FAA Doling Out Record Fines

Just as travelers are getting upset about the rising prices and fees, airlines are taking issue with record fines being levied by the Federal Aviation Administration. The FAA has a dead serious stance against airline safety improprieties and since 2004 has imposed nearly $30 million in civil penalties against more than 25 carriers. And on Thursday, regulators levied a fine of $24.2 million against American Airlines. That figure, the largest fine in FAA history, nearly trebles previous sanctions.

What did the airline do to deserve such a fine? It is due to allegations of improperly repaired electrical wheel well wiring around landing gear in the MD-80 series. The reported maintenance and inspection violations compelled American to ground 300 jets in early April 2008 until it met FAA safety regulations, leading to thousands of canceled flights affecting roughly 300,000 passengers. Ensuing inspections discovered that more than 280 jets had been non-compliant, making approximately 15,000 flights before all issues were satisfactorily resolved. Each individual flight can count as a $25,000 violation.

While FAA spokesperson Alison Duquette declined to comment on the American Airlines investigation, the carrier did issue a statement: "[This] happened more than two years ago...We haven't received any notification by the FAA about any pending action, nor do we believe any action is warranted...[as American] has always maintained its aircraft to the highest standards." The airline also countered FAA accusations of shoddy maintenance by stating that the errors posed no safety threat. During the two years of sparring, American improved quality control and training for mechanics; the FAA found no major systemic shortcomings during an April 2009 special safety audit. Still, the agency, under Congressional pressure to enhance oversight, seemed determined to make American a scapegoat for industry maintenance issues, increasing its scrutiny regarding not just the MD-80s but everything from incorrectly overhauled Boeing 777 engine parts to fuselage scratches on Boeing 737s that supposedly weren't punctually reported.

But American isn't the airline under scrutiny. In March 2009, Northwest Airlines incurred a $1.5 million penalty for alleged failure to inspect heating wires in Boeing 757 cockpit windows, which could have led to smoke or fire. A previous order states that the planes should have been grounded until inspection, but the airline tallied more than 90,000 flights from late 2005 until 2008 when the oversight was discovered. In October 2009, the agency slammed US Airways with a $5.4 million fine (under appeal) for operating 62 total flights without required inspection of cargo doors and a cracked landing gear part. United still hasn't settled a $1 million fine assessed in June 2004 for operating a Boeing 777 on 263 flights after an inappropriately installed safety maintenance pin was found on all eight plane door emergency escape slides, rendering them unusable in the event of an emergency or evacuation.

Though the FAA does not release specific data on the frequency of violations, fines fall into several potential scenarios. Five of the more common violations are:

Maintenance violations: This seems to be the largest category, or at least the costliest. Duquette explains the first salvo is issuing an Airworthiness Directive, essentially ruling that a condition on an airplane is considered unsafe with additional maintenance required. "We say if you own this type of aircraft, we've seen this type of problem crop up, you need to fix it," she says. Sometimes there might be confusion about how the work should be performed, so "FAA inspectors make a concerted effort to get together with the maintenance and operations guys," according to Duquette.

Falsified maintenance records: Obviously, documenting that you fixed some of the Airworthy Directives when you actually didn't is an issue. Oregon-based Hillsboro Aviation learned that lesson in August 2010, when the FAA passed down a proposed $580,000 fine for falsifying maintenance records for the company's helicopters.

Installation of substandard parts: In October 2009, the FAA proposed a still-pending $3.8 million fine against United Airlines, accusing the carrier of operating a Boeing 737 aircraft on more than 200 flights in violation of maintenance procedures relating to one of its engines, endangering passengers and crew. On one aborted April 2008 flight, mechanics discovered that shop towels were covering openings in the oil sump area rather than the requisite protective caps.

Crew flying too many hours: The FAA bases the hours that a pilot can fly on fatigue science and findings on how time zone changes affect circadian rhythms. The current rules state that a pilot can no fly more than eight hours in a 24-hour period and must have eight hours of continuous rest. After whistleblowers came forward, the FAA investigated Gulfstream International Airlines and found that an antiquated system of manually transferring data led to over-scheduling crew. More than a million dollars in fines were levied.

Operational violations: This could include violating drug testing protocols for pilots and air safety crew. American Airlines came under fire in 2008 when the FAA proposed a $1.7 million dollar fine against the carrier for allegedly warning employees ahead of time about random tests.

There have been some major fines over the last couple years, yet while the multi-million dollar affairs get a lot of attention, the smaller fines are no less disconcerting. In July 2010, FAA proposed a $230,000 fine for Continental Airlines, alleging the carrier operated a Boeing 767 on 22 flights dating to August 2008 when an obligatory axle washer wasn't installed during maintenance, potentially causing the wheel bearing to fail. In April 209, regional Chautauqua Airlines incurred a $348,000 fine for purported operation of 11 regional jets between October 2007 and January 2009, covering 27,700 flights, without performing mandatory inspections, including one Embraer 145 jet that flew 43 days with a faulty inertial navigation unit.

You may be wondering why it takes so long for fines to be assessed. After the initial Airworthiness Directive, inquiries may be closed then reopened months later. Delays result from due process. "Our first concern is getting the problem fixed, which is usually done long before you read about civil penalties," says Duquette. "We'll conduct an investigation, examine data, interview people, look at the record, the airline conducts a back-and-forth dialogue, we propose a fine, then they can appeal." The latter can drag on for years.

Still, even the FAA has come under attack for insufficient oversight. A 2005 report by the Government Accountability Office found that the FAA didn't evaluate whether its partnership programs successfully decreased safety violations, and usually adopted administrative actions instead of fining airlines. A blue-ribbon panel convened in late 2008 at the Department of Transportation's behest determined that maintenance directives were often confusing and faulted the FAA for permitting vast variance in enforcement practices.

The finger-pointing will likely continue. But all parties agree that flying remains the safest form of transportation. The FAA and the airline industry have reduced the accident rate by 83 percent from 1998 to 2008. The number of airplane accidents is now one in 22.8 million flights, few of which involve fatalities. Civil penalties are arguably more symbolic than anything since infractions have usually been addressed. Indeed, Duquette stresses that potentially unsafe conditions don't automatically mean you're in danger. "If the FAA allows the airline to operate, it's safe."

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