Ethical Challenges of the Past

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?

Sources:

http://www.abcactionnews.com/dpp/news/local_news/investigations/investigation-into-%22deferred-maintenance%22-in-airline-industry#ixzz1Z159vea4

http://avstop.com/news/faa_american.htm

http://www.wired.com/threatlevel/2008/03/congress-faa-an/

Ethical Issues

Author: Greg Pape

Ethics in the Airline Industry stems from the safety of passengers. All around us, we see companies cutting corners to save a buck, sometimes at the expense of our safety. Every day we see a car company install a cheaper alternative in a car that turns out to be incredibly dangerous. Scarily enough, this happens in the airlines as well. As we all know, airplanes are very maintenance intensive modes of transportation. And overseeing this maintenance, is the FAA. The FAA makes sure that the appropriate maintenance and inspections are being done according to plan. In a recent case, FAA officials let over 60,000 flights take place without completing mandatory safety inspections prior to the planes takeoff. Although no incidents occurred, the safety of the passengers was still compromised.

Looking to the upper management, we can only hope that these actions were not sanctioned by them, and that the higher executives aren’t condoning such actions that would not only jeopardize the lives of so many people, but jeopardize the reliability, credibility, and ethical conscious of their company.

Whether it was to save time or money, or both, the FAA and (in this case) Southwest Airlines lacked the simple safety standards that all passengers expect from the airlines. And we can only hope to not hear news of another story like this for quite some time.

Article URL: http://online.wsj.com/article/SB10001424053111903639404576518813064469894.html?KEYWORDS=ethics+in+airline

Missions and Values

Author: Lisell Perez-Rogers

The mission statements of companies express the company’s goals and values. Most strive for customer satisfaction and opportunity for employee growth. Whether a company is providing a product or a service, their mission statement will revolve around the idea of providing nothing but the very best to their customers, employees, and community.

United Airlines states, “We are committed to providing a level of service to our customers that makes us a leader in the airline industry.” To make this goal achievable, United Airlines created what they call “Our Customer Commitment,” a list of twelve promises to their customers regarding policies and procedures for given situations. Some of these commitments include: “Advise about lowest available faires,” “Properly accommodate passengers with disabilities and other special needs,” and “Ensure responsiveness to customer complaints.”

Southwest Airlines clearly posts their mission statement on their website stating, “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”  Southwest also gives a separate mission to their employees. Southwest is “committed to providing our Employees a stable work environment with equal opportunity for learning and growth.”

American Airlines does not state one specific mission statement, but instead divided up its company into various parts including the environment, customers, community and employees, each with its own goals. The mission statement for its customers states, “We seek to earn customer loyalty by consistently meeting and exceeding our customers’ expectations.” The mission state for employees states, “We strive to make our company a good place for good people to work by devoting ourselves to creating and maintaining a safe, inclusive, and respectful work environment.”

Each company has its own mission. While they all have similar goals, they also have many differences. United Airlines focuses mainly on its customers and to ensure that their customers are 100% satisfied, it created “Our Customer Commitment” so that customers can understand in detail each promise of the company. United Airlines’ mission is very straightforward and professional. Southwest Airlines takes a more relaxed approach to their mission. While they still focus on customer satisfaction, they are just as focused on employee opportunity. Their mission is stated in a more casual wording than United Airlines, which customers may better relate to. American Airlines, like United Airlines has their mission divided so that customers can learn all of the details of the company’s goals. Like Southwest, American Airlines is also focused on employee growth and opportunity as well as customers.

All of the missions of the airlines show that their top goals are customer satisfaction and employee satisfaction. Satisfied employees means customers are more likely to be satisfied, and the airline industry realizes this. With so much employee-customer contact, if companies stopped caring about their employees the entire industry could be effected.

http://www.united.com/page/article/0,6722,1505,00.html?navSource=aboutunited&linkTitle=7customercommitment

http://www.southwest.com/html/about-southwest/index.html?int=GFOOTER-ABOUT-ABOUT

http://www.aa.com/i18n/aboutUs/corporateResponsibility/main.jsp?anchorEvent=false&from=Nav