USA Today: Don’t let the airlines fool you. Regulate their cancellations and high fares.

July 21, 2022 Anti-Monopoly Policies & Enforcement

The airlines are in crisis. I’ve been working in, writing about and advocating for passengers against the airlines for 37 years, and I’ve never seen such a confluence of full flights, skyrocketing airfares and chronic flight delays and cancellations.

The statistics tell the tale. According to the Department of Transportation, in the first quarter of this year consumers logged more than four times the complaints filed in pre-COVID 2019, and there’s little doubt those numbers are climbing.

Meanwhile, surging pent-up demand and a lack of seats have sent fares soaring 45% since before COVID-19. What’s worse, we’ve seen record numbers of flight cancellations, about 122,000 so far this year, and far too many are being announced at the last minute, stranding hundreds of thousands of passengers at airports.

The constant media barrage recently has confirmed we’re enduring maybe the worst summer in the history of the nation’s airlines.

Who is at fault for flight cancellations, high prices and delays?

If you listen to the airlines, you might believe none of this is their fault. They are using the oldest blame game in aviation – it’s all due to weather and air traffic control. As an FAA-licensed aircraft dispatcher who spent seven years in airline flight operations, I can testify this summer’s meltdown is not outside the airlines’ control, but clearly driven by the shortages of pilots and other staff that were encouraged by early retirements (despite a taxpayer bailout specifically directing airlines to maintain their workforces).

Yet most airlines in the United States have not been upfront in reducing flight schedules and instead continue to accept bookings – and payments – for flights they reasonably cannot expect to operate.

But this crisis is not simply the fault of the airlines, it is also a crisis for the Department of Transportation (DOT), the regulatory agency tasked with overseeing the industry. Transportation Secretary Pete Buttigieg has refused to force airlines to adjust schedules and cease selling tickets for phantom flights. Buttigieg’s regulatory choice to be lax encourages the airlines to continue to sell flights they know they cannot staff.

Nonetheless, to put it all on Buttigieg risks overlooking the long-term structural problems in the industry. For those of us immersed in fighting for fairness in aviation, 2022 is not an anomaly but rather the inevitable outcome of decades of willful neglect, corporate greed, dramatic consolidation and mindless cost cutting.

To understand why, it helps to start with the basics of the industry. Since their creation through public subsidies via air mail contracts, America’s airlines have been a public utility. Access for all Americans to the global economy via commercial aviation is no less vital than access to electricity or the internet. Airline CEOs themselves concede this reality when asking for taxpayer assistance, which they did both after 9/11 and during COVID-19. Our airlines are vital to the nation’s economy, infrastructure, security and defense.

Yet since deregulating the industry in 1978, we have chosen to regulate these carriers not as a national resource, but through a policy framework that encourages short-term and shortsighted profitability for a handful of executives and investors – at the expense of consumers, labor and entire cities.

The flaws of deregulation were massively amplified by consolidation, which was facilitated by both the Department of Transportation and weak antitrust enforcement.

As someone who testified numerous times in Congress against the megamergers that shrunk the six largest hub-and-spoke airlines into the Big Three of American, Delta and United, many of us predicted a decade ago that airlines were growing “Too Big to Fail.

So, what hope do passengers have? The answer lies in reforming the industry itself and eliminating systemic limitations in government oversight caused by deregulation. The Airline Deregulation Act included a “federal preemption” provision prohibiting enforcement of state laws “relating to rates, routes, or services of any air carrier.”

What this means is that for 44 years, airline customers have had fewer consumer rights than with virtually any other industry in America: State courts, state attorneys general and state legislatures are powerless to protect passengers. Simply put, aside from Congress, the Transportation secretary is the only sheriff protecting airline passengers, and the two most recent sheriffs have not stepped up.

Elaine Chao, President Donald Trump’s DOT secretary, did not take action on a range of issues, from inflight masks at the height of COVID-19 to flight refunds during the lockdowns. She even ignored a 2016 congressional directive for the DOT to prevent airlines from charging fees for families with young kids to sit together.

Buttigieg’s record on flight cancellations, refunds and family seating rivals Chao’s. Recently, he issued a notice “urging” the airlines not to charge fees for families to sit together, followed by a DOT “review” in four months, which might then be followed by a lengthy rulemaking. All this six years after Congress already acted on this issue.

While the airline industry is clearly in crisis, a regulatory model that relies upon an agency that sees the airlines as its clients is inadequate.

Broaden the powers of regulation

The most practical first step in addressing this crisis is to eliminate the federal preemption clause and give passengers the same rights they have with all other American corporations. State governments have proved to be eager to protect their citizens. For instance, in 2008 the New York legislature passed an Airline Passenger Bill of Rights, and there have been countless lawsuits filed by consumers against airlines. Courts repeatedly cite federal preemption in dismissing these attempts to protect consumers.

It has gotten so bad that in 2020, Attorney General Phil Weiser of Colorado publicly pleaded with then-Secretary Chao to take action against Denver-based Frontier Airlines for its chronic failure to issue flight refunds because his office was unable to take action.

Removing federal preemption would shift authority from regulators like Chao and Buttigieg and put it into the hands of people like Weiser, who want to protect passengers.

If the Department of Transportation won’t protect us, then we must broaden the powers of those government officials who will. It’s also time we had a national conversation about the state of the nation’s airlines, a conversation we haven’t had in more than four decades. We must consider new reforms and new oversight that will provide fair, consistent and economically reasonable access to air travel for all Americans.

Airlines are a public resource, and we should regulate them as such.