The US Department of Transportation recently fined Asiana for violating the Foreign Air Carrier Family Support Act of 1997 in the aftermath of the Flight 214 crash. The $500,000 fine assessed to Asiana received a considerable amount of press, and the DOT refers to it as precedent-setting. But the amount of the fine raises questions about the processes the DOT uses to determine the fines it will levy against airlines for particular violations.
For example, on January 15 of this year, the DOT assessed Qantas Airways a fine of $90,000 under the passenger rights protection regulations, for leaving passengers on flight 008 (out of Dallas/Fort Worth Airport with destination for Brisbane) stuck onboard the plane for five hours without informing them of their rights to deplane via a special announcement. Five hours stuck on an aircraft is a terrible inconvenience, but the proportion of that fine when compared to allegations against Asiana in the docket issued by the DOT is curious.
The docket indicates that Asiana failed to adhere to the regulations through three distinct violations. The first was its failure to “posses and implement a plan for publicizing a reliable, toll-free telephone number and staff to take calls to such number from families of passengers involved in aircraft accident.” The second was Asiana’s failure to “notify the families of passengers involved in an aircraft accident ‘as soon as practicable after the foreign air carrier has verified the identity of a passenger’.” The third was that “foreign air carriers must commit sufficient resources to carry out the [family assistance] plan.”
The rest of the docket makes for interesting reading. It goes into details of defense against these claims provided by Asiana, which included the fact that at the time of the crash “it was 3:28 a.m. Sunday” in Seoul, and that Asiana “had 12 employees on duty at SFC.” Asiana also indicate that it “relied on the assistance of a US airline partner”.
The net result for the passengers’ families was that they had no dedicated number to call for information until “18 hours and 32 minutes” after the crash. Until that time, they were told to reach the reservations line. As stated in the docket, they had to “navigate through cumbersome automated menus (there was no separate menu option for calls related to the crash) before being connected to an Asiana employee”. Further, Asiana took two full days to “successfully contact the families of just three-quarters of the passengers, several passengers were not contacted until five days following the crash”.
Five days, versus five hours, at just a little over four times the fine. Four times because Asiana received an offset of $100,000 on the $500,000 fine based on its “sponsoring multiple industry-wide conferences and training sessions in 2013, 2014, and 2015, to provide lessons learned”.
The DOT spokesperson we asked about the $100,000 credit indicates:
Asiana is responsible for ensuring that the conferences take place and for providing sufficient documentation of its expenditures to DOT’s Aviation Enforcement Office. By requiring Asiana to use a portion of the penalty to host industry-wide conferences to share with its competitors the hard lessons learned in responding to the crash at SFO, air travel consumers benefit directly. The carriers that attend the conferences will be able to use Asiana’s experience to better prepare to serve family members (and avoid violations of the law) in the rare event of an accident.
As there is reference to conferences and training sessions in 2013, we asked which took place last year, but the DOT spokesperson did not address this question in their response.
With regard to parity on the fine, compared to the Qantas fine as an example, the DOT spokesperson states:
A tarmac delay case such as the Qantas case is not comparable to the Asiana case. The Qantas case can be logically compared with other tarmac delay cases. The Asiana case was precedent-setting. In other words, there was no similar case to serve as a basis for comparison. Given the circumstances of the Asiana case, DOT believes that the $500,000 fine assessed to Asiana is appropriate.
The DOT explains its rationale for determining the number of the fine as follows:
The maximum assessed penalty for DOT economic/consumer protection fines is set by federal statute, subject to increase due to inflation. The general penalty provision for violations of Department orders and regulations is up to $27,500 per violation for all entities other than small businesses and individuals, in which case the maximum penalty is $2,500.
The Department is required to consider a variety of factors when we propose to enter into a consent order (a form of a settlement agreement that avoids the time and cost of a formal hearing before a DOT law judge) with an airline. Some of these factors are: the number of flights involved in the incident; the number of passengers on board; how long the violations continued, especially after the airline’s management became aware of them; the harm caused by the violations, as well as steps that the airline took to mitigate the harm; whether the violations were deliberate or inadvertent; the airline’s enforcement history (i.e., is it a repeat offender?); the airline’s ability to pay; the airline’s experience level (i.e., is it a new or established carrier?), the need to eliminate profits attributable to the violation; any valid excuses for the violations; and the culpability of other entities (e.g., the airport, another carrier, or a government agency).
When we asked about Asiana’s wording in the docket regarding the carrier’s agreement to the fine “in order to avoid litigation, and without conceding a violation..in compromise of penalties otherwise due and payable”, the DOT spokesperson indicated that “the penalty assessed against Asiana for violations of the family assistance law has no connection with any private litigation arising out of the accident”.
We reached out to attorney Jason Dickstein of Washington Aviation in Washington DC to shed some light. Dickstein has defended numerous airlines and manufacturers from charges and fines imposed by the FAA and DOT in the past.
He explains that the wording of liability may have referred to liability of Asiana with the DOT, had the agreement to the fine as defined in this Consent Order not been reached. An airline in Asiana’s position, he tells us, would have been wise to accept this fine in order to avoid having to appear before a DOT Administrative Law Judge (ALJ) to formally face these charges. The processes governing the judgment of ALJs might easily have resulted in significantly higher penalties for Asiana, as ALJs (often themselves former prosecutors for the DOT) have been known to issue some heavy fines to airlines in the past.
As to whether the fine imposed on Asiana is proportionate to the example we posed of the fine issued to Qantas for what is arguably a lesser offence, Dickstein agreed with the DOT that Asiana is an unprecedented matter whereas Qantas fine has precedent to judge against.
That said, he shared with us that the nature of DOT and FAA fines, how they are assessed to various specific violations, and how those violations are then combined in a particular case by the officer bringing the charges, can result in one party being fined at a significantly higher rate than another, even for a very similar offense. He explains this is all in the nature of the process. Because the representative DOT or FAA officers have “wide discretion” to determine what charges they will present.
As Dickstein tells us, the purpose of fines issued by both DOT and FAA is to discourage repeat offences, either by the same party or other parties. That airlines know they will be charged for violations and that those charges will be made public is often more important than what specific amount they are charged.
A credit issued against the fine for conference sponsorship and training, if exceptional, is not unheard of, Dickstein tells us.
As to whether acceptance of these fines clears Asiana of civil liabilities from law suits brought on by passengers and family members, Dickstein feels this is a grey area. It could be argued that the manner in which the docket is written, and that Asiana accepted the penalty without accepting the charges, would make it difficult to hold the airline accountable in civil court for these actions. In fact, that the charges were assessed and thus closed out, might make the Docket itself inadmissible in a civil lawsuit. That point is unclear and would require further study.
Whether the fine issued to Asiana is just, in the greater context of fines issued in our industry, and whether it serves to defend passenger rights and the best interest of their families, might still be an open matter for the public forum. For the DOT and for Asiana, the matter is closed.