If you want to understand why U.S. airlines aren’t concerned about being fined by the Department of Transportation (DOT) for failing to repay $10 billion in refunds to customers whose flights were canceled, you need only look at Transportation Secretary Pete Buttigieg’s daily schedule.
This is the suggestion from critics who say Buttigieg spends far more time meeting with airlines and industry trade groups than he does listening to consumer advocates, according to the New York Post.
“I don’t know what goes on behind closed doors but Buttigieg clearly hears the airlines’ perspective far more often than he hears from consumer advocates,” William McGee, Senior Fellow for Aviation & Travel at the American Economic Liberties Project told The Post.
Following the disastrous Christmas travel season during which Southwest Airlines canceled thousands of flights, BizPac Review reported that U.S. senators from his own Democratic party, as well as 38 attorneys general, had for at least six months been blasting Buttigieg for his failure to act.
Senators and 38 attorneys general have been demanding Buttigieg take action on airlines for months https://t.co/Kgw0d17Mkl pic.twitter.com/hIRxSmFFPG
— Conservative News (@BIZPACReview) December 31, 2022
In his State of the Union address, President Joe Biden told Americans that his administration is “making airlines show you the full ticket price upfront, refund your money if your flight is canceled or delayed.”
“And we’ll prohibit airlines from charging $50 roundtrip for a family just to be able to sit together. Baggage fees are bad enough,” Biden vowed. “Airlines can’t treat your child like a piece of baggage.”
But of the $10 billion owed to put-out fliers, only a fraction has been repaid by the airlines, according to The Post, and Buttigieg has declined to fine them, despite having “sweeping powers to hold them accountable.”
“If airlines knew there would be severe punishment, that would change behavior,” McGee said. “If you’re the CEO of a big airline, you’re not afraid of the DOT at this point.”
Jeff Hauser, CEO and founder of the Revolving Door Project, agrees.
“If Buttigieg had been willing to fine the big airlines, you would’ve seen greater investment in customer service. (Southwest Airlines) would’ve held off on a stock dividend,” he said. “Pete could’ve influenced the math airlines did around giving a dividend versus investing in service.”
Friendly fire! Ohio Dem torches Buttigieg for airline cancelations: ‘Prime example of failing up’ https://t.co/yzUY0J7bJp pic.twitter.com/3xBaiYq11e
— Conservative News (@BIZPACReview) December 29, 2022
A DOT spokesperson defended the agency’s record in a statement.
“DOT is taking unprecedented action to protect the traveling public and hold airlines accountable when they don’t deliver,” the spokesperson told The Post. “And since 2021, DOT has helped get hundreds of thousands of people more than $1 billion back in refunds. Additionally, before Secretary Buttigieg took office none of the 10 largest airlines in the U.S. guaranteed meals or hotels when the airline was the cause of a cancellation or significant delay – now 9 of the airlines guarantee that.”
Government records obtained by The Post reveal, “During the first seven months of his tenure, Buttigieg met separately with executives from Southwest, United, JetBlue, Spirit Airlines, Alaska, Hawaiian, United, and Delta.”
“Buttigieg has also met repeatedly with industry trade group Airlines For America — which represents Alaska Airlines, American Airlines, Delta, Hawaiian Airlines, JetBlue, Southwest, and United,” the outlet reports.
In contrast, says McGee, the Transportation Secretary has granted just one consumer advocacy group a meeting.
Meanwhile, DOT hit Frontier Airlines with $224 million in fines after it received 4,329 complaints in 2020, “less than half of what was amassed by United [Airlines].”
Frontier didn’t manage to grab Buttigieg’s ear, perhaps, The Post suggests, because it “spent just 1/17th of what Southwest Airlines spent on lobbying in 2022.”
“The agency also went after TAP Portugal, Air India, Aeromexico, El Al, Avianca — charging these international carriers roughly $350 million total,” according to the outlet.
Campos-Duffy slams Buttigieg for using airline crisis to ‘deflect from his own incompetence’ https://t.co/fZfLnyvZJK pic.twitter.com/zD9EtDWRva
— Conservative News (@BIZPACReview) December 28, 2022
“This latest round of enforcement… leaves out the most egregious US offenders,” McGee said. “Frontier’s decision to withhold valid refunds deserves punishment. But so too does the ongoing abuse of passengers by American, Delta, and United, whose market share dwarfs Frontier’s.”
The Post explains:
As of 2023, Delta has 44 lobbyists which cost the company $3.69 million in 2022. The Atlanta-based carrier’s PAC spent nearly $1.1 million in the 2022 midterms — donating mainly to Congress members on the House Transportation and Infrastructure Committee that oversee the agency like Rick Larsen (D-Wash.) and Sam Graves (R-Mo.).
As of 2023, United has 27 lobbyists, spent $2.58 million lobbying in 2022 alone and its PAC spent $315,000 on the midterms. As of 2023, American Airlines had 39 lobbyists and spent $3.75 million on lobbying in the midterm.
“These airlines have the institutional knowledge to operate in D.C…. the lobbyists know the DOT and know it’s one giant club,” Hauser said. “You make yourself a pariah if you don’t engage.”
These airlines, it turns out, are very well-connected.
“Southwest’s ex-CEO Greg Kelly worked on the Obama Administration’s advisory board, board member J. Veronica Biggins served in the Clinton White House and board member Thomas Gilligan cut his mouth working at the Council of Economic Advisers,” The Post notes.
And with those kinds of friends, they can get out of a lot of grief.
“It’s less about campaign cash,” Hauser said. “It’s more if you’re a company that hires the right people.. and gives your CEO the right talking points to smooth things over you can get out of the principal’s office without being punished.”
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