SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
transportation department
As Biden Takes On Airline Junk Fees, It's Worth Asking Why Buttigieg Didn't
Buttigieg not only could have addressed this years ago, not only should have, but was explicitly directed by Congress to do so.
Feb 24, 2023
The Biden White House ushered in February with a new salvo of regulation targeting junk fees — those really annoying surcharges that don’t accomplish anything other than making the corporations more money. One particularly cruel example being targeted is a practice of airlines charging parents extra to be seated with their children. President Biden doubled down on the issue in his State of the Union address as well, saying that “airlines can’t treat your child like a piece of baggage.” Some airlines would charge customers to sit next to their children who were still in diapers.
Already, President Biden’s efforts are seeing results; United announced this week that it would no longer charge families extra to sit with their children. While this is certainly a welcome development, it is also an extremely overdue one. Secretary Pete Buttigieg not only could have addressed this years ago, not only should have, but was explicitly directed by Congress to do so. Banning these kinds of abusive business practices is unquestionably a good thing, but asking why it took so long is also imperative to holding the government responsible for fulfilling its most basic duty: protecting the citizens it was designed to serve, especially those who are most vulnerable to the ploys of powerful elites.
A 2020 Consumer Reports investigation found that children as young as one year old were being forced to sit alone on flights, even long ones, if their parents or guardians couldn’t pay the fees to keep families together. This is obviously immoral and dangerous for young children, especially those with medical conditions that require specialized attention, like autism, or who are simply too young to be in a new, loud, and uncomfortable experience without a trusted guardian. Kids need care, and it shouldn’t be up to the kindness of strangers to provide it. Where most of us see a moral prerogative, airlines see a money-making opportunity.
Congress agreed years ago that these fees should be banned. In 2016, the FAA Extension, Safety, and Security Act included language directing the Secretary of Transportation to move to prohibit them. Elaine Chao, Donald Trump’s Secretary of Transportation and vehement deregulator, unsurprisingly, never used her authority to spare families from these outrageous fees.
(Last autumn, when reached for comment on airline regulation, DOT’s spokesperson denied that such instruction was ever provided. However, the FAA Extension Act section 2309 says “DOT shall review and, if appropriate, establish a policy to require all air carriers to establish a policy that enables a child, age 13 or under on a scheduled flight, to be seated in a seat adjacent to the seat of an accompanying family member over age 13, except when assignment to an adjacent seat would require an upgrade to another cabin class or a seat with extra legroom or seat pitch for an additional charge.” So, DOT’s spokesperson is correct only if the department believes keeping children safe on flights is not “appropriate.”)
One would expect an ambitious Democrat trying to burnish a public image as a detail-oriented, empathetic politician would leap at this opportunity. But Buttigieg did not prohibit these family separation fees. In the fall, DOT announced it would begin a new rulemaking process around fee transparency, which doesn’t address the core of the problem—that these fees should not be allowed at all.
In response to a question about why Buttigieg did not initiate a rulemaking to block these fees, DOT’s spokesperson said:
Rulemaking can be lengthy so DOT is working to secure better service from airlines right now – while also preserving rulemaking as an option. Under Sec. Buttigieg, DOT issued for the first time a notice urging airlines to do everything that they can to enable young children to be seated next to an accompanying adult at no additional cost. The notice provided airlines a four month period to improve and make changes to their policies and warned that the DOT would take additional action if its review, which is currently underway, reveals that airlines’ seating policies and practices are barriers to a child sitting next to a parent or other adult family member.
The spokesperson provided no explanation for why the existing measures and rulemaking could not have been done concurrently. Also, note that Buttigieg “urged” airlines, not “required”. That’s because, absent an actual rule, he lacks the authority to force the airlines’ hands. Plus, those “additional actions” that might be taken are probably rulemaking. The upshot of this entire argument is that Buttigieg delayed creating a rule to block exploitative fees that target children in an attempt to play nice with CEOs. It was a waste of nearly two years of opportunity.
Interestingly, though, this exact rulemaking is one of the things that the White House’s fact sheet announced. So, because of inaction at DOT, a rule that could have been finalized in the next couple of months will instead take until next year, quite possibly after the 2024 elections. Worse, it is entirely plausible that such a rule cannot be finalized until after the winner of the 2024 presidential election is inaugurated. If Democrats lose, this rule could be scrapped before it ever hits the books. Maybe Republicans would see it through, but their last transportation secretary refused to implement the reform called for by Congress in 2016, which is why it fell on Secretary Buttigieg’s shoulders in the first place.
One possible explanation is that DOT is simply understaffed; according to Buttigieg, the airline consumer protection staff has only thirty people to regulate the entire industry. That is certainly a serious issue that should be addressed this year when Congress takes up FAA reauthorization. However, given that a rulemaking will be required anyway, it seems like the end result of the DOT’s plodding approach was just to make more work for that small staff.
The fact that this is coming from the White House is also telling. President Biden did not need to give Buttigieg the authority to start this rulemaking. This could have come straight from DOT’s Office of the Secretary, but it didn’t. Some of that might be related to Buttigieg’s apparent distaste for fighting major airlines. This way, the trade associations and lobbyists are up in arms at the entire administration and not Secretary Pete personally. Intentional or not, it certainly provides a degree of political cover.
Still, Buttigieg was probably heavily involved in the decision to begin the new rulemaking, which will take meaningful action to protect consumers. He deserves some kudos for good work there. But you can’t turn in good work two years late and still expect full marks.
Keep ReadingShow Less
'They Are Just Mocking Pete Buttigieg': Southwest Promotes Executives After Historic Meltdown
"That's the behavior of a company with no intention of changing course from management decisions that seek to enrich shareholders while leaving consumers holding the bag."
Jan 11, 2023
After canceling nearly 17,000 flights around the Christmas holiday—the worst customer service meltdown in the history of the U.S. airline industry—Southwest announced this week that it is promoting several of its executives, a move that watchdogs decried as a slap in the face of the travelers impacted by the company's incompetence and greed.
In a press release, Southwest said it is elevating five executives across different departments at the company, including network operations control and communications. The announcement came just over a week after the Southwest pilots' union published a scathing letter calling the corporation's management a "headquarters-centric cult" that has "eroded our company from within."
While Southwest said the new leadership changes "represent phase two of the organizational structure work that began in September 2022," critics argued the decision to go ahead with the promotions following the holiday debacle shows a total disregard for customers and U.S. regulators, who have been accused of doing far too little to crack down on industry abuses.
"Southwest thought its executives deserved a promotion after leaving thousands of its consumers in the lurch in the middle of peak holiday season travel," Liz Zelnick, director of the Economic Security and Corporate Power program at Accountable.US, said in a statement Tuesday. "That's the behavior of a company with no intention of changing course from management decisions that seek to enrich shareholders while leaving consumers holding the bag. We hope that Congress investigates their failures and holds their executives accountable."
Matt Stoller, director of research at the American Economic Liberties Project, wrote in response to the promotions: "They are just mocking Pete Buttigieg. And why shouldn't they?"
Buttigieg, the head of the U.S. Transportation Department, has faced growing backlash from airline watchdogs and members of his own party in recent days for failing to take decisive action in the lead-up to and in the wake of Southwest's mass cancellations, which pilots and flight attendants say were fueled by the company's refusal to invest in technological upgrades that could have helped the airline giant navigate bad weather and predictable holiday travel chaos.
In recent years, as flight crews pressed for changes to the company's antiquated technology, spent nearly $6 billion buying back its own stock.
"Pete Buttigieg chose to let nearly every domestic airline off scot-free after they were caught completely flat-footed earlier this year," said Jeff Hauser, executive director of the Revolving Door Project, referring to cancellations surrounding the July 4 holiday. "Despite rampant cancellations and widespread violation of federal law by giving travel vouchers instead of cash refunds, the only domestic airline to face any regulatory scrutiny was the small, politically weak Frontier."
"That is despite the fact that Frontier was responsible for far less of the industry-wide meltdown than major players like United or Southwest," Hauser continued. "Every other U.S.-based airline got off with a warning and promised to do better in the future. When you don't actually enforce the law, you lose credibility as a regulator. Our position is simple: when corporations violate federal law, they should be investigated and held accountable."
"When you don't actually enforce the law, you lose credibility as a regulator."
While the Transportation Department has said it is investigating the latest round of mass cancellations and acting on the flurry of refund complaints from Southwest customers whose travel plans were thrown into chaos, lawmakers and advocates argue the agency's actions thus far have fallen far short of what's needed to hold the company accountable and prevent future disasters.
"In light of the sheer magnitude of Southwest Airlines' most recent operational failures and the devastating impact these failures and other airline cancellations continue to have on American consumers, we believe much more needs to be done," 26 Democratic lawmakers wrote in a letter to Buttigieg last week.
"Refunds and other types of compensation policies quickly become meaningless if there's not a clear mechanism or platform for passenger redress. Ensuring passengers and airlines can effectively communicate with one another will allow passengers
to swiftly receive any owed compensation as well as any other helpful information a passenger may need after a canceled or significantly delayed flight," the lawmakers wrote. "Furthermore, the Department should make sure that airlines are able to maintain a reasonable level of operational capabilities in the event of extreme weather or other type of potential disruption. Of course, not all
disruptions can be controlled. But issuing rules and standards that could help limit or prevent future cancellations and delays arising from these initial disruptions will ultimately benefit consumers much more than any reimbursement policy ever could."
William J. McGee, a senior fellow for aviation at American Economic Liberties Project, wrote in an NBC News op-ed earlier this month that "America's commercial aviation system is broken, but so is the only regulatory agency allowed to oversee it."
"Consider what we've seen from the federal government since Covid hit," McGee wrote. "For starters, airlines withheld at least $10 billion in unpaid refunds and unused flight credits after the pandemic forced people not to fly in 2020 and beyond. In November, Secretary Pete Buttigieg finally imposed what he termed 'historic' fines. But only Frontier and five small foreign carriers were penalized."
"Then, the first half of 2022 had an unprecedented number of delayed and canceled flights, more than in all of 2021," he continued. "Despite warnings from lawmakers and groups like my organization, the American Economic Liberties Project, Buttigieg assured passengers in September that the airlines would address their scheduling problems. Unfortunately, he didn't use his authority under the Transportation Department's unfair and deceptive acts rule to investigate why tens of thousands of flights were scheduled and then paid for by consumers, only to be canceled."
"Worse," McGee added, "there have been no reported penalties for the cancellations. This lack of enforcement may have contributed to Southwest's Christmas meltdown, because it's unlikely Southwest and other airlines would have stranded so many passengers if they feared real consequences."
Keep ReadingShow Less
Sanders Calls on Buttigieg to Hold Southwest CEO Accountable for 'Greed and Incompetence'
"This is a company that got a $7 billion taxpayer bailout and will be handing out $428 million in dividends to their wealthy shareholders," said Sen. Bernie Sanders.
Dec 29, 2022
Sen. Bernie Sanders on Wednesday urged the Transportation Department to ensure Southwest's chief executive pays a price for mass U.S. flight cancellations that have left passengers and employees stranded around the country, throwing lives into chaos and drawing further attention to the company's business practices.
"Southwest's flight delays and cancellations are beyond unacceptable," Sanders (I-Vt.) wrote on Twitter. "This is a company that got a $7 billion taxpayer bailout and will be handing out $428 million in dividends to their wealthy shareholders. The U.S. Department of Transportation must hold Southwest's CEO accountable for his greed and incompetence."
Bob Jordan, who has worked for Southwest for decades and became the company's CEO earlier this year, acknowledged on Tuesday that the airline needs to "upgrade" its outdated scheduling system and other technology that flight attendants and pilots have been warning about for years.
"For more than a decade, leadership shortcomings in adapting, innovating, and safeguarding our operations have led to repeated system disruptions, countless disappointed passengers, and millions in lost profits," the Southwest Airlines Pilots Association (SWAPA) said in a statement Wednesday. "The holiday meltdown has been blamed on weather that had been forecast five days prior, but this problem began many years ago when the complexity of our network outgrew its ability to withstand meteorological and technological disruptions. SWAPA subject matter experts have repeatedly presented years of data, countless proposals that make Southwest pilots more efficient and resilient."
Instead of investing more heavily in such critical upgrades, Southwest pumped billions of dollars into stock buybacks in the years leading up to the Covid-19 pandemic.
Jordan took over as chief executive in February, receiving a generous compensation package that could amount to $9 million for the year. Earlier this month, just weeks before the airline began canceling thousands of flights per day, Jordan announced that the company would reinstate its quarterly dividend, which was suspended at the beginning of the pandemic.
The current payout of 18 cents per share, set to reach shareholders next month, will cost the company $428 million a year.
In an internal message to employees on Tuesday, Jordan said of the ongoing meltdown, "This stops with me."
"I'm accountable for this and I own our issues and I own our recovery," Jordan added.
"Southwest's flight delays and cancellations are beyond unacceptable."
Like Southwest's management, the Transportation Department—headed by Pete Buttigieg—knew there was potential for a holiday travel crisis. The department is currently investigating the ongoing flight cancellations.
"Before the debacle, attorneys general from both parties were sounding alarms about regulators' lax oversight of the airline industry, imploring them and congressional lawmakers to crack down," The Leverreported Wednesday. "Four months before Southwest's mass cancellation of flights, 38 state attorneys general wrote to congressional leaders declaring that Buttigieg's agency 'failed to respond and to provide appropriate recourse' to thousands of consumer complaints about airlines' customer service."
"Weeks before that, New York Attorney General Letitia James (D) sent Buttigieg a letter warning of 'the deeply troubling and escalating pattern of airlines delaying and canceling flights' particularly during holidays," the outlet added.
In November, Buttigieg leveled fines totaling $7.25 million against six airlines for "extreme delays in providing refunds" to customers whose flights had been canceled or significantly altered.
But critics said the punishment was far from adequate, and neither Southwest nor its main competitors were among the companies ordered to pay penalties. The Lever noted Wednesday that Southwest "has spent more than $2 million on lobbying since Biden took office and Buttigieg became secretary of Transportation," and he has faced withering criticism for refusing to take on the increasingly consolidated airline industry.
\u201c1) My @econliberties colleagues released model legislation in September aimed at repealing a thing called federal preemption in the airline industry. You can read about it here: https://t.co/8e9dEmbD7K\u201d— Katie Van Dyck (@Katie Van Dyck) 1672263469
According to Bloomberg, Buttigieg told Jordan on Tuesday that the Transportation Department "expects that Southwest will meet its obligations to passengers and workers and take steps to prevent a situation like this from happening again."
The Christmas travel crisis isn't the first time this year that U.S. airlines have faced backlash over mass cancellations. Around the July 4 holiday, major airlines including Southwest canceled or delayed thousands of flights amid a travel surge.
At the time, Sanders wrote a letter calling on Buttigieg to strengthen federal regulations to impose a fine of "$27,500 per passenger for all domestic flights that are delayed more than two hours and all international flights that are delayed more than three hours when passengers are forced to wait on the tarmac."
The senator also urged the Transportation Department to fine airlines "$55,000 per passenger if they cancel flights that they know cannot be fully staffed."
Buttigieg has yet to do either.
Sen.-elect John Fetterman (D-Pa.), who joined Sanders in calling for a crackdown on the airline industry earlier this year, wrote on Twitter Wednesday that "airlines have a responsibility to their customers."
"When they fail," he added, "we must hold them accountable."
Keep ReadingShow Less
Most Popular