Eastern Says Its FAA Fine a Sign to Industry

The Federal Aviation Administration rejected Eastern Airlines’ offer to pay a $3.5-million compromise fine for more than 78,000 alleged safety and rules violations because the public thinks that the agency is too cozy with the industry, Eastern’s top executives said Monday.

The reason that Eastern was slapped with a $9.5-million fine, the largest in aviation history, was to reassure the public that the overall airline industry will be made safe after its deadliest year, Chairman Frank Borman said.

Borman said he told FAA Administrator Donald Engen that he would pay $3.5 million immediately if the FAA would suspend another $6 million in proposed fines for 78,372 alleged violations.

Court Fight Vowed

Bob Buckhorn, a FAA spokesman in Washington, declined to comment on Eastern’s offer, but he said the agency plans to have the Justice Department sue if the fine is not paid by Friday. Eastern also has vowed to go to court to avoid paying the fine.

The fine is for maintenance and record-keeping violations that the FAA uncovered earlier this year. Technically, the FAA has fined Eastern $78 million ($1,000 for each violation) but will accept the reduced fine if the carrier pays before Friday.

In a meeting earlier this year in Washington with Engen, Borman said he was told that the fine was necessary.

“Engen said, ‘The pressure is high to make certain the airline industry is safe.’ And in the best interest of his staff, he couldn’t reduce the fine,” Borman told reporters during a 2 1/2-hour news conference Monday that Eastern called to refute the charges.

Last year was the worst in aviation history, with 1,622 deaths attributed to airline crashes around the world. Of those, 526 fatalities occurred in the United States.

Disagreements Over Allegations

The FAA gave Eastern the deadline for payment last week after Borman told the agency that the airline, the country’s third largest, would not pay because of disagreement over many of the allegations made by FAA inspectors. Many of those involve improper record keeping, but FAA officials said some also involved improperly deferred maintenance, instances of planes flying without the minimum required equipment and inadequate response to other FAA directives.

Borman admitted that Eastern was guilty of some record-keeping violations but disputed the agency’s method of calculating the fine. He also maintained that Eastern planes are safe but that negative publicity has hurt the carrier and caused a 1% to 2% drop in sales.