DOT fines are laughable. It is like “the emperor has no clothes!”
Why is airline customer service so bad? Part of the reason is the paltry DOT fines assessed against the airlines for breaking the Department of Transportation (DOT) rules. Last year, DOT fined the three network carriers a total of $1.44 when compared to the average US family income. For the US airline industry in total, DOT fines assessed were only $3,215,000, which would be the same as fining the average American household about $2.05.
Note: This $2.05 is the total of assessed DOT fines for all airlines operating in the USA. If the average American family was only assessed $2.05 for every speeding, parking, and moving violation, would they obey parking laws and speed limits? Probably not.
The Department of Transportation Enforcement Office, the country’s primary regulator, policeman, judge, and jury when it comes to almost all regulatory issues between passengers and airlines, only fined the three largest network airlines in America — American, Delta, and United — a total of $4.50 when compared to the average $80,000 household income in the United States. DOT’s enforcement has no teeth.
American Airlines, Delta Air Lines, and United Airlines made a total gross income of $121.1 billion with a net profit of $7.6 billion.
- American Airlines brought in $42.2 billion with a profit of $1.9 billion and total DOT fines of $250,000
- Delta Air Lines brought in $41.2 billion with a profit of $3.6 billion and total DOT fines of $410,000
- United Airlines brought in $37.7 billion with a profit of $2.1 billion and total DOT fines of $80,000
Travelers United has taken the total income of the airlines and divided it into the DOT fine amounts. Total DOT fines came out to $3,215,000. Later, we compare those fine percentages against the average annual US household income of $80,000.
American Airlines was assessed a DOT fine of $250,000 for “failing to timely process refunds for air transportation with credit cards.” This would be the equivalent of fining the average American household only 59¢.
In 2017, Delta Air Lines was fined a total of $410,000 in 2017 by the Department of Transportation for various violations. The total fines assessed against Delta Air Lines were $410,000. These total fines registered at .0000099 percent of their total income or .0001146 of their profits. The Delta Air LInes total 2017 fines were the equivalent of an 80¢ fine for the average American household.
Delta’s fines included:
- a DOT fine of $200,000, the equivalent fine of 38¢ for the average American household, for misreporting mishandled baggage,
- a penalty for $120,000, the equivalent fine of 29¢ for the average American household, for misreporting the transportation of animals,
- a DOT fine for $90,000, the equivalent fine of 21¢ for the average American household, for failing to provide passengers food during a tarmac delay situation on four separate flights during July 2017.
United Airlines, the most glaring deviant in the airline world when it comes to passenger protections and customer service after the infamous Dr. Dao “denied boarding” incident, was fined the least. United was not fined at all for that ignominious action of roughing up a paying customer to make room for flight attendants the airline wanted to get to Louisville. DOT noted that it was not the airline that caused the damage to the passenger and therefore the airline had no responsibility. This incident and its aftermath still churn unpleasantly at Travelers United.
However, United Airlines received a DOT fine of $80,000 for failing to properly report the death of animals aboard its flights. This error made United Airlines appear to be twice as effective at transporting animals without incident. The total United Airlines fine for 2017 was the equivalent of a 17¢ fine for the average American household.
For the airlines that is less than pocket change. According to the Washington Post:
The DOT fines are important because, thanks to federal preemption, airlines are protected from enforcement actions by individual states. You can only sue an airline in federal court or small-claims court. The Aviation Consumer Protection Division is often passengers’ first, last and only hope for resolving problems.
If airlines were fined like the normal American public…(based on percentage of total income)
Travelers United calculations comparing various fine percentages of gross household income vs. airline gross income revealed the following figures based on last year’s total airline income for American, Delta, and United.
- A $25 parking fine for the average American household would be equal to an airline DOT fine of about $12,000,000.
- A $150 average US speeding ticket would mean the DOT fines should be between $70 to $80 million.
- An IRS $100 fine for misreporting income from a Form 1099 would net DOT fines of around $50 million.
Even if the 2017 fines were based on the 8.5 percent profits of the US airlines, DOT fines would range from $1,000,000 for the equivalent of a $25 parking ticket to $6.8 million for the equivalent of a $150 speeding ticket.
Let’s get some teeth into our airline enforcement penalties and let’s start letting the public know the full cost of travel, the compensation available for passengers, and the basic passenger regulations about denied boarding, lost/damaged/delayed baggage, and airline international delays.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 12 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.