Warren, Padilla Demand Buttigieg Crack Down on Airline Industry's 'Rampant Unfair Practices'
It is well within the secretary of transportation's power to rein in airlines, the senators said.
Calling on the Biden administration to use its authority to protect U.S. travelers from "rampant unfair practices" by commercial airliners, Sens. Elizabeth Warren and Alex Padilla wrote to Transportation Secretary Pete Buttigieg on Tuesday to condemn the exorbitant costs, frequent flight cancellations and delays, and lack of transparency in the industry.
It is well within the Transportation Department's power to rein in airline companies, the two Democrats emphasized.
"The Department of Transportation has the authority to take meaningful actions to hold airlines accountable for avoidable delays and cancellations and stem the tide of airline consolidation," wrote Padilla (Calif.) and Warren (Mass.). "By utilizing its existing licensing and rulemaking authority, the department can improve experiences for travelers and help bring down exorbitant ticket prices driven in part by anti-competitive mergers."
"There is both a political and moral case to make that aggressively targeting airlines is necessary."
The lawmakers noted that 1 in 5 flights have been delayed this year, while nearly 122,000 flights have been canceled in the first half of 2022--more than the total number of cancellations for all of the previous year.
As Sara Nelson, president of the Association of Flight Attendants, told the Los Angeles Times last week, airline executives have scheduled far more flights this summer than they can actually accommodate in an effort to profit off rising travel demand following the first two years of the coronavirus pandemic.
"A major contributor is that demand has been coming back so quickly and airlines are jumping to try to meet it and overpromising and putting in too much capacity," Nelson told the newspaper.
Overbooking flights has been a practice used by airlines for decades, Warren and Padilla acknowledged in their letter, but "with passengers being booted off flights more and more frequently," they said, "the department could use its authority to end this practice altogether."
Currently, the Transportation Department requires only that "the smallest practicable number of persons" are denied boarding, but new rules and the threat of significant fines for frequently overbooking flights could incentivize airlines to end the practice, said Warren and Padilla.
Last week, Buttigieg appeared on "PBS Newshour" to defend the department's approach to the airline industry, noting that it "issued the stiffest fine in the history of our consumer protection program"--although, as the American Economic Liberties Project pointed out, the $25 million penalty was issued to Air Canada and was sharply reduced.
Under federal law, the department has the authority to stop airlines from engaging in "unfair or deceptive practices" and Buttigieg "may order airlines and ticket agents to stop such practices and may issue fines of up to $37,377 per violation," said Warren and Padilla.
The senators also addressed a root cause of airlines' exorbitant ticket costs, with prices skyrocketing by 47% since January: "increasing consolidation and dwindling competition."
Forty-four years after the deregulation of the industry, just four airlines--American, Delta, United, and Southwest--control 80% of the market.
"The secretary of transportation must grant these airlines the 'economic authority' to operate and must approve any transfer of operating certificates to another carrier, authority that gives the secretary de facto merger-blocking power," said Warren and Padilla. "Certificate transfers are only permitted when the secretary determines that a transfer would be 'consistent with the public interest.'"
"By using its statutory authority to block transfers that are inconsistent with the public interest and that would harm domestic competition," they added, "the department could stop anti-competitive airline mergers altogether."
The letter comes a month after Sen. Bernie Sanders (I-Vt.) and Pennsylvania Lt. Gov. John Fetterman, a Democratic candidate for U.S. Senate, called on Buttigieg to impose hefty fines against airlines that routinely schedule flights that they cannot adequately staff.
As Ross Barkan wrote at New York magazine last week, a concerted effort by Buttigieg to hold airlines accountable for their unfair practices would not only help millions of people, but could "potentially buoy the president's standing headed into a very tough reelection fight in 2024":
The federal government wields extraordinary leverage over airlines and could, at any time, crack down severely on their behavior. Unlike other large corporations, private airlines are not particularly popular with Americans. Amazon or Disney arouse warm feelings; Delta and American Airlines conjure hellish waits in overstuffed terminals and seats with hardly enough legroom for toddlers. There is both a political and moral case to make that aggressively targeting airlines is necessary.
Alex Sammon of The American Prospect expressed disbelief that the Biden administration has so far resisted calls from progressives to reform the industry.
Buttigieg's "commitment to the mainstream Democrat school of never angering one single person in power supersedes his own impulse for self-promotion," he tweeted.
\u201cThis is by far the most depressing thing about moderates\u2014they can\u2019t even do opportunism. They won\u2019t tax the superrich, they won\u2019t build a new train station and put their names on it, nothing.\u201d— Alex Sammon (@Alex Sammon) 1658423517
As the head of the Transportation Department, said Warren and Padilla, Buttigieg can and should "put an end to these harmful consumer practices and safeguard competition in the industry."