Secretary Buttigieg Tries to Turn the Screws on the Airlines, But There is No Easy Solution

Government Regulation

Secretary of Transportation Pete Buttigieg summoned the airlines to a meeting saying what basically every American has been thinking this summer… “stop your operations from sucking.” It is a good sentiment, and the airlines publicly said conversations were constructive… though they immediately followed that up by canceling Buttigieg’s flight to New York. Brilliance in action. There is clearly a broad problem, but finding a solution? That’s not so simple.

CNBC reports that Buttigieg wanted to make sure that the awful operations that ruined traveler plans on Memorial Day don’t repeat themselves over the 4th of July. I’d like that too, so would the airlines, and so would everyone else. But unless he has a direct line to the weather gods, there’s no way to guarantee that. Still, he’s made his position fairly clear: make sure the weekend goes smoothly or he will consider action against them.

The airlines have been running miserable operations as they come out of COVID. We all know that. But what happened on Memorial Day was more than that, it was bad weather on the Friday before the start of the holiday weekend that really pushed everything over the edge. Take a look at performance since May 1 via masFlight data for the top 10 US airlines.

Completion and On-Time Performance By Date – Top 10 US Airlines

Data via masFlight/Anuvu, includes American, Delta, United, Southwest, Alaska, JetBlue, Hawaiian, Allegiant, Frontier, and Spirit

The first bar highlighted in red is that Friday before Memorial Day. Performance was not good. But then look as the number of flights has continued to grow each day as we get into peak season. June 9 had 1.5 percent more flights operating than on May 27, but completion factor was 4 points higher at an acceptable-but-not-stellar rate of 98.4 percent. Arrivals within 14 minutes were nearly 3 points higher.

Then you can look at the last red bar there as well. That was last Thursday when it seems like every airport on the entire east coast had a ground delay program in place due to weather. It was bad, and performance absolutely tanked. It was downright bad through the weekend as they tried to recover… simply adding fuel to the fire. But, what is the solution?

There is great variability in what airlines can operate depending upon external conditions on any given day. So how should the airlines be scheduling? You could say that airlines should schedule assuming good weather and then use all the tools they have to make things work as best they can when bad weather hits. It will be bad on those days. Or you could say airlines should schedule for the worst case scenario. Operations will be great, but there will be a lot fewer flights. You think fares have gone up a lot now… just wait until you have to trim more capacity out of the system.

The feds are presumably torn on this as well. After all, they don’t want to force airlines to cut back and then let them point fingers at the feds for all those high fares. It’s not a great look for any administration. So what is the right answer? There isn’t one. Buttigieg can call the airlines out and make it look like the feds are doing something, but I would imagine that it won’t actually change anything. It’ll just make it look like the feds are on the case. Optics are everything.

Buttigieg has indicated at least some understanding of the situation, and he says that airlines should at least be able to hire more customer service people to help rebook travelers when things go wrong. That may be true, but what are they rebooking them on if flights are full on that airline? Or what if they just don’t have more flights, as if often the case with the Ultra Low Cost Carriers?

I still like the idea of mandated reaccommodation policy that would require all airlines to put passengers on other airlines at predetermined rates. In other words, bring back Rule 240 and expand it to apply to all delays and cancellations including those outside of airline control. But I don’t imagine that’s the kind of “action” that Buttigieg is talking about taking.

More likely, the airlines will run a poor operation when the weather is bad, they’ll end up being fined, they’ll negotiate it down to something smaller, and then they’ll go back to doing everything the way they always do.

35 comments on “Secretary Buttigieg Tries to Turn the Screws on the Airlines, But There is No Easy Solution

  1. I’d agree that Secretary Buttigieg and the airlines are in a tough spot right now. Each side needs to be seen as doing something, ANYTHING (as this post says, “Optics are everything”, which is very true), though much is largely outside their control.

    For the airlines, it’s clear that there is a significant risk that if cancellations/delays persist as a story, they risk having have additional rules/regulations forced on them, if just so that the politicians can appear to be doing something. I’m not sure how great of a comparison the current situation is to the tarmac delay debacle from years past (I’d love to see an analysis by Brett or another well-informed analyst comparing/contrasting recent events from the past months with those that led to the imposition of the tarmac delay rule), but that’s what comes to mind.

    Finally (and I don’t mean to pick on the current administration or on Secretary Buttigieg here at all, and I’d be saying this regardless of any political affiliation), I find it quite telling that when the Secretary of TRANSPORTATION’s (emphasis on “Transportation”) recent flight from Washington to New York was cancelled, he chose to **drive** to NYC, instead of taking Amtrak.

    I’m sure that there was a very valid reason for the Secretary to make that decision, but the optics of it aren’t great, especially when it sounds like the train was never considered at all. At the very least, that is a missed opportunity… Both in terms of politics and in terms of the potential to promote Amtrak (or even Greyhound or so-called “Chinatown buses”) as alternatives to driving/flying, and to nudge people towards greener/alternative forms of transportation, or to otherwise promote a pet project of the administration that relates to transportation. Again, I don’t mean this in a partisan political way, but when the Secretary of Transportation has his commercial flight cancelled on what is perhaps the best Amtrak route in the country and chooses to drive instead of take the train… That’s a powerful implied message.

    1. “I find it quite telling that when the Secretary of TRANSPORTATION’s (emphasis on “Transportation”) recent flight from Washington to New York was cancelled, he chose to **drive** to NYC, instead of taking Amtrak.

      I’m sure that there was a very valid reason for the Secretary to make that decision, but the optics of it aren’t great, especially when it sounds like the train was never considered at all. At the very least, that is a missed opportunity… Both in terms of politics and in terms of the potential to promote Amtrak (or even Greyhound or so-called “Chinatown buses”) as alternatives to driving/flying, and to nudge people towards greener/alternative forms of transportation, or to otherwise promote a pet project of the administration that relates to transportation. Again, I don’t mean this in a partisan political way, but when the Secretary of Transportation has his commercial flight cancelled on what is perhaps the best Amtrak route in the country and chooses to drive instead of take the train… That’s a powerful implied message.”

      I agree to a point, since we don’t know is final destination. If it was in Manhattan or someplace nearby , then you are 100% correct as Amtrak suits that need perfectly.

    2. Amtrak was completely full, and therefore not an option. I’d say they operate 70-90% full without having to accommodate an influx of airline passengers. But with 75 fights per day between NYC-DC, and most of those passengers now without a flight, many looked to Amtrak and scooped up those last available seats.

      1. Ah, that would make sense, thanks.

        It’s been years since I’ve taken Amtrak, and I’m not familiar with its recent load factors, how reliable it is, or with its occasional disagreements with freight RRs over use of the rails.

        I recall more than one Amtrak trip through DC in the ’00s where Amtrak transferred passengers to Greyhound buses due to delays and/or rail congestion on certain segments of its network, but the train was still a solid way to travel and avoid the NJ turnpike.

        1. The tracks that the Northeast corridor rail lines run on are either owned by Amtrak or the states for passenger use, so they don’t tend to have delays for freight trains.

          That points to one of the things that the administration could also prioritize again, requiring that freight lines follow the law and give priority to passenger trains.

  2. Irops should mandate priority rebooking on next flight (not next same airline operated available flight). Which would push for both higher completion and/or additional seats to be found …

    1. The problem with this is that if there are no additional seats or crew capacity to increase completion rates, then you create a series of rolling bumps. Restoration of Rule 240 would be more helpful, but not a perfect cure.

      As for Buttigieg not taking Amtrak, it’s possible that the trains (or at least the Acela) was booked, and security at a Greyhound station (or a “Chinatown bus” stop) would be a nightmare.

    2. I’d take mandated rebooking of any kind! I had my flight canceled by this past weekend’s mess, and the airline wouldn’t even offer me a flight to rebook onto, just gave me a travel voucher for a future flight.

      1. The problem is…what are they going to rebook you on? The flights are full already.

        Reality, people. Our our travel system (rail also) is near capacity. It will take time to bring in enough staff to fix it. This is why JetBlue is so desperate to buy Spirit. They want the staff, not the airline.

  3. Buttigieg seems to still be looking through the same lens as a lot of people; that airlines are a huge magnet drawing applicants from all corners. That may still be true for pilot jobs (and a few others), but it is not for customer services.

    Carriers spent years doing everything they could to discourage people from making it a career, and now we’re seeing the consequences of that; Low starting wages, terrible start times/days off, working out in said thunderstorms (or being screamed at by passengers). Why not just go work in a Target warehouse?

    1. I’ve never worked at an airport or for an airline, but I would agree with your logic, Kevin.

      As a passenger, I often think about how much of a hassle it must be for the airline employees to shlep out to the airport (though public transportation to airports in many US cities seems to be used more by airport workers than by pax, whether intended that way or not; looking at you, ATL), go through security (if required), etc etc… I hope that people working at the airports get paid a premium (or get other benefits/perks) to help compensate for the additional hassles. Somehow I doubt it, but I guess the labor market has a way of correcting those things if not. To be fair, many of the people I interact with at airports seem to at least tolerate their jobs and take pride in them.

      I’m not sure if it’s still the case, but I know for a while there were challenges finding enough eligible applicants to fill roles at the cargo terminals at airports, which was causing delays in sorting cargo and getting it to consignees… Between getting people who are willing/able to commute to the airport and work in all types of weather, plus pass drug tests and security checks, working in the air cargo terminals definitely isn’t for everyone, and I’m sure the same can be said for most other airport jobs.

    2. From my experience working for a ground handler that was a division of a major carrier, this describes well my experience. For most of my time at the station (until a panicked increase in the hourly wage took place as we kept losing trained staff to other companies) staff was paid well under the starting wage at local Targets, Wawa, Walmart, etc., and that was before union dues were calculated. The tradeoff was the flight benefits (we boarded based on seniority with mainline employees, not at the bottom) and originally my station had two turns a day mid-morning with four on, three off work days. Pretty nice and it was easy to trade a day with others to extend time off to use the flight benefits or have a second job, whatever you needed. Then the expansion of flights hit, staffing levels didn’t keep up, you added in late evening arriving RONS and early morning departures you had to staff for, and suddenly everyone was working 35+ hours per week. Stimulus checks hit and airlines threw capacity into Florida with schedules that looked great on paper (ten minute breaks between turns) that never happened in reality and then the inability to use your flight benefits because management would schedule you to close on your last night before your days off (get off work around 1:00-2:00am) and then open on your first day back (5:00am arrival) making it very difficult to travel anywhere, making the flight benefits irrelevant. Finally the inability to even move out of the airport operations roles to something in corporate sealed it for me, and others, that this was not a viable career path, as much as we loved aviation and wanted to stay.

  4. In the old days, Eastern Air Lines would have an extra Lockheed Electra at LGA to carry the Secretary down to DCA. It was a guaranteed seat on the Eastern Shuttle, even if you were the only passenger.

    1. I’m just glad (and a little surprised, honestly) that whatever airline the Secretary was booked on didn’t go far out of its way to avoid cancelling his flight simply because of the VIP on the manifest.

      (I don’t want to know what airline he was booked on. Whichever airline it was, however, I will give that airline credit and assume they “knew” of the Secretary, but chose to do nothing either out of a sense of ethics or because they were scared off by the $2m slap on the wrist that United got 5 years ago for the infamous “Chairman’s Flight”.)

  5. I can see rule 240 if it’s a weather delay at the connection hub and that is why your plane is delayed (traveling from TLH to MCI connecting in CLT on AA, but thunderstroms in CLT, moved to DL through ATL with clear skies), but if the weather is at the O/D, who knows what “the next flight” will be.

    If you’re booked on the UA JFK/SFO flight at 9am, but cancels due to weather in NYC, a bunch of people get booked to the 915am DL flight which cancels a few minutes later, so now a bunch of passengers from both UA and DL are now clambering to get on the 930am AA flight that’s going to cancel a few minutes after the DL flight.

    It’s going to create absolute chaos as flights get delayed, the more delayed, then less delayed, then cancelled, and then an extra segment gets added on one carrier.

    It’s also going to create an incentive for carriers to not cancel/delay flights in a timely manner

    1. Agreed.

      What you described sounds like a “gate lice” frenzy (albeit at the customer service desks & kiosks) waiting to happen.

      Any rule that is implemented needs to carefully consider the unintended side effects of the rule, and how the players of the game will change their behavior to accommodate the new rule.

  6. As always, the strength of CF in industry discussions is in using data to identify precise problems and to suggest reasonable alternatives and solutions – an approach that is unique among aviation journalists.

    The graphic that needs to be included in this discussion – though it is not easy to obtain – is the amount of ATC delays by airport or ATC enroute center. Airlines have exact figures and they will certainly confirm that ATC delays are far, far higher than they normally are even with summer weather. While the airlines are not fully staffed, ATC staffing is well below normal levels and that is seen best in places like JAX center which is essentially the aviation gateway to Florida. Given the oversized importance of Florida to the airline industry, repeated delays to/from/over Florida disproportionately impact the US aviation system.

    The other Achilles heel is NYC air space and airport capacity, esp. EWR. As the only one of the big 3 NYC airports that is not slot-controlled, EWR will always see disproportionately more traffic than it should. UA is now cancelling EWR flights 2 or more days out because it knows when ATC delays are likely and that the airport simply cannot handle the volume.

    To add perspective, a number of European airlines are limiting capacity at the airports because they don’t have the staffing; the global economy is understaffed post covid.
    Hiring customer service agents to better reaccommodate travelers sounds good but the real need is to fix the reasons for repeatedly delays – which is that airlines and ATC have much thinner staffing margins which are eroded when weather hits. Hiring people and having them fully trained for their jobs is very different.

    The summer will be challenging for everyone even though virtually all airlines have cut summer schedules repeatedly. Fares are high which does look bad for the industry esp. when service is bad but demand will return to more normal levels after the summer. As much as anyone doesn’t like it – and no one does – it will take time to get things back in balance just as it does with ports, restaurants, and other customer service functions.

    Let’s also remember that very high air fares are partially the result of very high fuel prices which is about as anti-consumer as possible.

      1. Some may not remember but the reason why the FAA eliminated slot controls at EWR was because United was operating less than the required percentage of flights and it already had the highest percentage of slots at any of the airports that were slot controlled at the time (LGA, JFK, EWR and DCA). The FAA removed slot controls to allow other carriers to come into EWR and there has been a steady rotation of low cost and ultra low cost carriers adding and then pulling back flights. UA, in turn, has upped its own schedules which has put even more pressure on schedules. UA’s answer this summer has been to cancel mid-single percentage of its EWR flights, largely coming from Republic which might be having a hard time staffing the Ejets they are flying for UA anyway.
        Even though EWR is way overscheduled for the runway capacity of the airport, it is unlikely slot controls will return because it essentially protects United from new competition. Given that United recognizes that the airport cannot handle the capacity that is scheduled, the best solution from a consumer standpoint is for UA to pull down some of its own flights and likely rebook connections over other hubs and local EWR passengers on flights other than the times they bought. It is also worth noting that UA will be aggressively replacing regional carrier flights with its massive MAX order which means that they will have to cancelling more and more UA mainline flights in the near future.

        As for the comment below about airlines receiving federal funding, the amount received was far from 100% of pre-covid salary expenses – let alone salary and benefits. Yes, the government expected airlines to handle traffic demands post covid which they cannot in part because of retirements but also because there were massive fleet changes during the pandemic that took place which required pilot retraining. Further, ATC is facing the same root issues as the airlines including as part of the Great Resignation which has marked all sectors of the workforce; millions of Americans used the savings they received from the stimulus to simply walk away from the workforce including the FAA and airlines.

        There is no doubt that all of the money that was thrown at the airlines was not spent as intended but it was not reasonable to expect any amount of money to keep the world “as is” until covid became history.

  7. I believe Pete is in over his head, another poor choice by Biden (see Port of Long Beach).

    Stop playing Politics and paying back for votes and put problem solvers in these important positions, please.

    1. I didn’t realize Pete’s responsible for the same problems that are happening in Europe. Weird too how the cost of gas being so high in Canada is Biden’s fault as well.

  8. Meanwhile in Europe we have some action after similar meltdowns. Gatwick has decided to cut c 100 movements a day from operations in July and August (presumably split between the airlines pro rata, so largely falling on EasyJet) because of a shortage of ground staff (in all aspects – security, baggage handling, etc.). EasyJet are not too disappointed because they’re struggling with their own staff shortages, so this and a similar request out of Schiphol gives them cover to cut 7% of their schedules this summer. In the UK at least the issues are around recruitment with the bigger bottleneck being the security vetting process, so airlines just can’t get the staff onboard quickly enough, and the approach now is to cancel flights during the school holiday period early (as compensation is not payable with 2+ weeks notice) rather than ruin people’s holidays at the last moment. There’s a fair bit of wetleasing going on to cover things too.

    On top of the systemic issue there are the usual additional hassles. Heathrow cut 10% of flights from T2 and T3 today because of weekend baggage issues. Ryanair face a series of uncoordinated but remarkably well sequenced labour strikes in different countries over the next few months. And I am sure there must be ATC striking somewhere too…

    But yes, as someone says above, all this can’t be helped by the tightness of the labour market post-Covid and the relative unattractiveness of airport jobs compared with other customer service roles…

  9. Suggestion for Buttigieg: Temporary Results Improvement Plan, aka TRIP act for next 24 months

    Adds Bonus Multipliers to Airline Management Bonus Programs: Completion_Multiplier = (Completion%)^2 + 6%

    100% Completion leads to 106% multiplier = reward strong performance = carrot
    97% Completion leads to 100% multiplier = set expectation of performance
    95% Completion leads to 96% multiplier = punish weak performance = stick
    90% Completion leads to 87% multiplier
    85% Completion leads to 78% multiplier

    Management is used to Board developed Pay-for-Performance Plans, this just adds in a Government developed Pay-for-Performance element.

    The metrics, data collection, and data reporting mechanisms all exist so this would be quick and simple to implement.

    My bet is every airline would start focusing on fixing ALL the problems, both internal (schedules, staffing, equipment) and external (airports, air traffic controllers, etc).

    The Pandemic created so many disruptions to Supply and Demand curves that everybody (consumers, corporations) are taking forever to get to the new normal (equilibrium). This might speed along the process.

    1. That could be a solution except that it’s not really possible for the government to simply dictate what a private company pays its employees.

      Even if it were a solution, it would incentivize carriers to cut schedules more leading to fewer flights and higher fares since that would be the simplest way to “fix all the problems” at once.

    2. It’d be interesting if they applied this plan to the flights purchased for the government. If you run a 100% completion factor with a limited number of delays (to prevent copying DL’s habit of running the flight in the middle of the night.) you’d get a 6% bonus of all government tickets purchased during that month. Likewise, there would be a discount on ticket prices if those flights don’t complete at an acceptable rate.

      (And perhaps you’d have to limit the stats for only the city pairs that each airline has won in bidding for the government.)

    3. You act as if the airlines are sitting on their hands doing nothing.

      There are so many issues that are out of control of the airlines. Nothing that you suggested above will help.

      Staffing shortages and supply issues that are plaguing the airline industry are plaguing most every industry right now all around the world. The airline management team does not need more compensation to fix the problem because A.) The problem is not fixable in the short term and B) they already know what the issues are but are struggling just like every other industry, to fix the issue.

      Shoving more money at the problem only amplifies the inflation issue. Everything will be f’d up for a while. Get used to it.

      Instead of the government pointing fingers at everyone, they should be focused on fixing the supply chain issues on the coasts to help alleviate the issues companies are facing. This administration is clueless. It’s like watching a clown show.

  10. Politicians of all stripes seem to need scapegoats. The idea of actually accepting responsibility for what they do or don’t do is totally foreign to their “always blame the other” psyches. Data are quite useful when applied as intended and not misused.

  11. It is again important to note, as is often seemingly forgotten these days, that these very airlines suffering with staffing issues are the same airlines that received billions and billions and billions of United States taxpayer dollars under the *express understanding* that these bailouts – among the largest for any industry in history – were meant to *literally prevent this exact scenario from happening.*

    What did airlines do with that money, which nearly covered the entire payroll for 1.5+ years? They *still* laid people off, asked for voluntary early-outs and downsized. Why did they do that? Because they viewed post-covid *financial* success as more important than *operational* success.

    These airlines deserve every regulation that could get slapped on them. They blew it and they have only themselves and their 20-year-long quest to financialize their businesses to blame. Shame on them.

    If I was a Senator overseeing the Transportation Committee, I’d be asking some *really, really tough questions* to executives about what they did with our money.

    1. The airlines did the same thing almost everyone else did with the money – survive. Without it they would have gone under.

      1. The airline bailout money basically only covered them thru October 2020. The downturn in travel lasted much longer than that. As soon as the October date hit, the layoffs and furloughs began. The only way to avoid that would be ANOTHER bailout payment and I don’t think any politician would have been able to sell that, esp when the airlines got much better support than say restaurants.

        1. Maybe take a look at your calendar, again. They also received funds from January 2021 to Sept. 2021. The CARES Act had an extension; politicians were just fine giving it out again. It is also not as though airlines made zero revenue in 2020 and 2021. They just chose to cut to the bone rather than build resiliency. Their financial performance, again, was more important than their operational resiliency.

          Keep in mind that *right now* airlines are nudging their revenue guidance *higher.* Airlines are making a fortune, again. Yet somehow they can’t manage to run the operation?

          Something’s wrong here, and it doesn’t take much to figure it out.

  12. While I understand airlines don’t create schedules based on irrops, some of these carriers are still scheduling mighty quick turn times with no padding. Delta gets it right – Even a 717 has more than hour on the ground at its hubs, but AA, for example, is still scheduling A319s with 35 outstation turns in the peak of the afternoon. I mean, really? Who can deboard/board a combined 240 pax, plus dump/load bags, cargo and mail all in 35 minutes – even in perfect conditions? I realize even a 2 hour turn time won’t help when the crew is 3 hours late on a different inbound, or there’s an extensive GDP, but it would absolutely help given staffing challenges. Having a bit more ground time adds in some padding for recovery. During normal times, the bean counters at some carriers would never even consider this. But these are not normal times. Being realistic is key. Anyway, this is one piece of a much larger puzzle. Other pieces are having good crew scheduling practices, airplanes with enough downtime to complete needed maintenance, and the gov’t investing in ATC improvements, among others.

  13. Buttigieg blaming the airlines for the current issues is further confirmation that this administration has no clue wtf is going on.

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