Profits Cannot Rule Over Safety

After the crash of Alaska Airlines Flight 261, the company hired a group of aviation experts to assess the carrier’s “safety culture.” The experts released their report July 6.

Like most reports that contain bad news, it starts with something positive. Overall, it says, Alaska Airlines employees are skilled professionals dedicated to airline safety.

Then the experts get down to business:

Employee morale is low. (The report says “can be improved…”)

Leadership is seen as weak. (“Perceptions of leadership and supervision effectiveness … will be strengthened…”)

Workers, including managers and supervisors, are given more than they can handle. (“Staffing levels in many areas appear to be disproportionately low…”)

Their findings were similar to those of the Federal Aviation Administration, which in early June threatened to shut down the airline’s heavy-maintenance facilities. Even now, FAA inspectors must approve all major work.

So how might skilled, dedicated professionals end up overseeing questionable procedures?

To survive, corporations must minimize costs. They use strategies so familiar they have almost become cliches: streamlining, downsizing, outsourcing and multitasking. They encourage employees to “do more with less.”

These strategies can increase corporate efficiency, and publicly held companies like Alaska Airlines must be as efficient as possible. In fact, they have a legal obligation to their shareholders to maximize profit.

Profit is good. It is the fuel of capitalism. The current market boom has created real wealth, which has spurred consumption and further investment, which creates jobs and helps sustain a high and rising standard of living. That’s the way it’s supposed to work.

Unfortunately, companies sometimes are blinded by their drive for profit, or by the difficulties of vicious competition.

Though the government sets airline safety standards, it hasn’t regulated routes or fares since the early 1980s. Airlines have always operated on thin profit margins, and the industry is a competitive pressure cooker. Airlines need lots of expensive equipment, people to operate it, and more people to handle baggage and serve customers. It takes a lot of cash to buy the equipment and pay the people.

Throw in factors such as rising fuel costs, discount fares and frequent-flier programs, and the temptation to cut corners becomes obvious.

If a company cuts costs and produces flavorless cereal, or lightbulbs that don’t last, or computers that don’t compute, they will improve or perish, their fate determined by the market’s “invisible hand.”

But industries such as those involving public transportation, nuclear energy and pharmaceuticals, to name a few, have more at stake than profit and loss.

And in the end, if such companies put profit over safety they will harm their customers, their investors and themselves.

(A summary of the Alaska Airlines report is on the company’s Web site at www.alaskasworld.com)