Airlines have an accountability problem

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Southwest Airlines was just ordered to pay a huge fine over last year’s holiday disruption. This penalty represents a step toward accountability, but it addresses only a slice of the broader problems facing the industry.

First, here are three new stories from Atlantic Ocean:


A step towards accountability

The queues at the airport were disastrous. Travelers with haunted looks behind their eyes stretched over jackets and backpacks. During one of the busiest travel weeks of the year, Southwest Airlines was a mess.

If you’re lucky enough not to be affected by the chaos, here’s a reminder of what happened: Around this week last year, order in the Southwest collapsed under the weight of overwhelming chaos. Triple hit Due to bad weather, outdated scheduling system and communications failure. Nearly 17,000 flights were cancelled, and two million people’s flights were grounded, disrupting Christmas plans for families across the country. For many Americans experiencing these delays or hearing the news, the feeling was, naturally. The cursed Christmas week in the Southwest came at the low point of an already chaotic year for travel, marked by soaring consumer demand and labor shortages that meant flights were often canceled and delayed.

Southwest was hit hard by its failure: the company lost about $1 billion. Its shares fell. Its CEO went on an apology tour. Now the Department of Transportation has imposed its largest consumer protection violation fine ever — $140 million, nearly 30 times higher than the previous record — on the company. Pete Buttigieg, the Transportation Secretary, issued a warning in his letter statement Regarding the fine, he said that it “sets a new precedent and sends a clear message: If airlines fail their passengers, we will use the fullest extent of our authority to hold them accountable.”

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The fine is a step towards accountability. But the industry’s problems, including massive consolidation, remain. “I’d be a little surprised then [the fine] “They had no sort of seismic recording” for airline executives, Kathleen Bangs, a spokeswoman for the flight-tracking company FlightAware, told me. Southwest won’t actually need to cut a $140 million check to the government: The company will pay $35 million to the Treasury over the next three years; The rest will be paid to customers as vouchers for future canceled and delayed flights or credited to Southwest for compensation the company already paid to travelers last year. The Department of Transport thought it was important, an official from the department told me, to impose a monetary fine on the airline to reflect the seriousness of the problem but also to ensure that future consumers would get relief as well.

More than this year’s fine, Bangs added, it was last year’s fiasco that had airline executives shaking in their boots, because it came after a series of smaller crises. She explained that every airline CEO, far from hoping that his company won’t be in trouble, has a vested interest in the industry’s reputation. (In a statement, Southwest said it “shares the Department of Transportation’s goal of providing the highest level of service to the traveling public, and is grateful that a consumer-friendly settlement has been reached,” adding that it has thus far experienced few operational issues on flights on larger travel days.) this year.)

Although Southwest has been an anomaly in the massive scale of its decline, it is not the only carrier to have recently failed to serve consumers. While airlines have Uniform Tremendously in recent decades, shareholders have benefited. But consumers? not always. As written by Ganesh Sitharaman Atlantic Ocean This year, airlines’ points systems mean they now act as banks – they are “like financial institutions flying planes on the side of the road”.

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Airlines have changed radically in the past few decades. Until the 1970s, they were regulated like public utilities. The government had a say in determining where planes flew and airline fees. After Congress moved to deregulate the industry in 1978, the companies competed fiercely for a time, then united. Now the “Big Four” carriers, including Southwest, have become huge corporations that control about 80% of the industry; They all received taxpayer-funded bailouts.

Airlines, referring to their days as public utilities, have argued that the industry is too important to the nation to fail. After receiving a bailout worth $50 billion in grants during the early days of the coronavirus pandemic, airlines’ practice of buying back stock while failing to save enough has exacerbated the problem. Subject to audit. In a consolidated environment, airlines have little incentive to make travel fun and convenient for passengers, Bill McGee, a senior fellow on aviation and travel at the American Economic Liberties Project, an antitrust nonprofit, told me. “Airlines misbehave because they can.”

Related:


today’s news

  1. The Colorado Supreme Court ruled so Donald Trump is not qualified From holding the office of the presidency under the Fourteenth Amendment and must be removed as a candidate from the primary presidential ballot in the state.
  2. The United States and its allies have done this Created a naval alliance In response to escalating attacks on commercial ships by Yemen’s Houthi rebels in the Red Sea, a major trade route.
  3. earthquake More than 120 people were killed Hundreds of others were infected in China’s Gansu and Qinghai provinces. Rescue teams are facing sub-zero temperatures as they try to locate survivors of the country’s deadliest earthquake in nearly a decade.
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Missionaries

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Evening reading

Stella Blackmon

Big Cousin blinked

Written by Faith Hill

You may have heard: Americans are having fewer children, on average, than they used to, and that’s worrying some people. In the future, older people may outnumber younger people, leaving not enough workers to pay taxes and fill jobs. Children actually have fewer siblings to grow up with, and parents have fewer children to care for as they get older.

Oh, and people also have fewer cousins. But who’s talking about that?

Within many families – and I’m sorry to say this – cousins ​​occupy a strange place. Some people are very close to their people, but others consider them strangers. Some cousins ​​live in the same building. Some live on opposite sides of the world. All of this can be true about any family relationship, but when it comes to this one, the spectrum extends especially far.

Read the full article.

more than Atlantic Ocean


Culture break

Image from the new Wonka movie starring Timothée Chalamet
Jaap Biotendijk/Warner Brothers

He watches. the witch Wonka (in theaters now) Wisely understands that Roald Dahl’s characters don’t need much backstory, writes David Sims.

is reading. Forgettinga novel by Ukrainian writer Tanya Malgarchuk, details how memories of brutal pasts change bodies as well as psyches.

Play our daily crossword.


Catherine Ho contributed to this newsletter.

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