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Transportation Secretary Pete Buttigieg testifies before the Senate Commerce Committee on Capitol Hill, May 3, 2022.
It’s not much of a secret that Pete Buttigieg would like to be president. He’s young, personable, and wicked smart. Buttigieg is a likable blend of pragmatic liberal and technocrat, with a gift for making leftish policies sound like only so much common sense, as in his trademark call during the 2020 primaries for “Medicare for all who want it.”
He’s also gay, which would make him a different sort of breakthrough figure for those uncomfortable cutting in line ahead of a Black woman. A recent tally by The Washington Post of the most likely Democratic presidential nominee in 2024 placed Buttigieg second, just behind Joe Biden and ahead of Vice President Kamala Harris.
In recent months, Buttigieg has been all over the media, with eloquent speeches on everything from abortion rights, to a speech at Morgan State celebrating HBCUs, and one marking the 70th anniversary of D-Day. But what about his day job?
Several of these speeches, of course, did discuss aspects of transportation policy. But not a single one, and precious few of his actions as secretary, addressed the single biggest consumer frustration amenable to action by Buttigieg and his staff—the price-gouging and deteriorated service by the airlines.
The long-suffering airline passenger is a potential voter. It’s hard to think of another area where aggressive action by a highly visible and charismatic Cabinet secretary would reinforce Biden’s faltering message that his administration is on the side of beleaguered consumers and against rapacious special-interest industries.
But while Buttigieg has been active and visible on noncontroversial issues that involve DOT such as implementing the bipartisan infrastructure law (much of which is routine highway construction and ribbon-cutting), on airline abuses he has been mostly AWOL.
THE MOST RECENT INFLATION NUMBERS from the Bureau of Labor Statistics showed that once again, airfares increased far faster than the general rate of inflation and far more than justified by higher fuel costs. Flight prices in May were up nearly 13 percent from April after rising more than 18 percent in April. The average price of a domestic round-trip flight is $403, up 33 percent compared with the same time in 2019, according to Hopper, a travel booking site. Meanwhile, seat capacity is still down 6 percent compared to pre-pandemic numbers.
Why are fares so sky-high? The airlines love a pricing climate where demand exceeds supply. After more than two years of the pandemic keeping Americans cooped up at home, people are eager to travel this summer. But the airlines have kept seat capacity below pre-pandemic levels, and the industry's increasing concentration has made it easier for carriers to tacitly collude on high prices.
In the current economic climate, one notorious abuse is the airlines’ failure to hire sufficient crews even for the flights they have scheduled, much less for the ones that they should be adding. This in turn leads to last-minute cancellations that are predictable given inadequate staffing levels, as well as market power to maintain high fares. And of course, short-staffing increases profits by having to pay fewer employees.
Airfares increased far faster than the general rate of inflation and far more than justified by higher fuel costs.
This dereliction has been the subject of complaints by several consumer groups, as well as the major airline unions. Though Congress deregulated the airlines in 1978, the Transportation Department and its FAA retain a great deal of power to crack down on airline abuses.
For instance, FAA inspectors have the authority to demand records on crew sufficiency. “The airlines know that their crews are not adequate to handle their existing flight schedules,” says William McGee, an FAA-licensed aircraft dispatcher who worked for seven years in flight operations management for the airlines. “That’s why we see so many last-minute cancellations.”
McGee recently joined the American Economic Liberties Project after longtime investigative work for Consumer Reports on airline abuses. “The airlines are knowingly scheduling flights, when there is high probability that the flight will have to be canceled,” McGee adds. “It’s just not acceptable that a passenger gets a text in a taxi on the way to the airport that the flight has been canceled. It’s not like the pilot got sick, or there was a thunderstorm. This is the predictable result of inadequate staffing.”
At a hearing of the Senate Commerce Committee in May where Buttigieg was the only witness, his opening statement managed to address DOT’s work on ports, trucking, rail, supply chains, highways, and bridges, without a word about airlines. But that was the subject members most wanted to talk about, given their role both as constituent advocates and as frequent travelers. Buttigieg expressed sympathy, but made no commitment to take action.
Less than a month later, over Memorial Day weekend, Delta made last-minute cancellations of over 700 flights, or about 10 percent of its entire flight schedule. According to the DOT’s February 2022 report, cancellations are running 65 percent higher than pre-COVID.
Some airlines, in anticipation of increased post-COVID demand, simply expanded their schedules without adequate expansion of crews. “Southwest saw this as an opportunity to expand their schedule to compete with United, Delta, and American,” says Kevin Mitchell, chair of the Business Travel Coalition. “It was reckless in my view to do that without adequate planning, training, and crew staffing.”
Supposedly, the main problem with short-staffing is that the airlines can’t find enough pilots. This alibi is bogus on several counts.
For starters, the airlines got a massive bailout of over $60 billion, specifically geared to helping them not lay off staff. But the airlines went ahead and promoted early pilot retirement, as a way of saving money and technically not doing layoffs. So to the extent that there really are shortages, the airlines brought them on themselves.
But it’s not at all clear that there are true shortages. The airlines make more money with overly lean staffing, and this “shortage” is mostly about maximizing profits. According to FAA data assembled by the Air Line Pilots Association (ALPA), over the last eight and a half years 54,533 new pilots received FAA certification, while during the same time, the largest mainline and cargo carriers hired 36,951 pilots to cover expansion, pilot attrition, and to replace the 15,000 pilots who have retired since 2013.
So there is actually a surplus of certified pilots. As ALPA also points out, there may not be enough pilots at salaries the big airlines are willing to pay, kind of like Amazon being short of warehouse workers at going wages.
Some of these pilots, of course, may not be fully trained to fly the planes where they are needed. However, such training takes only months, not years. If the airlines were truly interested in maximizing service and not just profits (in the spirit of the immense taxpayer bailout), they would have been training and hiring pilots as needed over the past year as the pandemic was winding down. And the DOT should have been closely monitoring them to make sure this was happening.
Closely related to the issue of flight cancellations is the question of mandated refunds when a flight is canceled or seriously delayed. Under Buttigieg, the DOT has investigated all the major airlines for failure to issue timely refunds, but the fines levied totaled only a few million dollars. This is not even a pinprick when you compare it with airline revenues of $130 billion in 2021.
According to The Wall Street Journal, in 2021 the airlines were sitting on some $10 billion paid by consumers for flights that were canceled. Despite rules requiring refunds and despite puny fines levied by DOT, many consumers were duped by the airlines into taking credits for future travel instead.
A coalition of consumer and business travel groups pressing for more aggressive action seldom gets to meet with Buttigieg or another senior DOT official. They are relegated to occasional meetings with a DOT assistant general counsel named Blane Workie, who is in charge of civil rights and consumer affairs, and has no power to make or recommend changes. In writer Tom Wolfe’s famous formulation, they get to meet with the flak-catcher.
In principle, the DOT has extensive unused regulatory powers under its statutory general authority to regulate against “unfair and deceptive practices or unfair methods of competition.” In practice, the department is far too solicitous of the airlines.
In response to a query, a senior FAA spokesman, Matthew Lehner, said in an email message, “The FAA has safety oversight authority for crews to be trained, certified and rested. Airlines then build flight schedules consistent with those safety regulations,” but Lehner denied that the FAA has the authority to challenge deceptive schedules.
On June 10, DOT did propose a rulemaking clarifying airlines’ obligations to issue refunds in cases of flight cancellations. And tomorrow, June 16, Buttigieg is meeting with airline executives to discuss their plans to avert the kinds of disruptions on the July 4th weekend that occurred over Memorial Day. But in the absence of more fundamental changes and flexing of the DOT’s unused muscle, this seems like pretty weak tea.
An example of what the DOT could do but isn’t doing was a rule issued in 2010 by President Obama’s transportation secretary, Ray LaHood, a Republican no less. At the time, there had been an outpouring of complaints about tarmac delays stretching back over a decade. When a flight left the gate but was not able to take off because of congestion or weather problems, the airlines found it more expedient to just let passengers sit on the tarmac for many hours rather than bring the plane back to the gate and let people disembark and wait in the terminal or make other travel plans.
The result was delays stretching out as long as 12 hours as planes ran out of water, food, and functioning toilets. After numerous administrations and Congress failed to act, LaHood, under his general authority, issued a rule providing for per-passenger fines of $27,500 per passenger and requiring airlines to let passengers off after no more than three hours. The airlines complained but complied. Buttigieg could do no less with regard to fraudulent schedules and insufficient crews.
More generally, Buttigieg should use his bully pulpit to signal that he cares about passenger concerns and will use his latent power if the airlines don’t clean up their act. Kevin Mitchell, who has just launched a new Traveler Advocacy Project, urges Buttigieg to support legislation sponsored by Sens. Ed Markey (D-MA) and Richard Blumenthal (D-CT) to create an airline passengers bill of rights.
“The whole DOT ecosystem is broken from the perspective of airline consumer protection. It’s a captured agency whose main constituency is the airlines,” says Mitchell. “Pete Buttigieg has a bully pulpit that he’s hardly used at all. If you take a four-week period, you’ll see him on the networks talking about everything but airlines. Why would the secretary of transportation ignore the greatest level of consumer frustration in the history of aviation?”
Why indeed? A cynic might say that nobody ever made enemies cutting ribbons for new highway and bridge projects, but taking on one of America’s most powerful industries on behalf of consumers requires taking sides.
