Continental Airlines faces $27,500 fine in tarmac stranding incident

ejetThe Transportation Department this morning a sent a letter to Continental Airlines inquiring into the circumstances of its recent Continental/Express Jet flight 2816 extended delay. So what’s next? I asked Transportation Department spokesman Bill Mosley.

You’ve sent a letter to Continental, asking for details on the ExpressJet Airlines flight 2816 tarmac delay. What kind of sanctions are available to the department for keeping passengers on a plane for nine hours?

If the airline has violated its contract of carriage or customer service commitments, DOT could pursue enforcement action alleging that the carrier engaged in an unfair and deceptive practice in violation of 49 U.S.C 41712. If violations are proven, the carrier would be subject to a cease and desist order and civil penalties of up to $27,500 per violation.

The Transportation Secretary has said he takes the rights of airline passengers seriously. The department has fined five airlines for infractions that range from airfare disclosure to codeshare violations in the last month. Yet some have pointed out that the fines are relatively small, and half of the amounts are forgiven if there are no future violations. Are these just warning shots, and do you intend to impose heavier fines for future violations?

We do not consider five- and six-figure paid civil penalties to be warning shots. Moreover, penalties to be paid are not being forgiven; rather, penalties to be paid are automatically doubled in some cases for additional future violations. Importantly in those cases, any such new violations not only double the original civil penalty that must be paid, but can result in a separate enforcement case.

The Senate version of the FAA Reauthorization Bill contains a three-hour time limit for aircraft on the ground. In your opinion, is such a limit necessary?

The administration has not taken a position on the Senate tarmac delay provision in the FAA Reauthorization bill.

Many travelers have expressed their frustration with so-called a-la-carte fees charged by airlines. They believe the government must draw the line somewhere, when it comes to what is — and isn’t — included in the price of an airline ticket. Do you believe a line needs to be drawn, and if so, where?

The government cannot regulate the amount of fees that airlines can charge. However, DOT can take enforcement action against airlines that do not disclose their fees and has taken such action in the past.

What benefits do you feel passengers gain from airline alliances? Specifically, I was wondering about the Department of Justice recommendation against antitrust immunity for airlines. Your department did not go along with that. Can you help me understand why?

Over a period of more than 15 years, DOT’s actions to approve and grant antitrust immunity to certain airline alliances have resulted in numerous public benefits.

Pro-competitive alliances develop new direct international routes, increase frequency of service, and expand capacity. They lower fares for consumers at the margin and increase the number of routings, which are benefits that consumers value, especially on long-haul international flights. The airline alliances that pass DOT’s rigorous analytical process – guided by statute – preserve competition among domestic networks and the jobs that go with them.

Antitrust immunity remains a tool that can be used judiciously, given the complicated legal restrictions such as strict ownership and control laws that govern the airline industry. As such, there has been bi-partisan Administration and Congressional support for the policy since 1993.

DOT’s statutory mandate is broader than DOJ’s. Thus, DOT’s analysis includes, but goes beyond, DOJ’s analysis to take account of factors such as network effects and foreign policy. Recent comments filed by DOJ expressed reservations about the use of antitrust immunity but focused on appropriate remedies. The comments were fully considered and addressed by DOT.

(Photo: caribb/Flickr Creative Commons)

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