How Pete Buttigieg, lobbyists are fueling US airline crisis

Transportation Secretary Pete Buttigieg is coming under fire over disasters ranging from the airlines’ holiday meltdown to the train wreck that has spilled chemicals in Ohio — and critics are blaming his cozy ties with the industries he’s supposed to regulate.

Outrage over US air chaos spilled into President Biden’s State of the Union Address earlier this month. The commander-in-chief vowed to crack down on excessive fees, saying “airlines can’t treat your child like a piece of baggage” and demanded that “airlines show you the full ticket price upfront and refund your money if your flight is canceled or delayed.”

Less than a month earlier, however, Southwest Airlines — which had canceled 17,000 flights over the holiday season, blaming the weather amid a breakdown in its systems — promoted five top executives under the budget carrier’s new CEO, Bob Jordan.

That’s clear evidence that the airlines aren’t afraid of Buttigieg, critics say — despite the fact that the Secretary of Transportation has sweeping powers to hold them accountable.

“If airlines knew there would be severe punishment, that would change behavior,” William McGee, Senior Fellow for Aviation & Travel at the American Economic Liberties Project told The Post. “If you’re the CEO of a big airline, you’re not afraid of the DOT at this point.”

The big problem: Airlines owe customers $10 billion in refunds for cancellations over the past three years — and they’ve forked over only a tiny fraction of that. In 2020 alone, for example, United received 10,229 consumer refund complaints. That’s despite the fact that under US law, airlines are required to provide customers a full refund for any canceled flights.

“If Buttigieg had been willing to fine the big airlines, you would’ve seen greater investment in customer service. (Southwest Airlines) would’ve held off on a stock dividend,” Jeff Hauser, CEO and founder of the Revolving Door Project told The Post. “Pete could’ve influenced the math airlines did around giving a dividend versus investing in service.”

In a statement, a spokesperson for the US Department of Transportation defended the agency’s record under Buttigieg.

“DOT is taking unprecedented action to protect the traveling public and hold airlines accountable when they don’t deliver,” the spokerperson told The Post. “And since 2021, DOT has helped get hundreds of thousands of people more than $1 billion back in refunds. Additionally, before Secretary Buttigieg took office none of the 10 largest airlines in the U.S. guaranteed meals or hotels when the airline was the cause of a cancellation or significant delay – now 9 of the airlines guarantee that.”

To understand why Buttigieg hasn’t clamped down harder, take a look at his daily schedule, critics say. During the first seven months of his tenure, Buttigieg met separately with executives from Southwest, United, JetBlue, Spirit Airlines, Alaska, Hawaiian, United, and Delta, according to government records obtained by The Post.

Buttigieg has also met repeatedly with industry trade group Airlines For America — which represents Alaska Airlines, American Airlines, Delta, Hawaiian Airlines, jetBlue, Southwest, and United. Consumer advocacy groups, meawhile, only managed to nab one meeting, McGee told The Post.

“I don’t know what goes on behind closed doors but Buttigieg clearly hears the airlines’ perspective far more often than he hears from consumer advocates,” McGee adds.

Another notable airline that hasn’t met with Buttigieg is Frontier, which spent just 1/17th of what Southwest Airlines spent on lobbying in 2022. Frontier, which received 4,329 complaints in 2020 — less than half of what was amassed by United, for example — was slapped with $224 millions in fines versus zero for United. The agency also went after TAP Portugal, Air India, Aeromexico, El Al, Avianca — charging these international carriers roughly $350 million total.

“This latest round of enforcement… leaves out the most egregious US offenders,” McGee said. “Frontier’s decision to withhold valid refunds deserves punishment. But so too does the ongoing abuse of passengers by American, Delta, and United, whose market share dwarfs Frontier’s.”

Southwest, Delta, American and United declined to comment. Frontier didn’t return calls requesting comment.

Last summer, 38 attorneys general sent a letter to Congress alleging Buttigieg “failed to respond” to thousands of complaints, was “unable or unwilling” to hold airlines accountable, and left a “vacuum of oversight” letting “airlines to mistreat consumers and leaves consumers without effective redress.”

Nevertheless, insiders told The Post that lobbyists and airline executives with a presence in D.C. are constantly making the case for their airline — and creating sympathy with staffers and politicians alike, including Buttigieg.

“Pete is susceptible to well-dressed people… they touch his McKinsey heart,” Hauser said, referring to the well-connected consulting firm where Buttigieg worked before mounting a career in politics. “Buttigieg has done nothing to upset the system because he’s heavily corporate and he’s sympathetic to them.”

As of 2023, Delta has 44 lobbyists which cost the company $3.69 million in 2022. The Atlanta-based carrier’s PAC spent nearly $1.1 million in the 2022 midterms — donating mainly to Congress members on the House Transportation and Infrastructure Committee that oversee the agency like Rick Larsen (D-Wash.) and Sam Graves (R-Mo.).

As of 2023, United has 27 lobbyists, spent $2.58 million lobbying in 2022 alone and its PAC spent $315,000 on the midterms. As of 2023, American Airlines had 39 lobbyists and spent $3.75 million on lobbying in the midterm.

“These airlines have the institutional knowledge to operate in D.C…. the lobbyists know the DOT and know it’s one giant club,” Hauser said. “You make yourself a pariah if you don’t engage.”

It’s not just about cash but also connections. Southwest’s ex-CEO Greg Kelly worked on the Obama Administration’s advisory board, board member J. Veronica Biggins served in the Clinton White House and board member Thomas Gilligan cut his mouth working at the Council of Economic Advisers.

“It’s less about campaign cash,” says Hauser. “It’s more if you’re a company that hires the right people.. and gives your CEO the right talking points to smooth things over you can get out of the principal’s office without being punished.”