Pluralistic: 1,000,000 stranded Southwest passengers deserved better from Pete Buttigieg (16 Jan 2023)


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The La Brea tar-pits. A Southwest jet is nose-down in the tar, next to a stranded mastodon. In the foreground are the three wise monkeys, their faces replaced with that of Transportation Secretary Pete Buttigieg.

1,000,000 stranded Southwest passengers deserved better from Pete Buttigieg (permalink)

The catastrophic failure of Southwest Air over Christmas 2022 was the worst single-airline aviation failure in American history, stranding over 1,000,000 passengers. But while it was exceptional, it was also foreseeable: 2022 saw Southwest and the other carriers rack up record numbers of cancellations, leaving crews and fliers stranded.

It's not like the carriers can't afford to improve things. After pulling in $54 billion in covid relief, the airlines are swimming in cash, showering executives with record bonuses and paying titanic dividends to shareholders. Southwest has announced a $428m dividend.

This isn't a new problem. Trump's Transportation Secretary Elaine Chao was a paragon of inaction and neglect, refusing even to meet with consumer advocacy groups. This is bad, because under US law, state attorneys general are not allowed to punish misbehaving airlines – that power vests solely and entirely with the Secretary of Transport.

It's been two years since Biden appointed Pete Buttigieg to be the human race's most powerful aviation regulator. Buttigieg started his tenure on a promising note, meeting with the same consumer groups that Chao had snubbed, but after that hopeful beginning, things ground to a halt.

As Corporate Crime Reporter details, William McGee of the American Economic Liberties Project was impressed by the Secretary: "He was intelligent, articulate, he had good questions for us, he was taking notes, he seemed concerned." But 18 months later, McGee describes Buttigieg's leadership as "lax."

https://www.corporatecrimereporter.com/news/200/pete-buttigieg-and-the-southwest-airlines-meltdown/

Buttigieg likes to tout a single enforcement action as his signature achievement: fining six airlines and ordering them to issue refunds to US passengers. But only one of those airlines was a US carrier: Frontier, which only accounts for 2% of all US flights. The US monopoly carriers have gone unscathed.

The US carriers are in sore need of regulatory discipline. In 2020 alone, United racked up 10,000 consumer complaints, twice as many as any other carrier. Under Buttigieg, the DOT investigated these airlines and closed every one of these complaints without taking any action against them.

This is part of a wider pattern. In Buttigieg's 18 month tenure, not a single airline has been ordered to pay any fines as a result of cancellations. In the absence of oversight and accountability, the airlines have made a habit of scheduling flights they know they don't have the crew to fly (they used public covid funds to buy out senior crew contracts, retiring much of their workforce).

This gives the airlines the flexibility to offer many flights they know they can't service, and to allocate crew to whichever runs will generate the most profit, stranding US passengers and holding onto their money for months or years before paying refunds – if they ever do.

Consumer groups weren't alone in sounding the alarm over the deteriorating conditions in the airline sector. In 2022, dozens of state attorneys general – Democrats and Republicans – sent open letters to Buttigieg begging him to use his broad powers as Secretary of Transport to hold the airlines accountable.

What are those powers? Well, the big one is USC40 Section 41712(a), the "unfair and deceptive" authority modeled on Section 5 of the FTC Act. This authority allows the Secretary to act without further Congressional action, to order airlines to end practices that are "unfair and deceptive," and to extract massive fines from companies that don't comply.

As McGee told CCR, "the scheduling and canceling of flights is both unfair and deceptive." In order to force the airlines to end this practice, Buttigieg would have to initiate an investigation into the practice. The American Economic Liberties Project called on Buttigieg to open an investigation months ago. There has not been such an investigation.

Even on refunds, Buttigieg's much-touted signature achievement, the Secretary has left Americans in the cold. US law requires airlines to give cash refunds to passengers on cancelled flights. But to this day, passengers are sent unfair and deceptive messages by airlines offering them credit for cancellations, and fliers must fight their way through a bureaucratic quagmire to get cash refunds.

McGee and other advocates met with Buttigieg twelve times asking him to address this. When he finally took action, he ignored the domestic airlines – which racked up 5,700% more complaints in his first year on the job than in the previous year – except for tiny, largely irrelevant Frontier. If you are an American whose journey on an American airline was cancelled, there's a 98% chance that Buttigieg let them off without a single dollar in fines.

McGee isn't an armchair quarterback. He is an industry veteran, an FAA-licensed aircraft dispatcher: "I canceled flights. I rescheduled flights. I diverted flights. I delayed flights. I did that every day."

Apologists for Buttigieg claim that he's doing all he can: "Pete isn't in charge of airline IT!" But while USC 40 doesn't mention computer systems or staffing levels directly, it doesn't have to: the "unfair and deceptive" standard is deliberately broad, to give regulators the powers they need to protect the American people.

In understanding whether the million fliers that Southwest stranded on the way to their Christmas vacations could have expected more from their DOT, it's worth looking at how other regulators have used similar authority to protect the American people.

Exhibit A here has to be FTC Chair Lina Khan, whose powers under FTCA5 are nearly identical to Buttigieg's power under 41712(a) (the DOT language was copied nearly verbatim from the FTCA). Two years ago, Khan began an in-depth investigation into the use of nonompete agreements in the US labor market.

https://www.ftc.gov/news-events/events/2020/01/non-competes-workplace-examining-antitrust-consumer-protection-issues

This investigation created an extensive evidentiary record on the ways that workers are harmed by these agreements, and collected empirical observations about whether industries really needed noncompetes to thrive (for example, noncompetes are banned in California, home to the most profitable, most knowledge-intensive businesses in the world, undermining claims that these businesses need noncompetes to survive).

Then, right as Southwest was stranding a million Americans, Khan unveiled a rulemaking to ban noncompetes for every American worker, using her Section 5 powers. Khan's rule is retroactive, undoing every existing noncompete as well as banning them into the future.

https://pluralistic.net/2023/01/10/the-courage-to-govern/#whos-in-charge

This is what a fully operational battle-station looks like! Khan and Buttigieg are among the most powerful people who have ever lived, with more and farther-reaching regulatory authority, more power to alter the lives of millions of people, than almost anyone who every drew breath.

And yet, when Secretary Buttigieg jawbones about the airlines, it's all pleading, not threats. As McGee says, "If you have a Secretary of Transportation who does not punish the airlines when they act terribly, then we should not be surprised when they continue to behave terribly."

State AGs from both parties are desperate for Buttigieg to back legislation that would return their right to punish airlines. So far, he has not voiced his support for this regulation. When the Secretary of Transport won't act, and when he won't support the right of other officials to act, the American traveler is truly stranded.

(Image: Tomás Del Coro, Japanexperterna.se, CC BY-SA 2.0; Tarcil, CC BY-SA 3.0; modified)


Hey look at this (permalink)

The world’s biggest PR firm claims to be an expert on trust – but is it? https://www.theguardian.com/business/2023/jan/15/edelman-pr-firm-davos-trust



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This day in history (permalink)

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Colophon (permalink)

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