Tuesday, December 22, 2009

DOT: $27,500 PER PASSENGER Fine for Long Delays. Total insanity.

In what is being heralded as a "Christmas Miracle" by some air travel watchdog groups, the DOT announced new fines for airlines that keep passengers on board an aircraft for longer than 3 hours after departure from the gate.

While we are not advocating that passengers should be kept on aircraft for long periods of time and deprived of basic necessities, we do worry that this arbitrary time limit will have a huge (and negative) effect on how airlines operate during periods of bad weather. Airlines don't intentionally keep people stuck in a tube for hours on end - it is clearly not in their best interests either. And a few of the incidents that have drawn widespread media attention (the Continental Express flight that spent the night on the tarmac in Rochester, Minnesota, for example) are so egregious that we agree something had to be done. But issues like the one in Rochester happened because of utter stupidity and the failure of the crew and airline to properly monitor a nasty situation - not because of malice or profit motive.

The new fine of $27,500 per passenger (which is going to the government, mind you, not the passengers sitting on board!) is arbitrary and capricious. I guess the DOT was trying to send a message, but they might want to check in with the FAA what is a reasonable fine. For example, lets assume a 228 seat 767 sits on the runway for 3 hours and 5 minutes waiting to take off. This would subject the airline to a $6,270,000 fine! In contrast, the FAA recently proposed fining United Airlines $3.8M for flying a 737 on over 200 flights with shop towels covering an oil sump area rather then the proper caps. And most FAA fines are reduced by half if the error is corrected and not repeated. So, a 3 hour delay costs over $6M but 200+ flights with rags in the engine costs ~$2M. This makes no sense. Ont top of that, no compensation goes to the passengers actually sitting on the plane. At least when an airline bumps you (under rules also set by the DOT) the compensation goes to the passenger, not the enforcement agency.

Further, because the fines are so large, airlines will be extra careful in ensuring the aircraft return to the gate in order to avoid these fines. Get ready for your next flight to be sitting in line waiting for takeoff on a snowy evening and after waiting for two hours or so, you head back to the gate. As such, you lose your spot in the queue, maybe the crew goes illegal, bags have to removed etc - you end up stuck in an airport. Some Christmas Miracle indeed.

Net/net, less passengers will make it to their final destination with this new fine.

This is a classic example of the government over-reaching into the operational aspects of a business for reasons beyond protecting the safety and welfare of citizens. Yes, something had to be done to prevent another Rochester, MN but this is not the answer. This is a cheap headline, hardly a "Christmas Miracle."


  1. Where exactly is the text of the rule that specifies the fine amount? I have searched and searched, and not found a single first-hand source that can confirm what the fine amount is and whether it is per passenger or per flight.

  2. Hi Blognnath- I've looked around and cant find the actual text either. Funny, because when I wrote the piece it was very clear. But, these comments today by CO's CEO seem pretty clear:


  3. http://fastlane.dot.gov/2010/03/capitol-hill-has-its-own-march-ritual.html