Author: Polina Grushanskaya
In the last ten or so years the business world and Wall Street have seen much turmoil. Corruption among the corporate officers and their questionable practices have made people distrustful towards major corporations and big business, and rightfully so. Unfortunately the airline industry is no exception when it comes to being involved in scandals. Though no major ethics violations have occurred this year, 2007 and 2008 were quite bountiful in just that.
In 2007 a major airline company, Southwest Airlines, had violated the Federal Aviation Administration’s (FAA) safety regulations. The company had allowed for 59,000 flights to take place before realizing that they had not conducted proper inspections that were required by law. Eventually the company realized that they had done wrong, but rather than fix the issue then they instead allowed 1,452 more flights, still without proper inspection or maintenance, to take place under the company leaders’ orders. Southwest Airlines were not the only culprit in this situation; the FAA was just as guilty, if not more. The FAA officers were in close relationships with the executive officers of the airlines, and basically worked together to falsify safety records and suppress whistle-blower actions against either institution. Finally two whistle-blowers, from the FAA, came forward leading to an investigation and a lawsuit against Southwest Airlines, which was finally settled in 2010 when the company was made to pay $7.5 million for allowing unfit planes to fly against the safety protocols for consumer aircrafts.
Similar situation occurred with another big name company, American Airlines, in 2008. In this case the company was aware of the safety violations they were breaking, but still chose to defer maintenance for the air crafts that required it. This meant that the airline management put the crew and the passengers, their clients, at risk knowingly. This went on for years, making American Airlines the most cited and fined airline in the U.S. at almost $15 million. American Airlines was also involved in another unpleasant situation with the United States government, when it provided free airline tickets to several members of the House of Representatives. This is against House rules since American Airlines have a registered lobbyist, and this act can almost be seen as bribery. In all American Airlines has proven to be quite unethical in their business strategy, putting their marginal profit before the lives of their stakeholders, and the nation.
These are just a few ethical violations that have been uncovered in recent years, and some go as far back as 1973. With the whistle-blower protection act in action, one can now see the corruption cases coming up more and more often; cases just like the FAA and American Airlines one. Though the airline industry did face its scrutiny in 2007-2008, it seems like they have learned from their mistakes, and have been clear of wrongdoing in the last three years. The only question is: will it stay that way?