Monday, November 23, 2015

American Airlines: Scrutiny (2015)

American Airlines logo
American Airlines is currently the world's largest airline since its merger with US Airways, which initiated in December of 2013. The company, founded by C.R. Smith in 1934 and based out of Dallas, Texas, is currently under scrutiny due to a lawsuit filed by the airline's mechanics. The lawsuit was filed on behalf of mechanics based in Dallas and Chicago by the Transport Workers Union (the union representing the mechanics) in January of 2015. In the months leading up to the lawsuit filing, the FAA received several complaints from American's mechanics, alleging that "managers pressured its members to breach federal rules on aircraft maintenance, including wing cracks and inspections for suspected lightening strikes". Furthering the mechanics complaint is the fact that they are claiming after filing complaints with the FAA, that American Airlines management has retaliated against them through disciplinary action. The goal of this, the mechanics claim, was so that the airline could get the airplanes back into service as quickly as possible, so as not to lose revenue. The airline claims that the complaints are ridiculous, and are a direct result of strained labor relations between management and union representatives over disagreements regarding the merger with US Airways. The carrier responded to the complaints by saying that they have a great relationship with and exceed all of the regulations set forth by the FAA. However, American's proven history cannot back up this claim. In 2008, the carrier was fined 160 million dollars in civil penalties by the FAA for willfully violating safety procedures, which resulted in the grounding of the carrier's entire MD-80 fleet. This case, however, was dismissed in July of 2015 for unknown reasons.

Doug Parker, CEO of American Airlines
There were quite a few stakeholders in this case. American Airlines, according to the lawsuit, forced mechanics to jeopardize safety, which affects multiple different groups of people. The passengers, as well as the flight attendants and pilots that work on the aircraft are stakeholders because their safety is being jeopardized by being on an aircraft that did not have proper maintenance done on it. The mechanics who have filed the lawsuit are also stakeholders because they are being victimized by airline management and being forced to essentially break the law. It is federal law that airlines comply with all regulations set forth by the Federal Aviation Administration. If the mechanics are being forced to not comply with government regulations, then they are stakeholders as well.

The theory of Individualism is based on Milton Friedman's Economic Theory. The theory states that "the only goal of business is to profit, so the only obligation that the business person has is to maximize profit for the owner or stockholders". The actions of American Airlines would not be considered justified based on Friedman's economic theory of Individualism because even though the one and only goal of a business is to maximize profit, their actions to achieve that profit must be within the law. American Airlines is obligated by law to comply with all regulations set forth by the Federal Aviation Administration. By not complying with FAA regulations, the airline proved that "the focus of AA was to ensure that their airplanes were spending as little time in the hangar...In doing so, the airline compromised public safety (Skytalk)". This violates the law and therefore proves the airlines actions to be unethical from the standpoint of Individualism.

American Airlines mechanics John Giglio and Andrew Tepoele

Utilitarianism is an ethical theory that can best be described as maximizing long term happiness for "all conscious beings that are affected by the business actions (Salazar 19)". All actions of a business should focus on everyone's happiness. American Airlines' actions in regard to this case would not be considered ethical from a Utilitarian standpoint. Mechanics were "subject to increasing pressure to engage in unlawful and even fraudulent maintenance practices in order to keep [American Airlines] aircraft in revenue service (Skytalk)". Placing fellow company employees and the travelling public by disregarding safety practices and laws set forth by the FAA does not result in long term happiness "for all conscious beings"

Developed by Immanuel Kent and focused on four main points of acting rationally, helping others make rational decisions, respecting people, and ensuring all actions are driven by good will, Kantianism is focused around "good will". Business actions are judged using the Categorical Imperative Test to determine whether actions are ethical or not. The Formula of Universal Law "forbids all forms of deceit, including lying and stealing (Salazar PowerPoint)". It can therefore be determined that the actions of American Airlines would be deemed unethical from a Kantian perspective. "Throughout 2014, [mechanics] have experienced an ugly corporate culture that seems to emphasize pushing planes back into revenue service over all other considerations (Skytalk)". These are acts of deception, which is forbidden by the Categorical Imperative test. This results in the airlines actions being viewed as unethical from a Kantian perspective.

Virtue Theory
Virtue Theory was developed by Aristotle and is centered around four key virtues of honesty, courage, temperance, and justice. The theory focuses on "promoting wellness or flourishing of individuals in a society". The actions of American Airlines would be deemed unethical from Virtue Theory perspective. American Airlines clearly violates the two virtues of "honesty" and "justice". According to the lawsuit that the Transport Workers Union filed on behalf of the mechanics, American Airlines management pressured mechanics into violating the law, putting customers and crew at risk (Wall Street Journal). This particularly violates the "Fair Practices" and "Quality Product" aspect of the Justice Virtue because the company is not engaging in fair practices by exposing customers and crew to unsafe working conditions. Customers are also not receiving a "quality product" if they are flying on an improperly maintained aircraft. American Airlines actions are most certainly not ethical from a Virtue Theory standpoint.

Justified Ethics
An American Airlines plane mid flight
American Airlines acted knowingly and negligently in this case. No matter which ethical theory is applied to this case, every theory deems the actions of American Airlines management to be unethical. In another case similar to this, American Airlines was fined 160 million dollars in civil penalties in 2008 for similar FAA safety related violations. Apparently the company did not learn its lesson from this incident, as something very similar has just occurred with this case. Even though the airline is losing revenue when planes are out of service for maintenance, they are losing much more when the FAA fines them for breaking the law. The company really needs to reevaluate their management and emphasize more on safety. In the event that there were to be an accident because of willful neglect of the aircraft, the company would be facing enormous fines from the FAA as well as insurance premium increases, wrongful death suits, and lost business due to a poor safety reputation. You really cannot put a price on safety, and this is something that needs to be stressed a little bit more at American Airlines.


Airworthiness Directives-Current Only” Web. 20 October 2015

“History of American Airlines” Web. 19 October 2015.

“Mechanics Sue American Alleging Pressure to Commit Maintenance Fraud. Skytalk. Web. 18 October 2015.

“Unit of Mechanics Union Sues American Airlines” The Wall Street Journal. Web. 20 October 2015.

Salazar, Heather. The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business. Print.

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