey with a strap-on, a nail file, 2 live snapping turtles, a midget circus clown and a video camera with internet access; round up the top executives along with who they hired to maintain safety regs, and I guarantee this will never happen again.

  19. SonarTech52 says:

    Your New Nemesis dreamily suggested: “How about instead of fining just the corporation, we impose legal and financial hardship on the highest level executives responsible for any infractions like this. So, airline doesn’t update it’s wiring, then who-ever said ‘no, don’t fix it, they’re fine’ gets fined personally, and sees some jail time.”

    ^this

    fines, or jail time for the top execs would surely make the companies follow the rules.

    • Gman says:

      The only problem with jail time for top execs is that it will probably be nearly impossible to dig up enough evidence to convict them.

      I’d love to see some of the useless CEO’s actually do some hard work instead of just collect a paycheck, but I also strongly believe that we must prove they actually did something bad. We can’t place someone in jail for what their child does, nor can we for something one of their employees does.

      Find an e-mail, a letter or a recorded conversion – go for it. Throw the book at em.

  20. DariusC says:

    “Meanwhile, Your New Nemesis dreamily suggested: “How about instead of fining just the corporation, we impose legal and financial hardship on the highest level executives responsible for any infractions like this. So, airline doesn’t update it’s wiring, then who-ever said ‘no, don’t fix it, they’re fine’ gets fined personally, and sees some jail time.””

    Yeah, because the CEO makes all of the decisions on every level. THAT’S fair!

    • pantheonoutcast says:

      “If words of command are not clear and distinct, if orders are not thoroughly understood, the general is to blame. But if his orders are clear, and the soldiers nevertheless disobey, then it is the fault of their officers.”

      Sun Tzu

    • TerpBE says:

      But if he knows he’ll pay for the mistakes, you can be sure that he’ll do everything in his power to make sure those under him don’t make any.

    • JMILLER says:

      A CEO is the ultimate responsibility in anything that happens with the corporation. If something illegal happens, they personally MUST deal with the issue. AA was not fined from a random inspection. It was a PATTERN. If the CEO did not hire people who would follow out his wishes, then he needs to be fired. It is kind of like a police officer giving you a warning that your tail light is busted. You say, so sorry sir, I will get that fixed, and the ticket goes away, BUT, if you continue to drive with the busted light, and don’t fix it, you get the fine.

    • your new nemesis says:

      I don’t think we should always go after CEO’s, although they are ultimately responsible for their company. I think the guy who either failed to act (could be a branch manager) or disregarded the safety requirements should be the one to pay. We see here on this site too often people get screwed over by low level managers who may never even pass the information up. Where ever the chain stops or the guy in charge of compliance should face consequences, there is always a paper trail on large expenditures (or lack thereof). If we start holding PEOPLE accountable, then the people will be afraid to overstep and will be more likely to err on the side of the consumer.

    • caradrake says:

      The person you are quoting says to go after whoever made the decision, not just the CEO.

  21. ArcanaJ says:

    Ground ALL their flights until the issue has been corrected and signed off on by an independent agency.

  22. denros says:

    Let the punishment fit the crime – cut the brake lines on their cars.

    Kidding! Sorta…

  23. pantheonoutcast says:

    If my small business incurs a fine because of a safety violation, it comes out of my pocket because I’m the owner and operator, and therefore responsible for the conditions which led to the violation. In the case of a publicly-traded company like an airline, levy the fine personally against both the majority stockholder and the CEO. Corporations are people, remember?

  24. Southern says:

    For SAFETY violations, like wiring? Easy answer – ground the planes until they’re updated and inspected.

    Of course if they’re not flying, then the FAA can’t “fine” them.. so I kinda get the idea that it’s cheaper for the airline to pay the fine AND more profitable for the FAA to just keep flying the planes and keep on fining them. Safety be damned!

  25. Azuaron says:

    Have the government (FAA, FCC, whoever’s relevant for the business in question) take controlling stock of the company away from the executives.

  26. John B says:

    Fines, confiscation of slots or forbidding an airline to increase fares (although there’s no such thing as A fare – there are thousands and thousands and they change dynamically every few minutes, depending on demand) is counter-productive. They’ll pass any costs on to consumers (having made a killing as a tax-deductible) and any reductions of capacity automatically drive prices up – supply and demand.

    The only strategy is to increase regulation, with EXTREMELY robust inspections of compliance of scheduled maintenance and EVER MORE SO to ensure that the airlines are complying with FAA directives.

    Any non-compliance means a PERSONAL criminal penalty against the postholder that any airline has to nominate at board level.

    Fines are NOT deductible

    The intent is to ensure that airlines are safe.

    Fining’s the easy way out and it doesn’t work.

  27. Jonesey says:

    “Your New Nemesis” hit the nail on the head. If we start going after executives of corporations who hide behind a company logo, then we might see some progress.

  28. Retired Again says:

    Return Meals, soft drinks, pillows or NO BAGGAGE FEES can be charged for one year!

  29. AllanG54 says:

    Unfortunately there’s really not a lot we can do other than fine them. Grounding planes just puts hardship on the travelers that can’t get a flight. Yes, other airlines might fill in the loss of seats but you can bet they’ll cost more. Remember, it’s the competition that’s keeping fares relatively low. You may think it’s a lot of money to pay $400 to fly from one coast to the other but it’s still less expensive than driving. Two people might come out less than $800 but not necessarily when you factor in time, motels, meals, gas and tolls. The fact is, there isn’t one business in the world that doesn’t take shortcuts in hopes of avoiding extra expense. They may not be putting lives in jeopardy but frankly it’s the way business is run and that’s a fact of life.

  30. lupis42 says:

    Someone at the company had to make the call, right? Jail time. Can’t figure out who it was? CEO does the time, as the responsible party.

  31. sqeelar says:

    Are fines a good method to enforce compliance? In an industry that’s eyeing pay toilets as a major revenue stream? Maybe the FAA should fine away, and put the money into a bullet train fund.

  32. Thyme for an edit button says:

    A good flogging for those responsible for safety violations. Let’s bring back public stocks too. The airline pays for the rotting vegetables for passengers to throw.

  33. ChemicalFyre says:

    I think Old-school works best. Have each affected person sent a hand-written apology letter for mechanical oversight. Hand-written. By the executive responsible for oversight of repair on the aircraft, and up the chain of command. Explanations of how you now value human life.

    Then I think a nice little re-enactment, bad safety video style, ought to be worked up illustrating exactly what happens in a crash. Whats found. What isn’t. Bring them to it and make them participate in separating human remains from the crash site.

    Finally, toss a huge lien on the company rather than a monetary fine.

  34. Arcaeris says:

    Give the fine money to the passengers on these planes. It might not make the airlines actually do anything about safety, but it will certainly make everyone on the planes feel better about it. The passengers were the ones who were wronged and put in danger, why shouldn’t they get the compensation?

  35. Doubts42 says:

    change the $ to weeks. for that amount of weeks, no one at any salaried level in the airline can travel by air, unless they fly coach on their own airlines.

  36. SPOON - now with Forkin attitude says:

    It’s more about safety. Force them to pay a third party for inspections of all their planes. ground all their planes until individual plane inspections are complete. require that they honor all their bookings by either putting them on a competitor or if the consumer chooses, waiting (with accommodations if required.) Require that they book no more flights until the backlog reaches less than 10 percent of their passenger load.

    as the planes are inspected, put them to use. no waiting till the end.

    Then fine them. make sure the money comes directly from the executive board’s compensation.

  37. Pax says:

    PART ONE
    Step one: Identify the flights where the violations took place.
    Step two: examine the airline’s books to see how much money was made on those flights.
    Step three: fine the airline between five times their gross receipts for those flights.
    Step four: order the airplane(s) specifically involved to be grounded, until the fine is paid AND an FAA-assigned inspector certifies that they are 100% in compliance with all FAA regulations.
    Step 5: after a 90-day grace period … charge interest, at Prime, on the fine.

    PART TWO
    Establish a grading system for an airline’s safety-and-service record, which indicates the level of compliance with FAA regulations and requirements. It starts at 10.0, and loses 0.01 points for every $250,000 in fines paid by the airline, 0.10 points per non-total in flight failure (dropping an engine, etc), and 0.50 points per actual crash.

    Incidents beyond pilot or airline control – i.e., a bird strike, turbulence, etc – do not affect this rating.

    Fines which were assessed count towards this rating for ten years after the date on which the final payment towards that fine was made.

    The original fine assigned – not any reduced amount the airline might negotiate – is what determines the point loss.

    The ratings are updated quarterly. Fines/incidents which have “goine stale” are removed from calculation; new incidents or fines which occurred since the most recent update are added.

    Airlines are required to display their current Grade on all advertising, with font and size/prominence standards based on existing advertising and consumer-protection laws.

    Optional: Any airline whose grade drops to less than 1.00 … has their entire fleet immediately grounded, subject to FAA inspection. And nothing flies until it ALL passes!

    Optional: Multiply all Federal taxes and FAA fees by 10. Then divide by the airline’s current Grade. The lower their score, the more they pay.

    Hits the airlines hard enough to be felt, AND, helps consumers be more-informed when they select an air carrier for their trip – where a low grade/score has it’s OWN negative effect on the airline’s bottom line.

    I’m especially fond of the grading system idea, actually.

  38. Azuaron says:

    There are a lot of people saying that corporate executives should be held criminally and financial liable for actions of the corporation.

    This is a terrible, terrible idea and completely defeats the entire purpose of corporations.

    What is being suggested is called “piercing the corporate veil,” and it usually applies to small business owners who run their “business” as if there wasn’t a separation between their business and personal finances. This often happens during lawsuits (often frivolous) where the plaintiff (that is, the guy who “accidentally” tripped and broke his nose on business property) tries to sue the defendant (the business owner) for not only all the money in the business, but all the money that the defendant personally has outside of the business. Most people incorporate to prevent this kind of thing from happening.

    One of the most significant benefits to incorporating is the limiting of liability. When you incorporate (correctly), you risk only your investment in the corporation and do not become liable for anything outside that investment. Sure, you could lose all of your $100,000 investment, but if the corporation accumulates $10 million in debt, it is not your responsibility.

    Employees of the corporation (executives, for instance) might not be liable for anything the corporation does (like accumulate debt) if they have no investment in the corporation.

    What people are asking for is an elimination of this liability protection. Not only that, but they want to make employees (who may not even have an investment in the corporation and, thus, have no responsibility for corporate actions) to be held responsible for corporate actions and debts.

    This is beyond dangerous. If this happens, it will herald the collapse of American business. No one will want to invest in or work for a company where they could be held liable for company actions. Someone sues McDonalds because they spilled hot coffee on himself? Sorry, that’s coming out of your paycheck, Mr. Executive, and yours, Mr. Franchise owner, and yours, teenage employee.

    This would be quite annoying for large businesses, but they’d probably come up with ways to weasel around it with bonuses, pay raises, expense accounts, and such. This would be absolutely devastating for small businesses. Say an incorporated freelance web developer makes a website that’s cracked and their client loses the credit card numbers for all their customers. Currently, the web developer’s company is responsible. The company will probably go bankrupt and fold. Sucks. No corporate veil? The company folds, and the developer is responsible for everything still owed. The developer will probably go PERSONALLY BANKRUPT.

    The corporation has to be responsible for corporate actions. What should occur is the corporation should be held responsible AND the corporation should be responsible for maintaining policies that ensure employees can’t make the corporation violate laws and regulations. If the employees (executives) cause the corporation to violate laws, the employees should be punished by the corporation according to the required corporate policies (mandatory firing).

    • P_Smith says:

      The only “responsibility” that CEOs ever show is to their shareholders, not to the law nor to any sense of ethics and decency.

      “Corporation” is an idiotic concept and should be abolished worldwide.

  39. Warren - aka The Piddler on the Roof says:

    This is kind of a radical idea, but how about this: instead of letting a government organization (which is most likely owned by the offending corporation) levy fines and punishment against infractions like this, why don’t we have a nationwide vote on what should be done? Kind of like ‘American Idol’ where people phone in to vote, except the grand prize would be 10-20 years of hard labor and being forced to live on 50% of the average salary of all the passengers whose lives they endangered for the rest of their lives.

  40. Saltpork says:

    Shut the planes in violations down.
    The airline has to pay for any layovers or missed flights and can’t subsitute another plane in it’s place.
    The consumers will be so rabid towards the airline they will learn their lesson.

    Either that or have an FAA official steal beer and open the safety chute.
    Or slash tires.
    Or throw paint on the cockpit.
    Or defecate in the CEO’s chair.
    Or slap around the upper management.
    Or drive a bus packed with the explosives into the plane ala Speed 1.

    I don’t think I can top that last one. Damn.

  41. FrugalFreak says:

    By Shutting them DOWN! no loss of life is worth a few dollars profit earned by not doing maintenance.

  42. mbgrabbe says:

    Fines are dumb. They remove cash + liquidity from an industry that badly needs more of it. An airline should have to read a statement proclaiming its poor safety record on every pre-flight announcement on every plane for 1 week. That way you embarrass the company and you educate consumers (who will be given a reason to fly another airline, which is basically itself a financial penalty, BUT the “fine” in this case is revenue transferred from the poor safety airline to an airline with better safety). Bam, the market solves our problem.

  43. 24NascarDude says:

    I would love for ONE state to go out on a limb and be the first to apply “jail time” criminal penalties to corporations. How? Simple. When normal folk commit felony grade crimes, they get put in jail and are unable to work while in jail. The same principle would apply. Corporations who commit a felony grade crime should receive “virtual jail time” and be BARRED from doing business in the state where the felony occured for a specified period of time. This would apply accross the board, not just to airlines. For example, we have seen Bank of America forclose on the wrong house several times. In my state, that would qualify as a class B felony (theft over $60,000). So, if it occured here, Bank of America would be forbidden from doing business in Tennessee for, say, 4 years. I would probably set it up the penalties like this: Class E felony – 6 months; Class D felony – 1 year; Class C felony – 2 years; Class B felony – 4 years; Class A felony – 8 years. Maybe if a few businesses realize that they can’t get off with just fines anymore, they’ll cut out some of their shenanigans.

  44. dush says:

    Refund half the ticket price to each customer during those flights.

  45. OldSchool says:

    Jail the exacutives for recless endangerment. I stronly expect that would have an immediate and positive impact.

  46. Overstim says:

    Here’s what should happen: Penalties cost money, airline raises the fares, people stop patronizing airline, stock price goes down, shareholders oust C.E.O. The system can work. We just need to get real and make penalties that ACTUALLY hurt the bottom line. $24 million? make it $240 million. Make it $2.4 BILLION. SOmething they will feel. Something that will make sure the airline never gets in trouble in the first place.

  47. donovanr says:

    Slots and points. Give the various key slots at major airports a point value. So AA might have 500 points worth of slots. Then instead of a 20 million dollar fine just hit them with a 10 point fine. They would then have to give up some slots at say JFK.
    On the other side reward airlines with spotless records some points that they can use to buy up the now vacated spots.
    As time moved along the less safe airlines would get pushed out and the more safe ones would take over. Marketing be damned.

  48. donovanr says:

    What about punishing the management? Jail time anyone?

  49. ecludian says:

    I’m all for making company decision makers be required to only fly their airline, in coach, in the back of the plane right next to a screaming kid and then leave the plane on the tarmac for hours on end. Kind of like Undercover Boss but you deal with passengers instead of employees (who probably would say the same things about the company).

  50. axiomatic says:

    Agreed with the rest of you. Airplanes in poor service MUST be used exclusively by the airlines top executives for all travel needs. Then if the airline executives refuse to fly in the plane it should be grounded.

  51. Difdi says:

    Pass a law making it a felony to pass on the effects of a government fine to the customer by raising rates. Whatever executive(s) have the right idea of doing so and issue orders to do so spend 3-5 in federal prison.

  52. Ilovegnomes says:

    Hmmmm…. I’m thinking something like what our city code enforcement does. Make the changes to meet compliance and then bill the owner for the work (at an inflated price) as well as a fine. I guess the government would have to confiscate the planes to do that. Ooooh picture repo men for airlines! I see a movie script coming on. Ha!

  53. sirwired says:

    Yes, it gets passed onto customers. If AA’s costs rise too much, pax will choose other airlines or other forms of transportation. This is how fines for nefarious conduct work. What other realistic suggestion is there?

  54. KyBash says:

    A way that hurts them without raising prices — make them pay the fine in new stocks. That reduces shareholder equity, makes the shareholders mad, and hits the execs in their own pocketbook.

    The stocks could go into a simple account — the dividends go to pay down the public debt, and the voting rights are exercised to vote against current board members.

  55. BrownEyes says:

    If you fine them, they will just pass it along to the consumer or lay off employees. I say make high level execs sit between a snot-nosed, screaming toddler and a morbidly obese talker in a seat with no leg room that won’t recline every day for the next six months… in a plane with similar violations.

  56. faea says:

    I agree with the grounding. If a plane is in violation upon inspection, airline has x amount of time to fix it and the plane is grounded til then.

  57. jenjenjen says:

    Make the airlines with any safety-related penalties have to put a black-box warning on their websites. They can have space there to rebut the claims and clarify when it was really a paperwork failure rather than laxity, but they have to show it to all customers who try booking them.

  58. P_Smith says:

    The whole problem with corporations is that those who run them are rarely held legally responsible for their decisions. (Union Carbide and Bophal, anyone?) Worse still, the shareholders are completely isolated from any culpability.

    What would I do? Confiscate the company’s share dividends for a year and use it to partially refund customers and also fund the FAA or NTSB.

    And if the company does any funny business to minimize the share dividends during the penalty period (i.e. more than a 3% difference between projected and actual dividends), extend the period to five years of forfeited dividends.

    The only way corporations pay any attention is to hit them in the wallet, especially the shareholders’ wallets.

    .

  59. canasian says:

    I would have the the consumers of each airline fill out customer satisfaction surveys (in multiple areas, service, additional fees, airline comfort, etc) once every quarter or once every six months. If the results are below a certain threshold, then the airline is hit with a massive massive almost unreasonable fine (like, one-hundred million and above)

    Same thing goes for safety inspections.

  60. Miss Dev (The Beer Sherpa) says:

    Require them to stop charging extra fees and to reduce plane ticket prices to just 25% above cost for a given amount of time.

    That will help us and hurt them, for sure.

  61. bumblefoot2004 says:

    I’d grab some beer, open an exit door, inflate a slide, ride said slide, then run like hell. Make money doing interviews (enough to cover bail and more beer).

  62. banmojo says:

    I’d whip them with a rubber hose ….