All the quotes are from McGee, who also provides some history at the outset about how it all goes back to deregulation in 1978 where the explanation was roughly "capitalism will make it all work out". Then, several airline mergers (all with congressional approval) later, there are four US airlines that control approximately 85% of the air travel market. There are also fewer new entrants into air travel (which was the opposite of what was expected in the text of the Deregulation Act) because people don't want to invest in airlines with lower fares simply because they will make less money.
"This is a systemic problem. The DOT is a broken regulatory model. Since the first day, it was sort of baked into the DOT, that it would have this dual mandate that it would support the industry and regulate it. It's something that can't be done. It's one of the other. And by the way, the airline industry does not need to be supported by the government at this point. They are the seventh largest industry in terms of lobbying dollars, according to opensecrets.org. They do just fine."
"The real issue is that the airlines are over scheduling, they are operating at peak capacity. 24/7 transportation systems are not designed to operate like this."
"He (Pete) is the only sheriff in town. And I don't think we can discuss the airline industry and its problems without this critical context. It's two words, it's a legal term called federal preemption. And basically, at the last minute, in 1978, when deregulation was passed, and President Carter signed it, they added this thing that said, basically, only the federal government will have authority over the US airline industry, and even more specifically, only the US Department of Transportation, and Congress. You have to really understand that to have any kind of conversation about what's been happening. And far too many people don't understand it, and I get it. It's a very geeky legalistic term, I've talked to lawyers that don't know what it is.
The bottom line in plain English means as it as a consumer in the United States, you have fewer rights dealing with an airline than you do with virtually any other industry. You cannot sue in state courts, you cannot file class action lawsuits in state courts, state agencies, the attorneys general across the country, do not have any authority of the airline industry, state legislatures have passed bills to rein in the airline industry, they immediately get shut down by Federal Court on appeal. So what we have is the thing that we were all told in seventh or eighth grade is not supposed to happen in America checks and balances, there are none.
We have one person who is the czar of the airline industry. And, as I said, I've been very critical of Secretary Buttigieg. And I think my criticism has been fair and accurate. But the bottom line is, he's got plenty of predecessors too, who were the same way. And so you have this systemic problem, not years, decades, where the DOT doesn't rein in the excesses of the airline industry, and no one else can."
"Think about it for a moment, all of these crises with the flight cancellations with the $10 billion in unpaid refunds since COVID. Started, as a friend of mine said to me, who also does this type of work, he said, we wouldn't even be talking about this If this was any other industry, because if the DOT failed to act, people would have been filing class action lawsuits. You owe me money, there would have been refunds pay.
The state attorney general, in Colorado, Phil Weiser. He said, you know, Frontier is in his backyard in Denver. They were not paying refunds. And he said, If it was any other industry put out a press release. He said publicly, I can't do anything. My hands are tied. Any other industry, I'd be all over the state legislatures would have passed laws saying you know, that it reign in this industry. So you can't stress it enough.
When I hear people say, 'Well, what can the Secretary of Transportation do? If the Secretary of Transportation doesn't act on the airline industry?' There's nothing to do. We have no other choice.
There's Congress, but obviously, Congress takes a while it's a long, cumbersome process. There are political considerations. It's very hard to get back. Trust me, I have been advocating for legislation in Congress for decades now. But with Senator Buttigieg, if he had reigned in the excesses a year ago, six months ago, three months ago in the summer, if he had levied real fines against the airlines... We all know that he's very eloquent and he has good presence in the media. And we've seen him a lot in the last week and in the last months. And what is he saying? He's talked to the airlines, he's asked the airlines, he's requested that it's not good enough. This is an industry that has not had so much as a $1 fine at all in the last year and a half on any of these excessive and record breaking flight cancellations. This is an industry that I mentioned, the $10 billion in refunds."
