After a partial government shutdown in December 2018 jeopardized an important business initiative for Southwest Airlines, federal regulators expedited their review process so the carrier could launch its new Hawaii service last year.
You and I might see this as a commendable display of initiative by government workers who wanted to provide effective service to address a real-world problem that they did not create. In doing so, they belied the stereotype of bureaucrats who believe red tape should be coddled, not cut.
Well, whoever first said that no good deed goes unpunished probably once worked in a state motor vehicles office or at the federal Department of Transportation. Sure enough, the Federal Aviation Administration’s effort to make up for lost time on Southwest’s behalf, and that of its customers, is the subject of an anonymous whistleblower complaint. (We’re hearing a lot about those lately.)
The accusation, if you can call it that, is that FAA officials abused their authority. (We have heard this before, too.) The Wall Street Journal reported that the complaint further accused officials of acting “for the financial benefit of the airline.” Which brings to mind the old “Seinfeld” line: “Not that there’s anything wrong with that.”
Except maybe there is, at least in the eyes of the agency that handles whistleblower complaints. The Office of Special Counsel staff “found a substantial likelihood of wrongdoing” by FAA employees, according to at least one document that the news outlet reviewed. Among the allegations are that FAA officials from outside the Dallas regional office were in the cockpit during demonstration flights. Southwest was required to undertake these flights before receiving permission to operate its twin-engine Boeing 737 aircraft on the long overwater routes between Hawaii and California. Dallas-based FAA employees, said to have more specific knowledge of the airline’s operation than the out-of-towners, were relegated to the passenger cabin.
This is particularly striking because other investigations of the FAA’s relationship and dealings with Southwest have accused its Dallas employees of being too comfortable with their airline counterparts, who are based in the same city. A draft Transportation Department audit report, also reported by The Wall Street Journal, alleged inadequate recordkeeping and a lax safety culture at Southwest that local FAA employees were too slow to confront. Southwest has disputed those findings, which were still unreleased at this writing. The airline took particular exception to the allegation that it is too casual about safety.
As greater context for these investigations, it is worth noting that Southwest is the domestic carrier that finds itself in the greatest straits due to the ongoing grounding of the Boeing 737 MAX aircraft after two disastrous crashes involving foreign carriers in late 2018 and early 2019. Those crashes have been blamed on design flaws in a newly introduced flight control system. The FAA did not ground the aircraft after the first crash, involving a Lion Air flight in Indonesia. And it was notably slow to respond after the second crash, of an Ethiopian Airlines jet, five months later. The two accidents killed a total of 346 people.
Southwest had the largest U.S. fleet of 737 MAX jets in service at the time of the grounding. It was planning to take delivery of many more in the 10 months that followed. So if the FAA went out of its way to help it launch that Hawaiian service using older 737 models, and if it allowed the airline to more smoothly integrate additional used aircraft into its all-737 fleet, such accommodation would be understandable.
Unlike the case of the 737 MAX jet, where it was clear within weeks of the Lion Air crash that both design and training issues needed urgent attention, it is not obvious from a distance that there is anything seriously amiss at Southwest – which is not to say that there is nothing that can and should be improved.
Yet the more urgent issue seems to be an FAA that can’t get its administrative act together enough to set intelligent priorities. The slow response to the emerging MAX crisis, and the wholly separate failure to address safety recommendations for commercial helicopters to avoid the sort of crash that killed Kobe Bryant and his companions last month, indicate an agency chronically afflicted by infighting and indecision. The disclosures reported by the Journal are newsworthy but don’t particularly suggest that the traveling public should change its behavior. I see no reason to pull my business from Southwest. And I have no choice but to rely on the FAA, despite its demonstrably shakier track record. The FAA needs to be accountable for its actions – or sometimes for its inaction – but it is worth keeping in mind that not every blown whistle indicates a genuine crime in progress.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
photo by Bill Wilt
After a partial government shutdown in December 2018 jeopardized an important business initiative for Southwest Airlines, federal regulators expedited their review process so the carrier could launch its new Hawaii service last year.
You and I might see this as a commendable display of initiative by government workers who wanted to provide effective service to address a real-world problem that they did not create. In doing so, they belied the stereotype of bureaucrats who believe red tape should be coddled, not cut.
Well, whoever first said that no good deed goes unpunished probably once worked in a state motor vehicles office or at the federal Department of Transportation. Sure enough, the Federal Aviation Administration’s effort to make up for lost time on Southwest’s behalf, and that of its customers, is the subject of an anonymous whistleblower complaint. (We’re hearing a lot about those lately.)
The accusation, if you can call it that, is that FAA officials abused their authority. (We have heard this before, too.) The Wall Street Journal reported that the complaint further accused officials of acting “for the financial benefit of the airline.” Which brings to mind the old “Seinfeld” line: “Not that there’s anything wrong with that.”
Except maybe there is, at least in the eyes of the agency that handles whistleblower complaints. The Office of Special Counsel staff “found a substantial likelihood of wrongdoing” by FAA employees, according to at least one document that the news outlet reviewed. Among the allegations are that FAA officials from outside the Dallas regional office were in the cockpit during demonstration flights. Southwest was required to undertake these flights before receiving permission to operate its twin-engine Boeing 737 aircraft on the long overwater routes between Hawaii and California. Dallas-based FAA employees, said to have more specific knowledge of the airline’s operation than the out-of-towners, were relegated to the passenger cabin.
This is particularly striking because other investigations of the FAA’s relationship and dealings with Southwest have accused its Dallas employees of being too comfortable with their airline counterparts, who are based in the same city. A draft Transportation Department audit report, also reported by The Wall Street Journal, alleged inadequate recordkeeping and a lax safety culture at Southwest that local FAA employees were too slow to confront. Southwest has disputed those findings, which were still unreleased at this writing. The airline took particular exception to the allegation that it is too casual about safety.
As greater context for these investigations, it is worth noting that Southwest is the domestic carrier that finds itself in the greatest straits due to the ongoing grounding of the Boeing 737 MAX aircraft after two disastrous crashes involving foreign carriers in late 2018 and early 2019. Those crashes have been blamed on design flaws in a newly introduced flight control system. The FAA did not ground the aircraft after the first crash, involving a Lion Air flight in Indonesia. And it was notably slow to respond after the second crash, of an Ethiopian Airlines jet, five months later. The two accidents killed a total of 346 people.
Southwest had the largest U.S. fleet of 737 MAX jets in service at the time of the grounding. It was planning to take delivery of many more in the 10 months that followed. So if the FAA went out of its way to help it launch that Hawaiian service using older 737 models, and if it allowed the airline to more smoothly integrate additional used aircraft into its all-737 fleet, such accommodation would be understandable.
Unlike the case of the 737 MAX jet, where it was clear within weeks of the Lion Air crash that both design and training issues needed urgent attention, it is not obvious from a distance that there is anything seriously amiss at Southwest – which is not to say that there is nothing that can and should be improved.
Yet the more urgent issue seems to be an FAA that can’t get its administrative act together enough to set intelligent priorities. The slow response to the emerging MAX crisis, and the wholly separate failure to address safety recommendations for commercial helicopters to avoid the sort of crash that killed Kobe Bryant and his companions last month, indicate an agency chronically afflicted by infighting and indecision. The disclosures reported by the Journal are newsworthy but don’t particularly suggest that the traveling public should change its behavior. I see no reason to pull my business from Southwest. And I have no choice but to rely on the FAA, despite its demonstrably shakier track record. The FAA needs to be accountable for its actions – or sometimes for its inaction – but it is worth keeping in mind that not every blown whistle indicates a genuine crime in progress.
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