Outside the Beltway

Buttigieg Responsible for Flight Delays?

Should Secretary Pete have done more?

James Joyner · Thursday, December 29, 2022 · 12 comments

Writing at The Lever, David Sirota and Andrew Perez claim “State Officials Warned Buttigieg About Airline Mess.”

Southwest Airlines stranding thousands of Americans during the holiday season is not some unexpected crisis nor the normal consequence of inclement weather — and federal officials are not powerless bystanders. 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 warnings came just before Transportation Secretary Pete Buttigieg appeared on national television insisting travel would improve by the holidays, and before Southwest executives — flush with cash from a government bailout — announced new dividend payouts to shareholders, while paying themselves millions of dollars.

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.

“Americans are justifiably frustrated that federal government agencies charged with overseeing airline consumer protection are unable or unwilling to hold the airline industry accountable,” they wrote in August, arguing that Congress must pass legislation empowering state officials to enforce consumer protection laws against the airlines.

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. She outlined various actions he could take to deter the practice.

The demands for tougher enforcement were echoed in a concurrent letter to Buttigieg by Democratic U.S. Senators Elizabeth Warren and Alex Padilla.

The headline and lede strike me as grossly misleading. It’s true that multiple officials wrote to Buttigieg this summer complaining of canceled and light flights and urging him to utilize more regulatory authority. Most of the requested actions, though, are in the form of compensating consumers for their inconvenience. There were also suggestions for punishing airlines with fines and doing more audits. To the extent that the delays and cancelations are due to airline malfeasance rather than Acts of God, that all seems perfectly reasonable to me.

Still, the notion that Buttigieg would have been able to fix the particular problems that hit customers during a record winter storm is absurd. We had record-low temperatures across the country. Buffalo, New York—one of the U.S. cities most equipped for handling bad winter weather—experienced catastrophic failures.

Beyond that, to the extent that bad business practices—notably the inexplicably bad employee management technology used at Southwest Airlines—exacerbated the problem, DOT wasn’t going to be able to get them fixed in a span of four months. It would take longer than that just to investigate the problem—assuming the Department even has the resources to do so—much less issue and implement new regulations.

Currently, Buttigieg and the Department of Transportation are the primary regulator over airlines thanks to a 44-year-old law preempting state consumer protection authority. Model legislation proposed by the American Economic Liberties Project, an anti-monopoly think tank, and backed by consumer groups would empower citizens and state law enforcement officials to sue airlines that violate consumer protection laws.

That’s swell. Has it passed? I don’t think so.

One week after the letter from state attorneys general, Buttigieg said on The Late Late Show With James Corden that airline travel “is going to get better by the holidays.” He added that “we’re really pressing the airlines to deliver better service.”

So, I don’t know by what metric “better” is measured. It’s rather silly, frankly, to promise that there would be fewer flight delays during a crowded winter travel season than during the warm days of summer, given that snow and ice are much more likely to cause problems than sunshine. But it’s possible that the specific management practices identified were on an upward trajectory.

This really seems like a distraction:

Earlier this month, Southwest — which received $3.2 billion of government support during the pandemic — announced it was reinstating its quarterly dividend for shareholders, at an annual cost of $428 million.

The company made that announcement just days after its CEO — who is paid $9 million a year — admitted the airline has been slow to modernize its computer and scheduling systems, whose breakdown helped fuel the holiday travel disaster.

“If you took our crews, we have a lot moving all over the country,” said Southwest CEO Bob Jordan. “If they get reassigned, someone needs to call them or chase them down in the airport and tell them.”

Michael Santoro, vice president of the Southwest Airlines Pilots Association, told the Los Angeles Times that the company’s “internal software can’t handle massive cancellations. The company hasn’t invested the money into scheduling infrastructure to support the network they have developed.”

While forsaking those technology investments, Southwest paid a handful of executives more than $112 million over the last five years, according to executive compensation data compiled by Salary.com.

Airlines, like many other public accommodations, received a lot of money during the pandemic because government edicts radically harmed their business. Whether Southwest should have issued stock dividends rather than fixing their software is a reasonable question to which I don’t have enough information to answer. (It may well have been more harmful to have the company seen as a poor investment.) But, surely, that’s not Pete Buttigieg’s decision to make?

And, yes, executives at Fortune 500 companies make a lot of money. Whether Southwest’s are overpaid is ultimately the call of their shareholders. (Should we factor in executive compensation when doling out taxpayer subsidies? Probably. I’m not a big fan of the Too Big to Fail mindset. But seems baked into our system on a bipartisan basis.)

One week before the Southwest scheduling disaster, 34 attorneys general led by Colorado Democrat Phil Weiser sent another letter begging Buttigieg to “impose significant fines for cancellations and extended delays that are not weather-related or otherwise unavoidable.”

I honestly don’t know the extent of Buttigieg’s latitude here. Regardless, even if he had imposed a whopping fine the instant he got that letter—assuming it even got to him in such a short time—it wasn’t going to fix Southwest’s software or otherwise impact the situation in question.

Buttigieg now seems to be threatening some sort of enforcement action, tweeting on Tuesday: “Southwest passengers have experienced unacceptable disruptions and customer service conditions. I have made clear to their executives that our department will hold Southwest accountable for making things right with their customers and employees.”

But critics charge that his agency has continued to do almost nothing in the face of egregious abuses of consumers.

“The Department of Transportation has announced a rule on refunds that won’t take effect for at least 2-3 years, sent the airline CEOs a letter, and promised to unveil an information dashboard,” wrote AELP in September 2022. “It has yet to fine any U.S. airline a single dollar for unpaid refunds, flight cancellations, or systematic violations of consumer protection law, and has issued fewer enforcement orders in 2021 than in any single year of the Trump and Obama administrations.”

Again, I simply lack the expertise on airline regulation to know what timetables are reasonable. Regulations tend not to take place overnight, as businesses need time to adjust their systems. That Buttigieg “has issued fewer enforcement orders in 2021 than in any single year of the Trump and Obama administrations” is, however, a red flag.

Under pressure, transportation regulators subsequently fined Frontier Airlines, but AELP noted that Buttigieg’s agency declined to do the same against much larger more politically powerful airlines, despite there being far more complaints against them.

Granting that the charge is coming from a lobbying group, this is indeed a damning charge.

Buttigieg was originally appointed to lead the Transportation Department despite having no relevant experience in transportation management. His former consulting firm, McKinsey, has published reports suggesting ways for airlines to extract more fees from consumers.

First, the McKinsey reference is a silly slur. He worked there for three years twelve years ago. Surely, its airline-commissioned reports has nothing to do with him.

Second, Cabinet appointees often have very little experience managing the particular purview of the agency.

Elaine Chao, the previous confirmed Transportation Secretary, was Director of the Peace Corps under George H.W. Bush and Secretary of Labor under George W. Bush; so far as I can tell, she had zero transportation expertise. Ah, you say. She was appointed by Donald Trump, who was notorious for appointing unqualified hacks. Fair!

Let’s look at her recent predecessors, then. Skipping the acting secretaries, we have,

• Anthony Foxx‘s (Obama) previous job was as Mayor of Charlotte. Prior to that, he was a lawyer and city councilman. His transportation experience consisted of reforms to the city’s light rail system. That’s not nothing but it hardly prepares one for managing the nation’s airline system.
• Ray LaHood (Obama) was a 14-year Congressman. He had served briefly on the House Transportation and Infrastructure Committee but was nine years removed from that experience when he was appointed.
• Mary Peters (Bush) was appointed after four years as administrator of the Federal Highway Administration. Before that, she had nearly two decades in Arizona’s Department of Transportation, including seven years as its director. So, highly qualified by experience.
• Norman Mineta (Bush) had spent 20 years in Congress and four years as Mayor of San Jose. Most of his time in Congress had been spent on various transportation subcommittees and he ultimately served two years as chairman and two more as the ranking member of the House Committee on Transportation and Infrastructure. So, again, pretty qualified.

That takes us back twenty years, which I think is enough for our purposes. A very mixed bag. I’d say Buttigieg, who spent years as a small city mayor, is slightly less qualified than the average but not the least qualified of the bunch in terms of “transportation” experience. But he’s an able administrator, a quick study, and an effective public speaker with a good relationship with the President. That’s perhaps a better skill set than being a token Congressman from the opposition party like Mineta and LaHood.

In recent months, Southwest has been lobbying Buttigieg’s department on “airline customer service and consumer protection issues” and “fare fees,” according to federal disclosures. Southwest has spent more than $2 million on lobbying since Biden took office and Buttigieg became Secretary of Transportation. Last year, the company paid at least $796,000 to the airline lobbying group Airlines for America.

Southwest is a major business. I’m not shocked that they lobby regulators.

We had a major failure in our transportation infrastructure that was only partly caused by historically severe weather. To the extent that there was management failures at DOT, it’s reasonable to call out the guy who had been charged with leading said department for two years. But he can’t magically fix the system.

The whole report comes across as a weird hit piece. It’s mostly innuendo and post hoc ergo proper hoc insinuations. Indeed, the Wall Street Journal‘s editorial from yesterday is considerably more nuanced and fair. They note, for example,

Carriers are already required to refund when flights are canceled or “significantly changed.” Mr. Buttigieg proposed a new rule in August that requires airlines to provide refunds if flights are delayed more than three hours, increase the number of connections, land at a different airport, or use a “downgraded” type of aircraft. The rule would also force airlines that received federal pandemic aid to provide credits if a passenger says he can’t fly because of Covid.

Which means, he actually took something very much like the actions James, Warren, and Padilla recommended right around the time they recommended. But, as noted previously, Buttigieg can’t just wave a magic wand and bring regulations into existence.