Some airlines intend to cancel flights to avoid fines
The CEO of Continental Airlines told investors yesterday that his airline would cancel flights to avoids fines of up to $27,500 per passenger. Who can blame him? At that rate, a fully-loaded MD-80 would cost $4 million in fines under new Transportation Department rules that go into effect next month. What’s going on here?
Well, the fines are a response to the flight delay horror stories of the past two or three years. You know, the ones where planes sat on a tarmac for hours with no water, overflowing toilets, etc. Heck, I’d be furious too if that happened to me. The passengers demanded that the government do something. The government did something. Adopted new rules that provides for potentially big fines. However, the fines are so big that the risks of being fined at the maximum amount outweigh the benefit of an airline putting itself in a position to be fined.
What will happen in the future? There will probably fewer horror stories of delays and a few more cancellations. But when passengers feel that the flight should not have been cancelled they will clamor for more government regulation.