This article is part of TPM Cafe, TPM’s home for opinion and news analysis.
From 2016 to 2020, the Department of Transportation (DOT) was a dumpster fire. President Donald Trump appointed Elaine Chao, the Secretary of Labor under George W. Bush and Sen. Mitch McConnell’s (R-KY) wife, to run a department whose mission she either did not support or did not understand. Chao rolled back a panoply of rules and regulations. When COVID-19 hit, Chao allowed airlines to avoid imposing safety measures and paying refunds owed for flight cancellations—a decision that cost consumers billions.
By contrast, Transportation Secretary Pete Buttigieg has made the department responsive to the concerns of ordinary Americans. But, as with much of the federal government, the Trump-era damage has not been undone. While he has made progress on some fronts, Buttigieg’s DOT tenure shows him failing to keep a basic charge: using his authority to enact sound policies and undo bad ones.
Last night, in his State of the Union address, President Biden highlighted issues with the airlines. In particular he elevated his call from last week for DOT and Congress to crack down on junk fees and ensuring passengers get refunds when flights are canceled or seriously delayed. Those are essential measures that need to be taken. However, Biden’s calls come after two years of Secretary Buttigieg opting not to address those very issues head on.
To be fair, Buttigieg has certainly faced unfair criticism from conservatives eager to sully the name of a rising star in the Democratic party. Donald Trump Jr. has said that Buttigieg only got his job because of his sexuality, which is obviously a vapid dog whistle. And Fox News had a field day when Buttigieg was taking paternity leave to care for his young twins. Those attacks are obviously made in bad faith, but there are still real harms festering on Secretary Pete’s watch.
More than anything, Buttigieg’s neglect centers on air travel regulation, where he has done little to undo the damage he inherited from the Trump administration.
Buttigieg’s oversight of the airlines remains strikingly similar to Chao’s. Both secretaries mostly declined to use their regulatory power to directly intervene in how airlines treat their passengers. (A DOT spokesperson insisted that Buttigieg was not “hands-off” on air regulation, citing that he “secured written guarantees…to cover meals and hotels if the airline is at fault for a cancellation or delay” from several airlines.) Such inaction is glaring because only the federal government has the authority to regulate airlines. That’s why this past summer, no state courts, legislatures, or attorneys general were able to investigate the chaos brought on by the airlines’ diminished workforces and ensuing consumer complaints. There were more canceled flights in the first six months of 2022 than in 2021. Of course, some of this is unsurprising, with Americans traveling more after being cooped up by the pandemic. But, since that predictability made the problem foreseeable, the hapless response from DOT is still alarming.
Others have tried to do some clean up for the DOT. Colorado Attorney General Phil Weiser publicly expressed his frustration at being blocked from regulating Frontier Airlines, which is based in his state. Weiser called on Congress to “give state AGs the authority to enforce federal and state consumer protection laws against the airlines so when they mistreat consumers, we can do something about it.”
Although the American Economic Liberties Project (AELP), a nonprofit dedicated to fighting monopoly power in the American economy, is pushing to abolish federal preemption of airline lawsuits, for now, holding the carriers accountable is up to Buttigieg. “The Secretary is the only sheriff in town when it comes to the airlines,” William J. McGee, AELP’s Senior Fellow for Aviation said. “And he has been derelict in protecting passengers.”
In 2021, the DOT issued its fewest enforcement actions in over a decade. By that measure, DOT was more hands-off under Buttigieg than Chao. At the same time, airfare prices surged, allowing airlines to profit from the mess. DOT’s spokesperson pointed out that the department issued more fines in 2022 than in any previous year, but some of those would have been fines for transgressions in 2020 and 2021, when the department levied very few penalties.
Consumers are owed more than $10 billion in refunds from cancellations just since 2020. Buttigieg, for two years, repeatedly said these offenses were being investigated, but from 2020 to summer of 2022, he only fined a single airline, Air Canada. His DOT often points to that one example while brushing aside the bigger problem.
Despite this “record-setting” fine of $25 million (which is 0.52 percent of Air Canada’s 2021 profits), the fine was negotiated down to around $4.5 million – just 0.045 percent of what consumers are owed. For another, the airline all but asked for the fine by withholding refunds. (Many other airlines try to circumvent the law by offering vouchers or seats on other flights.)
Additionally, DOT recently announced rulemaking that would block airlines from withholding consumer refunds. Unfortunately, that rule would not be retroactive, meaning that consumers still couldn’t recoup the $10 billion they are owed. The rule also does little to strengthen enforcement, mostly just affirming existing requirements.
Last November, NBC reported that the DOT was fining six airlines $7.4 million while requiring them to return some $600 million to consumers as refunds. That’s a start, but it represents only 6 percent of the $10 billion owed to consumers. Five of those airlines are foreign: TAP Portugal, Air India, Aeromexico, Israel’s El Al, and Colombia’s Avianca. The only domestic carrier was Frontier, which will have to return $222 million to passengers. Buttigieg has yet to take on any of the major American firms that dominate the skies, such as Delta, American Airlines, or United—the last of which had more than twice as many customer refund complaints filed with DOT as Frontier.
A DOT spokesperson confirmed that no other domestic airline was under scrutiny for refunds, saying, “We do not have any cases against U.S. carriers other than Frontier because the other U.S. carriers took corrective action shortly after the Department reminded them of their obligation [to provide refunds].”
That decision has not aged well, with Southwest canceling as many as 60 percent of its flights over the holidays this winter. The airline estimates that the debacle will cost it more than $700 million. If DOT had held the major airlines to account and investigated why so many refunds were owed and so many flights canceled in the summer of 2022, they could have initiated enforcement action. That in turn would have imposed some level of deterrence to airlines relying on ancient IT infrastructure and inadequate staffing. Southwest’s failure is exactly the type of situation that is invited by lax regulation and laxer enforcement. If companies are permitted to continue to get away with leaving consumers stranded at airports, they have no real incentive to improve their logistics. The result is passengers left to bear costs, both economic and personal.
Following Southwest’s total failure in December, they were given a deadline to issue refunds to impacted passengers. They’ve already missed that deadline. It’s deja vu all over again. When the airlines get away with not refunding customers billions of dollars, why wouldn’t they keep doing it?
Now, Buttigieg is facing pressure to take a tougher stand this time around, with 26 Democrats urging him to throw the book at Southwest. Meanwhile Southwest just gave their executives promotions in a move that seems almost meant to tease how unafraid they are of regulation. Airlines remain emboldened by this lack of accountability. After all, as Robert Kuttner noted in The American Prospect, “the airlines have nothing to fear from the transportation secretary.”
Despite having broad powers to protect consumers, particularly under the DOT’s unfair and deceptive practices rule, Buttigieg (like Chao) prefers to avoid confronting airlines. As Jeff Hauser, Executive Director of the Revolving Door Project, notes, the longstanding commitment of DOT to champion the airlines jeopardizes any ability to be taken seriously as a regulator.
For decades, the DOT—specifically the Federal Aviation Administration (FAA)—balanced a mandate to promote and regulate airlines. While that mindset pervades the department, it is no longer legally required. As recently as the Obama era, the FAA website included language calling airlines their “customers” (for more on this, look at McGee’s book). When asked about this, the DOT spokesperson demurred, saying only that safety was the FAA’s top priority.
Between the categorical failure to rein in airlines and general lack of action, there’s a lot for Buttigieg to do. Rulemaking is a lengthy process, often taking years, and that’s a big part of why consumer advocates consider the delay devastating. The best time for swift and deliberate action from Secretary Buttigieg was two years ago, and the next best time is now.
NOTE: For any readers who have not received a refund from an airline, the Department of Transportation encourages you to lobby a complaint here.
Dylan Gyauch-Lewis is a researcher at the Revolving Door Project.
