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Airline Regulation - Essay Example

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The case of the 9/11 attack is a grim reminder that there is always a potential threat to American nation due to its political inclinations globally. Aside from the safety factor,…
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Airline Regulation
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Airline Regulation

Download file to see previous pages... The first major benefit the airline industry would gain would be the safety of its passengers. Section 601(b) of the FA Act specifies, in part, that when issuing certificates, the FAA shall give full consideration "to the duty resting upon air carriers to perform their services with the highest possible degree of safety in the public interest . . ." Why? Because safety is also related to profitability of an airline company! The first step would be to establish the fact that safety issue is not just about accidents, it is also about prevention. Accidents are few but they cost the company a lot of money in terms of insurance payment as well as bad publicity. In a study made by Mitchell and Maloney ( 1989) it was revealed that “found that share price falls can be attributed both to the projected future costs of higher insurance and to a brand name effect associated at-fault attribution “ ( qtd from. Button,1997 ). Bad publicity is bad marketing and people lose trust in a certain carrier that is involved with frequent accidents. If management wants to avoid costs, then it must pay attention to its safety programs. The best possible way to change the management’s view about safety is to make a presentation that would justify safety as a way to minimize future costs. I would ask a group of industry specialists on safety to present to the management the benefits of safety to our company and relate it to financial matters.
The only problem with the implementation of safety is that some airlines do get favorable treatment from the government. Popular participation from citizens such as lobbying in Congress as well as writing the government should put pressure to the government to be more tight in its monitoring and control of private airline companies. It is not evil to make profit out of rendering service, that is free trade. However, profit is not ...Download file to see next pagesRead More
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