Thursday, September 2, 2010

The Cost of Non Compliance in Aviation

Aviation is a very regulated industry and regulatory authorities keep a close eye on how operators, repair agencies and manufacturers conduct their business.

The FAA has the capability under the law to levy fines from organisations that do not comply and this includes foreign organisations operating in the USA. Airlines in the USA are very aware of the cost of non compliance; just a few days ago AA was slapped with a USD 24.2 million fine for not handling an Airworthiness Directive on the MD80 two years ago. The FAA actions are not limited to fines but will follow the same course of action outlined below.

Airlines operating under different regulatory regimes tend to forget that their actions or usually inactions carry a cost, maybe not in the shape of a fine but it can be massive. The wrap on the knuckles is what everyone expects, but it may go way beyond that. .
  • It starts from the suspension of a license of a technician or a pilot, which may cause a hiccup in a schedule; or
  • The grounding of an aircraft or more or the withdrawal of equipment which really disrupts a daily schedule; or
  • The suspension of an Air Operator Certificate (AOC) or an Aircraft Maintenance Organisation (AMO) certificate for a period until rectifications are made; or
  • Ultimately the AOC or AMO is revoked.
The cost is massive and it goes up to the point of going out of business.

So the next time a request for manpower or for funding for maintenance or operations comes up, it should not be rejected or reduced out of hand, based on the direct cost, but take the time and run a risk assessment based on the cost of non compliance and then make up your mind.





Labels

1 Goal 2010 2012 2013 9/11 AA Abu Dhabi ADAC Air Arabia Air Canada Air India Airberlin aircraft airlines airports ambitions American Airlines Amman aviation AVOD AWST B707-300C B767 B777 B787 BA Bahrain Bahrain Air BangaloreAviation Boeing branding British Airways Business Aviation Cabin Crew Canada change chapter 11 CO Commercials communication community compliance contingency continuity Continuous Improvement cost effective creativity Culture curricula Customer Service Delta Detroit Metro DFW Doha DTW Dubai Dubai Air Show DWC efficiency emergency Emergency Response Emirates employees environment ET409 Etihad ETS EU FA FAA family Flight Attendants flight(s) Flightglobal flydubai GACA Galaxy Tablet GAMCO GCC globalisation GOL Greece Green Gulf Air Hala Hamburg happy health home Hopenhagen Human Resources IFE India Iran Iraq Iraqi Airways Jaffa Jazeera Airways Jet Airways Jordan Just Culture Kuwait Airways LA LCC leadership low cost maintenance management manpower MEA MEBAA MENA Michigan motivation MRO MROAM Oneworld Palestine passengers passion people Philadelphia planet earth Privatization professional QAIA Qantas Qatar Qatar Airways Quality Quick Service Restaurant Radio Repair Stations Risk road roots ROTANAJET Royal Jordanian Safety Sanctions. Sao Jose Dos campos SAT Saudi Arabia Saudi Arabian Airlines Security Sharjah Airport SimliFlying Simplicity SKYTEAM SMS social media Southern California Southwest Airlines Star Alliance Sudan Airways support target teachers Technology terrorism tolerance Toulouse tourism traffic Training transition travel TSA Turkey Twitter UA UAE UBM US Airways VIA Rail Violin Vision volcanic ash Wataniya Airways
 
Top Blogs
Powered By Invesp