AMR’s American Eagle Fined $900,000 in First Delay Penalty

AMR Corp. (AMR)’s American Eagle regional airline agreed to pay $900,000 for stranding passengers on 15 planes for more than three hours on Memorial Day weekend, the first penalty levied under the U.S. tarmac-delay rule.

American Eagle’s delays at Chicago’s O’Hare International Airport affected 608 passengers, a Transportation Department investigation found. The carrier, a unit of Fort Worth, Texas- based AMR, was late in using a procedure developed to bring travelers to the gate, the department said in a statement yesterday.

“We put the tarmac rule in place to protect passengers, and we take any violation very seriously,” Transportation Secretary Ray LaHood said in the statement. “We will work to ensure that airlines and airports coordinate their resources and plans to avoid keeping passengers delayed on the tarmac.”

The investigation and settlement negotiations took about four months, “a relatively short time to conclude such an important, precedent-setting case,” Bill Mosley, a Transportation Department spokesman, said in an e-mail today.

The department is investigating incidents Oct. 29 at Bradley International Airport near Hartford, Connecticut, in which JetBlue Airways Corp. (JBLU) stranded passengers on planes at for as long as 7 1/2 hours during a snowstorm. Data about that and other delays in the area won’t be available until early next month, Mosley said.

Weather Blamed

American Eagle, in a statement yesterday, attributed the May 29 delays to a weather system and airport congestion. Runways were closed three times that day due to lightning, Tim Smith, an AMR spokesman, said in an e-mail in July after the delayed flights were listed on the Transportation Department’s monthly consumer report.

No other airlines violated the three-hour delay rule that day, according to department data. AMR’s American Airlines operates a hub at O’Hare.

“American Eagle is absolutely committed to the safety of our customers and employees, and regrets the inconvenience these delays caused,” Eagle Chief Executive Officer Dan Garton said in a statement. “We take our responsibility to comply with all of the department’s requirements very seriously and have already put in place processes to avoid such an occurrence in the future.”

Vouchers Offered

American Eagle must pay $650,000 within 30 days, according to a Transportation Department statement. As much as $250,000 can be credited for refunds, vouchers and frequent-flier mileage awards provided to travelers on the 15 flights on May 29, as well as to passengers on future flights that experience lengthy tarmac delays of less than three hours.

Money from the fine, minus the travel credits, goes to the general fund of the U.S. Treasury, Mosley said.

The airline, in its statement, said it apologized to affected customers, offered frequent-flier mileage credit to members and provided vouchers to non-members to use toward future travel.

The tarmac-delay rule was created after incidents in which passengers weren’t allowed to get off planes that didn’t have food, water or working lavatories. It took effect in April 2010 and subjects airlines to fines of as much as $27,500 per passenger. The rule was expanded to non-U.S.-based airlines in August.

Fewer Delays

The Transportation Department investigates every tarmac delay of more than three hours, Mosley said. Fifty-four flights between May 2010 and September 2011 fell into that category, he said.

Exceptions to the delay limits are allowed only for safety, security or air traffic control-related reasons, the department said in a statement. The department also probes consumer complaints even if they do not allege a violation of the three- hour rule, Mosley said.

The rule has made it more likely that airlines will cancel flights before delays reach three hours, according to a study released by the Government Accountability Office in September.

To contact the reporters on this story: Julie Bykowicz in Washington at jbykowicz@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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