Valu Jet - Corporate Affairs


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  • ValuJet’s had a higher accident rate than the 10 largest airlines
  • SabreTech loaded plane, mislabeled boxes, what caused delay
  • Despite pleads from the victims families, ValuJet was never prosecuted for their involvement despite their poor safety record
  • As the first American aviation company to be criminally prosecuted for its responsibility in an airline crash, they closed operations in 1999.Other mechanic failed to appear in court and is still missing
  • Chose SabreTech on the basis of lowest cost.Hired the least experienced Pilots and Maintenance crew to save money, and pressured them to fly in bad weather or when facing equipment problems to turn plane around faster.Short-term gains may not be beneficial in the long run. Short-term cost savings of not properly supervising SabreTech resulted in long-term costs of an exponentially higher level.What may be operationally expedient can cost lives (taking short-cuts by not emptying the canisters, not placing prescribed plastic caps on them, and not packaging them correctly).Deliberately/accidentally broke FAA rules not to transport hazardous material in aircraft cargo holds.Lost sight of it’s purpose and overlooked safety concerns to promote air travel. Short-term cost savings of not properly supervising ValuJet resulted in much criticism, job loss for some involved, and an expensive redirection of focus.
  • Valu Jet - Corporate Affairs

    1. 1. ValuJet Flight 592<br />Rhea Culbertson<br />Stephen Gilliam<br />Amanda Hartnett<br />Amanda Winchip<br />
    2. 2. National Geographic Channel<br /><br />
    3. 3. OVERVIEW<br />ValuJet DC-9<br />
    4. 4. ValuJet<br />AirTran Airways<br />Lewis Jordan, CEO<br />Founded in 1993<br />Low-cost air carrier<br />Eastern United States<br />Fleet consisted of McDonnell Douglas MD-95s and many used aircraft<br />ValuJet&apos;s fleet was among the oldest in the US averaging 26 years.<br />Poor safety record<br />Founded in 1993 as Conquest Sun Airlines<br />Renamed Air Tran Airways in 1994<br />Entered into a reverse merger with Value Jet in 1997 and continued to operate under the name of AirTran Airways<br />Low-cost air carrier<br />Eastern and Midwest United States<br />OVERVIEW: Organizations Involved<br />
    5. 5. SabreTech<br />Federal Aviation Administration (FAA)<br />ValuJet’s maintenance contractor<br />Chemical oxygen generators<br />Placed 5 boxes of improperly secured canisters in the cargo compartment of ValuJet Flight 592<br />Did not cover and secure the firing pins on the generators<br />Major roles include the following:<br />Regulating U.S. commercial space transportation <br />Issuing, suspending, or revoking pilot certificates <br />Regulating civil aviation to promote safety, especially through local offices called Flight Standards District Offices<br />OVERVIEW: Organizations Involved<br />
    6. 6. OVERVIEW: Organizations Involved<br />Pilot and Flight Crew<br />Candi Kubeck, Pilot<br />Plane Manufacturer<br />McDonnell Douglas <br />National Transportation Safety Board (NTSB)<br />Independent regulatory and investigating U.S. Government agency responsible for civil transportation accident investigation<br />Miami International Airport<br />
    7. 7. EXPLAIN<br />
    8. 8. EXPLAIN: Flight 592<br />May 11, 1996<br />Departed from Miami International Airport and scheduled to land at Atlanta International Airport<br />Took flight at 2:04 p.m. after a 1 hour 4 minute delay<br />At 2:10 the crew noticed what they believed to be an electrical problem<br />Smoke then fire from the cargo compartment filled the cabin<br />At 2:14 the aircraft disappeared from radar<br />Flight 592 crashed into the Florida Everglades at a speed in excess of 500 miles an hour<br />The pilot, co-pilot, three flight attendants, and all 105 passengers were killed<br />
    9. 9. EXPLAIN: ValuJet Response<br />“It is impossible to put into words how devastating something like this is to humans who care.”<br />Emphasized that the plane, built in 1969, was up to date on all safety inspections<br />Outlined various safety checks ValuJet follows to maintain its aircraft<br />“A” Check – Most frequent, least thorough- May 7, 1996<br />“B” Check – Mid level safety inspection – March 19, 1996<br />“C: Check – Least frequent, most thorough- Oct. 1, 1995<br />Spoke on the integrity of Pratt & Whitney, the manufacturer of the plane’s engine<br />
    10. 10. EXPLAIN: ValuJet Response<br />Noted that the plane’s age was not necessarily of major concern, nor was it necessarily a factor in the crash. <br />&quot;When you say that this is a relatively old airplane, it is important to point out that the DC-9 is a very common airplane operated by a lot of airlines.”<br />&quot;There are special inspections that are designed to protect against what are called &apos;aging aircraft concerns&apos; on any airplane that goes up beyond 10, 15 years in operating time. But there is absolutely nothing about a 25-year-old plane that has been properly maintained that gives particular cause for concern.“ <br /> - Jordan Lewis, CEO ValuJet<br /> May 11, 1996 Press Conference<br />
    11. 11. EXPLAIN: Who Is Responsible?<br />The NTSB held the following parties accountable:<br /> 1. SabreTech<br />Illegal transport of dangerous materials aboard a commercial flight<br /> Improper labeling of the canisters <br />Failure to provide the required safety equipment for the canisters<br /> 2. ValuJet<br />Failure to supervise SabreTech<br /> 3. FAA<br />Failure to supervise ValuJet<br />Failure to require active fire suppression equipment in the cargo compartment<br />
    12. 12. ValuJet<br />SabreTech<br />Never prosecuted<br />Grounded by the FAA on June 16, 1996<br />Allowed to resume operations on September 30, 1996<br />Merged with AirTran Airways in 1997 and continued operation under the AirTran name<br />Florida Grand Jury Verdict:<br />110 counts of manslaughter<br />110 counts of third-degree murder<br />1997 Federal Grand Jury Verdict:<br />Mishandling of hazardous materials<br />Failure to properly train employees<br />Conspiracy<br />False Statements<br />$2 million fine<br />$9 restitution<br />Maintenance supervisor and 2 mechanics who worked on the plane charged with conspiracy and making false statements<br />EXPLAIN: Short-term Consequences<br />
    13. 13. ValuJet<br />SabreTech<br />Operating as AirTran<br />Several executive officers of ValuJet recently founded Allegiant Air<br />Went out of business in 1999<br />The U.S. Court of Appeals partially reversed the guilty verdict as they could not find intent to harm<br />Maintenance Supervisor and 1 mechanic acquitted on all charges<br />EXPLAIN: Where are they now?<br />
    14. 14. EVALUATE<br />ValuJet Flight 592 Memorial<br />
    15. 15. EVALUATION<br />Top Management was accessible to the media but poorly prepared<br />CEO Jordan misspeaks on Larry King<br />“We’re in a business where we take the lives of people”<br />“We pay the lowest wages,“ when asked about wages and profitability.<br />
    16. 16. EVALUATION<br />Top Management was accessible to the media but poorly prepared<br />Allowed CNN to tape meeting between officers and employees<br />Employees were “the true victims of the situation.” <br />- chief corporate counsel<br />
    17. 17. EVALUATION<br />Top Management was accessible to the media but poorly prepared<br />Lauded by the media in July 1996 after TWA 800 mid-air explosion and company officials were inaccessible.<br />
    18. 18. EVALUATION<br />Credibility Lost<br />Jordan cautions against “rush to judgment”<br />Proclaims safety record, then “We’ve had incidents and a tragic accident, and now we are looking forward to a high level of safety.”<br />ValuJet accident rate: 3.06/100,000 departures<br />14 Other Low-cost carriers: 0.43/100,000 departures<br />- Time, May 27, 1996<br />FAA grounds ValuJet on June 17 due to “numerous systemic flaws”<br />One of the oldest fleets in the US, averaging 26 years<br />
    19. 19. EVALUATION<br />Credibility Lost<br />ValuJet criticized for being a “virtual airline”<br />Provides transportation<br />Contracts maintenance and training<br />Jim Hall, Vice Chairman, NTSB, before the House Transportation Committee, June 25, 1996<br />“I would have grounded this fleet myself if I had had any reason to believe that the airplanes were not safe. The safety of our customers is our No. 1 priority and far and away ahead of any other priority.”<br />Lewis Jordan, before the House Transportation Committee, June 25, 1996<br />
    20. 20. EVALUATION<br />Credibility recovered<br />ValuJet flies again with limited service beginning September 26, 1996<br />15 Jets (down from 52)<br />Joseph Corr replaces Lewis Jordan as President and CEO on November 4, 1996<br />Merger with AirTran completed November 17, 1997<br />ValuJet name retired<br />
    21. 21. EVALUATION<br />Credibility recovered<br />Relocated HQ to Orlando from Atlanta<br />Fleet of Boeing 717 and 737s<br />One of the newest fleets in the air<br />139 aircraft as of October 2008<br />Currently flies to 57 destinations with at least five more to be added in Q2 2009<br />
    22. 22. WHAT THEY SHOULD HAVE DONE<br />ValuJet was allowed to resume business on September 30, 1996<br />
    23. 23. WHAT THEY SHOULD HAVE DONE<br />Initial Response<br />Follow Up<br />Short-Term Actions<br />Long-Term Actions<br />Child placing flowers at the Flight 592 Memorial<br />
    24. 24. WHAT THEY SHOULD HAVE DONE:<br />INITIAL RESPONSE:<br />Release a statement<br />ASAP<br />Show sincerity <br />Conducting internal investigation<br />Preventative measures will be taken<br />
    25. 25. FOLLOW UP: OVERARCHING MESSAGE<br />VALUJET <br /><ul><li>“We pay the lowest wages.”
    26. 26. “We’re in a business where we take the lives of people.”</li></ul>SOUTHWEST<br /><ul><li>“There are absolutely no words to accurately state our grief and our sorrow over this tragedy.”</li></ul>WHAT THEY SHOULD HAVE DONE:<br />
    27. 27. WHAT THEY SHOULD HAVE DONE<br />FOLLOW UP:<br />Set the tone at the top and from the beginning.<br />Make press releases addressing the investigation process.<br />
    28. 28. WHAT THEY SHOULD HAVE DONE:<br />SHORT TERM: VICTIMS<br />Relief Program<br />Contact victims’ families<br />Give the number to an information hotline<br />Mail letters of apology and condolences<br />Provide comfort for victims’ families:<br />Funding for funeral/memorial services<br />Grief counseling<br />
    29. 29. WHAT THEY SHOULD HAVE DONE:<br />SHORT TERM: EMPLOYEES<br />Promote communication<br />Hold teleconferences frequently<br />Anonymous Hotline <br />Complaints, general issues, etc.<br />Day of Workshops<br />Address safety, new operations and guidelines<br />
    30. 30. WHAT THEY SHOULD HAVE DONE <br />LONG TERM:<br />Work with FAA to make stricter regulations<br />Hire new maintenance team<br />Purchase new and safer planes<br />Maintain strict, quality control standards of training and maintenance processes<br />Offer higher wages to attract more qualified employees<br />
    31. 31. LESSONS LEARNED<br />
    32. 32. LESSONS LEARNED<br />Do the work before the crisis occurs<br />Be responsive, informed, and sympathetic<br />Know when things aren’t working and be flexible<br />
    33. 33. LESSONS LEARNED: Preventative Procedures<br />Safety First<br />ValuJet<br />SabreTech<br />FAA<br />
    34. 34. LESSONS LEARNED: ValuJet vs. Southwest<br />ValuJet<br />The media, customers, and the general public were outraged.<br />Significant decrease in revenue long-term.<br />Southwest<br />Praised by the media, and saw continued growth in customer bookings<br />Immediate drop in share value, but regained in short period following.<br />
    35. 35. ValuJet 1995 vs. Air Tran 2008<br />
    36. 36. THANK YOU<br />QUESTIONS<br />
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