How Pete Buttigieg and Washington lobbyists are fueling the US airline crisis

Transportation Secretary Pete Buttigieg has come under fire for natural disasters ranging from a plane crash on vacation to a train derailment that spilled chemicals in Ohio, with critics blaming his close ties to the industries he is supposed to regulate.

Outrage over US air chaos spilled over into President Biden’s State of the Union Address earlier this month. The commander-in-chief vowed to crack down on excessive fees, saying “airlines can’t treat your child like a piece of baggage” and demanded that “airlines show you the full price of the ticket in advance and refund you if your flight is cancelled.” or delayed.”

However, less than a month earlier, Southwest Airlines, which canceled 17,000 flights over the holiday season blaming the weather for breaking down its systems, promoted five top executives under the low-cost carrier’s new CEO, Bob Jordan.

Critics say it’s clear evidence that airlines aren’t afraid of Buttigieg, despite the fact that the transport secretary has broad powers to hold them accountable.

“If airlines knew there was going to be a severe penalty, it would change their behavior,” William McGee, senior aviation and travel fellow at the American Economic Freedom Project, told The Post. “If you are the CEO of a major airline, you are not afraid of DOT at the moment.”

Big problem: Airlines have to reimburse customers $10 billion for flight cancellations over the past three years, and they’ve only forked out a fraction of that amount. For example, in 2020 alone, United received 10,229 consumer complaints about refunds. This is despite the fact that airlines are required by US law to provide customers with full refunds for any canceled flights.

“If Buttigieg were willing to fine major airlines, you would see more investment in customer service. (Southwest Airlines) would not pay a stock dividend,” Jeff Houser, CEO and founder of the Revolving Door Project, told The Post. “Pete could have influenced the math that airlines have done about dividends rather than service investment.”

In a statement, a US Department of Transportation spokesman defended the agency’s reputation under Buttigieg.

“DOT is taking unprecedented action to protect travelers and hold airlines accountable when they fail to deliver,” a spokesperson for The Post said. “And since 2021, DOT has helped hundreds of thousands of people recover over $1 billion in refunds. Also, before Minister Buttigieg took office, none of the top 10 U.S. airlines guaranteed food or hotel accommodation if the airline was the cause of a cancellation or significant delay – now 9 airlines guarantee it.”

Critics say to understand why Buttigieg didn’t push harder, look at his daily routine. During the first seven months of his tenure, Buttigieg met separately with executives from Southwest, United, JetBlue, Spirit Airlines, Alaska, Hawaiian, United and Delta, according to government documents obtained by The Post.

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. In the meantime, consumer advocacy groups have only been able to hold one meeting, McGee told The Post.

“I don’t know what goes on behind closed doors, but Buttigieg is clearly hearing the airlines’ point of view much more often than consumer advocates,” adds McGee.

Another notable airline that hasn’t met Buttigieg is Frontier, which spent just 1/17th of what Southwest Airlines spent on lobbying in 2022. Frontier, which received 4,329 complaints in 2020 — less than half of what United, for example, has accumulated. — was fined $224 million, against zero for United. The agency also pursued TAP Portugal, Air India, Aeromexico, El Al, Avianca, charging these international carriers an estimated $350 million.

“This latest round of enforcement … does not include the most egregious criminals in the US,” McGee said. “Frontier’s decision to deny a refund deserves punishment. But the same can be said for the continued abuse of passengers by American, Delta and United, whose market share surpasses Frontier.”

Southwest, Delta, American and United declined to comment. Frontier did not return calls for comment.

Last summer, 38 attorneys general sent a letter to Congress alleging that Buttigieg “failed to respond” to thousands of complaints, “unable or unwilling” to hold airlines accountable, and left an “oversight vacuum” by allowing “airlines to mistreat consumers and leave them.” consumers without effective redress”.

However, insiders told The Post that lobbyists and airline executives with a presence in D.C. are constantly championing their airline’s interests and garnering sympathy from employees and politicians alike, including Buttigieg.

“Pete is receptive to well-dressed people … they touch his McKinsey heart,” Hauser said, referring to the well-connected consulting firm that Buttigieg worked for before he began his career in politics. “Buttigieg has done nothing to upset the system because he is very corporate and sympathetic to them.”

As of 2023, Delta had 44 lobbyists who cost the company $3.69 million in 2022. The Atlanta-based carrier’s PAC spent nearly $1.1 million in 2022 interim dates, donating mostly to members of Congress on the House Transportation and Infrastructure Committee who oversee the agency, like Rick. Larsen (Washington State) and Sam Graves (Missouri State).

United had 27 lobbyists as of 2023, with $2.58 million spent on lobbying in 2022 alone, with PAC spending $315,000 on interim dates. As of 2023, American Airlines had 39 lobbyists and spent $3.75 million on lobbying over the medium term.

“These airlines have the institutional knowledge to operate in DC…. the lobbyists know the DOT and they know it’s one giant club,” Hauser said. “You make yourself an outcast if you don’t fight.”

It’s not just about money, it’s about connections. Former Southwest CEO Greg Kelly served 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 while serving on the Council of Economic Advisers.

“It’s not so much about campaign money,” Houser says. “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 walk out of the CEO’s office without punishment.”