Airline Stocks Soar as Passengers Suffer Record Fine for United
Tuesday, October 29, 2013
UAL Slapped with $1.1M Fine for Tarmac Stranding
FlyersRights has been awarded another victory by the federal government
thanks to the Department of Transportation (DOT) decision last Friday to fine United Airlines a record $1.1 million for more than a dozen tarmac delays last summer.
The delays took place at Chicago-O'Hare International Airport on July 13, 2012, when thunderstorms caused several ramp closures. The FlyersRights backed DOT rules prohibit U.S. airlines from allowing flights to remain on the tarmac for more than three hours at airports without giving passengers an opportunity to leave the plane, but 13 United flights exceeded the three-hour limit that summer day, the government said.
Some went over the limit by two minutes, and some by more than an hour, with lavatories out of commission on two United Express flights during part of the ordeal. A total of 939 passengers were grounded by the delays without the chance to deplane, according to DOT.
The airline won't have to pay the full $1.1 million fine. Less than half of the penalty -- $475,000 -- is due within 30 days, but the rest is credited to United, including $185,000 for compensation the carrier paid to passengers and $440,000 for the cost of improvements United will make at O'Hare International Airport.
"The good news is that it's a record fine," said Paul Hudson, president of FlyersRights.org. "They were, for the most part, either not fining airlines or giving very low fines... (so) it's good news, but it could be better news." Hudson was disappointed that only $185,000 was allocated as compensation to the impacted passengers, amounting to less than $200 per flier. He believes a fine of $10 a minute per passenger over the three-hour limit would be more reasonable compensation.
Hudson also pointed out that as large as the fine is, the government allows penalties of up to $27,500 per passenger for airlines that violate the tarmac delay rules, which would amount to a maximum fine of more than $25 million in this case.
He was also concerned that it's taking the government more than a year to investigate tarmac delay incidents, but called Friday's announcement a positive development.
"It's certainly a (step) in the right direction," Hudson said, adding that it's too early to tell whether United's punishment will help prevent similar incidents in the future.
"What's happening and will probably continue to happen is - unless there are some more attention-getting fines - is that airlines will make the calculation as to whether it's better to accept a fine of a few hundred thousand dollars or to obey the three-hour rule."
Washington, D.C. - Airline lobbyists will have an increasingly hard time pleading poverty when it comes promoting mergers and opposing consumer regulation in the coming months as airline stocks have skyrocketed on average over 100% in the past year.
An analysis by FlyersRights.org found that U.S. based airlines rewarded their shareholders with eye popping stock price increases in the past year.
Paul Hudson, President of the group, called on Congress and the DOT to step up to enact and enforce meaningful airline passenger protections, noting:
"Gotcha fees for everything, overcrowding, shrinking seats and legroom, reduced competition due to mergers, coupled with aviation security abuses, have accelerated the downward spiral of the air travel experience."
"It is high time for Congress to review the Airline Deregulation Act of 1978 that courts have interpreted to exempt airlines from all state and local consumer protection laws and for the US DOT to exercise its statutory power to prevent 'unfair and deceptive' airline practices."
US Flagged Carrier Stock Prices and One Year Increases from 10/25/12 to 10/25/13:
Question: Is there any energy growing for a national strike day against the airlines to declare our resistance to this insanity of making smaller seats when the nation is clearly larger?
How can we be so impotent as their customers? -S.B.
I see three possible approaches: 1. An emergency petition to the FAA/DOT asking for a moratorium on any seat reductions while the safety and comfort is investigated and new regulations can be adopted, b) a boycott of airliners and perhaps who use them, c) an online petition demanding Congress and the airlines to stop this new assault on passenger safety, health, comfort and convenience.
I remember a time (it was brief) during the late 1960's when airlines provided live entertainment on their cross flights. Yes, live bands! After that ended, they would have an electric piano next to the stand up bar for anyone to play. I'm a musician and spent one flight from NY to LA playing the piano. It was so much fun. Never did I imagine that we would become the police state that we are now, starting with air travel. On a lighter note (pun intended), you deserve a thousand cheers for your work!
With Much Appreciation,
Follow up imagery from last week's "Slimline" Squeeze Play newsletter:
Kate Hanni, founder of FlyersRights
Paul Hudson, president of FlyersRights
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We are commited to solutions for promoting airline passenger policies that forward first and foremost the safety of all passengers while not imposing unrealistic economic burdens that adversely affect airline profitability or create exhorbitant ticket price increases.
All American air carriers shall abide by the following standards to ensure the safety, security and comfort of their passengers:
Establish procedures to respond to all passenger complaints within 24 hours and with appropriate resolution within 2 weeks.
Notify passengers within ten minutes of a delay of known diversions, delays and cancellations via airport overhead announcement, on aircraft announcement, and posting on airport television monitors.
Establish procedures for returning passengers to terminal gate when delays occur so that no plane sits on the tarmac for longer than three hours without connecting to a gate.
Provide for the essential needs of passengers during air- or ground-based delays of longer than 3 hours, including food, water, sanitary facilities, and access to medical attention.
Provide for the needs of disabled, elderly and special needs passengers by establishing procedures for assisting with the moving and retrieving of baggage, and the moving of passengers from one area of airport to another at all times by airline personnel.
Publish and update monthly on the company’s public web site a list of chronically delayed flights, meaning those flight delayed thirty minutes or more, at least forty percent of the time, during a single month.
Compensate “bumped” passengers or passengers delayed due to flight cancellations or postponements of over 12 hours by refund of 150% of ticket price.
The formal implementation of a Passenger Review Committee, made up of non-airline executives and employees but rather passengers and consumers – that would have the formal ability to review and investigate complaints.
Make lowest fare information, schedules and itineraries, cancellation policies and frequent flyer program requirements available in an easily accessed location and updated in real-time.
Ensure that baggage is handled without delay or injury; if baggage is lost or misplaced, the airline shall notify customer of baggage status within 12 hours and provide compensation equal to current market value of baggage and its contents.
Require that these rights apply equally to all airline code-share partners including international partners.