AA, AMR subs agree to $24.9M in FAA fines

[WorldTraveler]

- largest FAA fine ever against a single carrier.
- includes M80 "debacle"
- includes AA, AE, Executive, and Eagle Aviation

American spokeswoman Andrea Huguely said the airline was pleased with the agreement.

http://www.dallasnews.com/business/airline-industry/20130509-american-airlines-3-subsidiaries-to-pay-24.9-million-penalty-to-faa.ece

 

[eolesen]

I'm sure Ralph or someone else will be along to lay blame as to why the fines were issued, but this is a pretty good settlement ---- they mitigated it down to about 15% of the proposed fine amounts.

If the remaining 19.3M gets paid out in new stock as opposed to cash, that's an even better deal.

 

[Glenn Quagmire]

If the remaining 19.3M gets paid out in new stock as opposed to cash...

How could that be done, and what would that transaction look like?

 

[Bob Owens]

How could that be done, and what would that transaction look like?

That means we get to pay the fine instead of the company.

 

[1AA]

The company would rather spend the money instead of investing it in their employees.
I am sure from past experience AA would have fought harder to have it reduced to a mere sum compared to only a 15% reduction.

 

[jimntx]

Just another example of why no one--especially passengers--takes the FAA seriously.

 

[eolesen]

The company would rather spend the money instead of investing it in their employees.
I am sure from past experience AA would have fought harder to have it reduced to a mere sum compared to only a 15% reduction.

It was an 85% reduction. And, the company spent $50M internally on training and other safety related expenses which is part of the rationale used by the FAA to reduce the fines (which is quite typical).

Had the $24M been spent on the employees, it would have come out to about $500 per employee before taxes... not quite enough for mother to be able get that operation that keeps getting put off...

 

[AANOTOK]

It was an 85% reduction. And, the company spent $50M internally on training and other safety related expenses which is part of the rationale used by the FAA to reduce the fines (which is quite typical).

Had the $24M been spent on the employees, it would have come out to about $500 per employee before taxes... not quite enough for mother to be able get that operation that keeps getting put off...

Romney say's $10,00, you say $500 E, to your kind it's wishing well money. To some of us peons, it is real money that could come in handy. Your candor says so much about you E!

 

[eolesen]

Would you prefer AA had handed over the full $162M? How would that have helped anything?

 

[FWAAA]

How could that be done, and what would that transaction look like?

The same as all the other claims that will be paid when AA exits Ch 11. AA's plan of reorganization proposes to pay claimants in shares of new AA stock. For example, if the new stock is worth about $19.30 per share, then the POR would allocate about one million shares of new stock to the FAA. The FAA could then sell the stock.

That means we get to pay the fine instead of the company.

I'm not sure whom is included in your use of the word "we" but the reality is that all AA creditors and claimants will share in payment of this $19.3 million. The "company?" The company is owned by the employees and other claimants.

I realize that AA's mechanics might place 100% of the blame for the MD-80 wiring mess on management, but had AA's mechanics simply followed the manual and measured the wiring wraps precisely (you know, that attention to detail that I mentioned last week), there would have been no MD-80 grounding and no fines. AA's management and AA's skilled maintenance staff screwed up.

The best part is that AA's pilots and FAs are sharing a disproportionately large part of this fine (compared to the TWU mechanics) as those workgroups are blameless - the pilots and FAs weren't mis-measuring the distance between the wiring wraps.

You keep talking about striking, but the NMB refused to cooperate. Sloppy maintenance looks like an effective strategy for shutting down part of the airline and costing tens of millions of dollars worth of revenue - mechanics fail to follow the printed maintenance procedures, the FAA gets wind of it, 300 planes are grounded pending inspection and replacement of the "out of spec" wiring wraps, and "the company" pays a fine to the FAA.

 

[OldGuy@AA]

If you only knew.......... These MD80 acft were checked by mechanics and inspectors. In some cases they found the wire bundles less than 1/10 of an inch off. They re-tied them and the FAA inspectors okayed them. Some of these were flown to other line stations where different FAA inspectors grounded them again! In the first place there has never been an incident because wire bundles were tied off 1/10 of an inch from what the Maint. Manual called for. In the second place, since all this maintenance has been send overseas, the FAA feels the need to look extra hard at AA maintenance. Their budget depends on fines imposed so in the absence of all this stuff being flown to South America or Asia, the AA fleet is an easy mark. The blame on this one belongs to the FAA themselves. The wire bundles were NEVER a safety issue. But the FAA couldn't fine us so much if it wasn't. There were several teams from Tulsa sent system wide to correct these "Safety Issues" and they all said the same thing. The FAA inspectors didn't know "Come here" from "Sic em" and it was as if they were instructed to write these things up no matter what measurements were taken. Shame on AA for agreeing to pay any fine. But then again.......... They won't have to pay will they?

 

[robbedagain]

oldguy if aa had that done with outsourced maintaince and it was ok by other includin the faa... then what about all of the other maintaince work done by those same companies for all of the other us air carriers and the faa ok them.. sounds to me select faa idiots were just after aa the way it sounds. i remember when they grounded the md 80 but why not dl with their vast fleet of md 80s?

 

[FWAAA]

If you only knew.......... These MD80 acft were checked by mechanics and inspectors. In some cases they found the wire bundles less than 1/10 of an inch off. They re-tied them and the FAA inspectors okayed them. Some of these were flown to other line stations where different FAA inspectors grounded them again! In the first place there has never been an incident because wire bundles were tied off 1/10 of an inch from what the Maint. Manual called for. In the second place, since all this maintenance has been send overseas, the FAA feels the need to look extra hard at AA maintenance. Their budget depends on fines imposed so in the absence of all this stuff being flown to South America or Asia, the AA fleet is an easy mark. The blame on this one belongs to the FAA themselves. The wire bundles were NEVER a safety issue. But the FAA couldn't fine us so much if it wasn't. There were several teams from Tulsa sent system wide to correct these "Safety Issues" and they all said the same thing. The FAA inspectors didn't know "Come here" from "Sic em" and it was as if they were instructed to write these things up no matter what measurements were taken. Shame on AA for agreeing to pay any fine. But then again.......... They won't have to pay will they?

You're not telling me anything I didn't already know. You're preaching to the choir. Nothing about the 2008 MD-80 fiasco had anything to do with airworthiness or safety. Very little about the FAA's inspections and penalties have anything to do with actual safety. For the most part, the FAA strings up airlines by their own language - didn't AA engineers write the specs that were adopted by Boeing for these wiring wraps? And then some FAA inspectors caught AA not following their own specs. The failure was inconsequential as safety was not compromised. But far too many people think: "AA management and mechanics failed to do something this simple - like follow ther own specs - what else are the failing to do with respect to maintenance?"

But nothing about that fiasco can be pinned on the pilots or FAs or fleet service or agents, yet they all get to help pay (along with all the other AA creditors) for management's failure to demand that AA's mechanics stick to the script without any deviation. And some mechanics' failure to pay strict attention to detail when performing the task.

If it's supposed to be one inch, and not 0.95 inches and not 1.05 inches, then the only acceptable outcome is that every single example measure out at exactly 1.0 inches. That ain't rocket science - it's simply attention to detail. AA managers and AA mechanics failed, and the FAA found out. Most of the time, that's gonna cost the airline some $$$.

 

[eolesen]

For the most part, the FAA strings up airlines by their own language - didn't AA engineers write the specs that were adopted by Boeing for these wiring wraps? And then some FAA inspectors caught AA not following their own specs.

Absolutely correct from my experiences. The FAA doesn't write AA's procedures or specs. They just enforce them.

Every fine I was involved in investigating had to do with non-compliance in what AA had submitted in their OpSpecs.

One of the most common violations: closing the door with overhead bins open. It's hardly a safety risk if the airplane isn't moving, but since AA's procedure is to have bins closed before door closure, it was an easy one for a FAA inspector to pick off.

Same thing with weight and balance, although we rarely had fines there since we self-disclosed just about everything which was outside a window weight...

 

[WorldTraveler]

I haven't seen anything that says that the FAA will accept stock in lieu of cash... that's why US currency says "In God We Trust - all others pay cash."