Obama Administration Gets Tough on Airlines

FAA and DOT safety and consumer fines against the airlines skyrocket.

May 5, 2010, 6:56 PM

May 6, 2010— -- The federal government has taken a much more active role under President Obama in regulating the airlines and imposing fines for both consumer and safety violations.

The get-tough approach has led to millions of extra dollars in sanctions and more pro-passenger rules, such as recent limits on how long a plane can wait on the tarmac for takeoff.

These changes are in stark contrast, aviation experts say, to the Bush years, when regulators essentially let the airlines police themselves.

"The previous administration, after 9/11, pretty much called the watchdogs off in terms of enforcement actions or things that would cost the industry any money at all," said L. Nick Lacey, the former director of flight standards for the FAA and now chief operating officer of aviation consulting firm Morten Beyer & Agnew. "Either said or unsaid that was the operating tone in the field. Now, under this administration, they seem to be more actively looking and willing to bring about civil penalties."

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Take the Department of Transportation, which oversees airline pricing, advertising, delays on the tarmac and involuntary bumping. In 2009, after Obama had appointed Ray LaHood as Transportation Secretary, the DOT levied $2.6 million in fines again the airlines. That's up from $1.2 million during the Bush administration in 2008 and $1.4 million in 2007, according to data requested by ABC News from the DOT.

The Federal Aviation Administration, which oversees safety, also saw a spike in penalties during the first year under the leadership of Obama appointee Randy Babbitt. In 2009, the FAA fined the airlines $14.7 million, up from $7.6 million in 2008 and $6.1 million the year before, according to ABC News calculations of FAA data.

"Clearly we have an administration now which believes in more government intervention on behalf of consumers and other constituencies," said Brian F. Havel, a law professor and director of the International Aviation Law Institute at DePaul University in Chicago. "I think the philosophy of the administration clearly is to be more interventionist."

DOT's New Tarmac Delay Rules

Just last week, the DOT fined Southwest Airlines $200,000 for bumping passengers from oversold flights without promptly paying them or providing written notices of their rights. Last year, Southwest bumped 13,113 passengers -- 80 percent more than the next closest carrier. (Southwest, however, did carry the most passengers domestically. Passengers had higher odds of being bumped on other airlines, with American Eagle being the worst.)

But Havel and other aviation experts say the real sign of change came with the DOT's recent tarmac delay rules. For years, passenger-rights groups have been fighting for a so-called Passengers' Bill of Rights, after a handful of flight-delay incidents that can only be described as horrific. The most famous was on Valentine's Day 2007, when JetBlue kept some passengers trapped in planes on the ground for more than 10 hours during a snowstorm.

Congress has considered several passenger provisions but never passed any real protections into law.

Then in August of 2009, 51 passengers on a Continental Express flight diverted to Rochester, Minn., ended up stranded overnight on the tarmac with little food and a broken toilet. That was a tipping point for LaHood, who decided not to wait for Congress, and ordered agency regulations on his own.

Since last week, airlines have been required on domestic flights to let passengers off any plane that has spent three hours on the ground waiting for takeoff. Airlines found in violation are subject to fines of up to $27,500 per passenger. That's a steep fine; a single delayed jet with 186 passengers on board could cost the airline a fine of $5.1 million. The airlines have been fiercely opposed to the new rule and said they will preemptively cancel flights rather than risk such steep penalties.

Havel said the DOT moved again with the tarmac delay rules because Congress failed to take action.

"That alone is a sign of a new activism by the administration," he said. "The Obama administration clearly has taken a very strong stance here and passed these rules and this is a sign, perhaps, of the way they intend their enforcement policy to be in the future."

Stuck on an Airplane

Havel noted that the actual number of people stuck in such horror flights "is minuscule," especially when compared to the overall number of passengers flying each day. But the media had intense coverage of these few high-profile cases, he said, helping to prompt change.

LaHood said, through a spokesman, that the Obama Administration "places a high priority on protecting airline passengers."

"The traveling public has the right to expect that their flight will be safe and that the airline will treat them fairly," LaHood said. "During my watch, the U.S. Department of Transportation has vigorously enforced our aviation regulations governing both safety and consumer protection, and we will continue to do so.

Havel said that the February 2009 crash of a Continental Express commuter plane, operated by Colgan Air in Buffalo, N.Y., also got a high amount of publicity, especially when reporters started focusing on the low salaries and long commutes of the pilots.

Asked about the increase of fines at the FAA under the Obama administration, spokeswoman Sasha Johnson said, "The FAA takes its enforcement responsibility seriously. Our main goal is to make sure all air carriers are complying with regulations and are operating safely."

The Air Transport Association of America, the trade and lobbying group for the U.S. airline industry, declined to comment.

But Vaughn Cordle, chief analyst with AirlineForecasts, said that while "there's historically been an inadequate number of FAA inspectors, the airlines do an extraordinarily good job of keeping everything up to date."

FAA Safety Violation Fines

He said the FAA has a number of enforcement tools beyond fines.

"Any increase in dollar terms in fines and fees is not indicative of any derogation in safety," Cordle said.

For instance, Cordle said, if an airline is found to have an outdated manual onboard a plane, it doesn't just get fined for that one violation but for the 200 or so flights that plane has taken since last being inspected.

A $12,000 fine quickly gets multiplied into a $2.4 million penalty, he said.

"It's really statistically impossible to make a safety claim because fees are going up," Cordle said.

The airlines have an incentive to say on top of safety violations, Cordle said, because any grounding of planes is very expensive. If the FAA orders an airline to make an emergency fix on its fleet, it could cost millions of dollars.

The $2.6 million in FAA fines in 2009, he said, "is not a lot."

"That's like a little grain of sand on the beach in terms of the scheme of things," Cordle said. "These airlines are bringing in $20 billion a year."

Michael Boyd, president of the Boyd Group International, an aviation consulting firm, said that "LaHood is on a warpath" with the airlines. He said the new tarmac rule is "dishonest."

"It implies that it happens all the time. It does not," Boyd said. "It implies that airlines do it intentionally. They do not. And it implies that when it does happen that airlines always have an option to get people off of airplanes."

Boyd and Havel both said that DOT now needs to focus not so much on the effects of delays but the causes.

"The real problem, of course, is that the delays are caused by the fact that we have the most antiquated air traffic control system imaginable," Havel said. "We're still using the radar system that the Wright Brothers used. Until that is replaced, there are going to be continuous delays."

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