Public Values

Self-regulation grounds US air travelers. Are Canadians next?

Aeronautics Act (C-7), now awaiting Third Reading, could be victim of Southwest and American Airlines debacles.

Self-regulation grounds US air travelers. Are Canadians next?by Ish Theilheimer

While US air travelers reel from shutdowns and cancellations due to airline self-regulation, Canadians could face similar problems, unless the US experience serves as a caution. If proposed changes to Canada's regulations affecting the airlines (Bill C-7) pass Third Reading in Parliament, airline safety will become more an airline responsibility and less a public one. With airlines under enormous pressure due to soaring oil prices, consumer and labour advocates say safety is likely to be compromised.

They point to Southwest Airlines and American Airlines as proof that self-regulation and a "cozy" approach to relations between regulators and those they regulate do not work.

This month Southwest was ordered to pay the largest fine in aviation safety history — $10 million — for gross and numerous airplane safety violations that were ignored or unreported. Planes had been allowed to fly in unsafe condition on the say-so of airline officials — not inspectors — under new federal "partnership" arrangements with the airline industry. As a result of the fine, the legal costs and the bad publicity, Southwest may not survive as a company, leaving hundreds without jobs and many of the areas its serves without air travel. The violations were only exposed because a group of company inspectors finally reported the abuses. At least two of the whistle-blowers received death threats.

According to a story in the Wall Street Journal the bad publicity may undermine the self-regulation trend. "Driven by budget and policy considerations, the Federal Aviation Administration wants to move further in the direction of allowing airlines to self-regulate their activities, with the FAA analyzing safety and maintenance data to spot trends. If the Southwest controversy casts lasting doubt on information coming from industry, this enforcement strategy could be threatened," it reported on April 3, in coverage of the Congressional transportation and infrastructure committee on FAA Safety Oversight of Airlines: Abuses of Regulatory "Partnership Programs".

CUPE researcher Richards Balnis told, "Essentially both in Canada and in the US, the regulated industry has a very cozy relationship with the regulator, whether it's Transport Canada or the FAA. Both regulating agencies are pursuing a strategy where if an airline detects a problem and voluntarily discloses it, there will be no punishment and no enforcement action taken."

Balnis said "The inspectors union is now very fearful that they will be auditing airlines' [reporting] systems, but they will not be inspecting planes. You can always create a paper trail," he says, to make scrutiny look more rigorous than it is. And simply finding out about a problem and telling the regulator about it doesn't mean it gets fixed, he said. "It's that culture of coziness that created the situation at Southwest."

In related news this week, American Airlines was forced to ground more than 1,000 flights to re-inspect wiring on MD-80 aircraft after the FAA questioned if previous re-inspections had been done properly.

Meanwhile in Canada, Bill C-7 is stalled in the House as it awaits Third Reading and passage into law and labour and consumer activists fight to stop it. The Aeronautics Act "will do for air safety what similar amendments over the last twenty years have done for marine and railway safety i.e. transfer primary responsibility for safety from Transport Canada to the industry itself, according to the Public Interest Advocacy Centre in a article.

"At the heart of the change is a move by Transport Canada to let airlines police their own operations," reports the Toronto Star. "Under this change, airline employees will be encouraged to flag safety concerns within their own organizations. If that information is gathered by federal inspectors, the legislation bans its public release, even under access-to-information legislation. And unlike cabinet confidences, which are made public after 25 years, the reports of safety concerns would stay secret forever."

Richard Balnis is dismayed with the results of governments getting out of airline inspection and enforcement. "I wouldn't dignify it by calling it a privatized system. I would call it trusting the industry," he says. "They say safety is our business, but they are under tremendous cost pressures to cut corners." Meanwhile, he says government is getting out of the business of regulation and government agencies are taking the attitude "just call off the inspectors."

Ish Theilheimer is the Publisher of

Privatization vs. Public Values Frame
  Self-regulation / Public accountability

Links and sources
  'Wall of secrecy' alleged over air safety reports, Toronto Star, January 16, 2008
  Bill C-7: An Act to amend the Aeronautics Act and to make consequential amendments to other Acts
  American Cancellations Top 1,000 As Wiring Re-Inspection Continues, Wall Street Journal, April 9, 2008
  FAA removes manager responsible for safety oversight of Southwest Airlines news, Aviation & Aerospace, April 9, 2008

Posted: April 09, 2008

  Public services
  Front lines
  Voices of privatization

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