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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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.
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!
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?
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.
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.
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.
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.
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.
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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.
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.
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).
I’d whip them with a rubber hose ….