How Airlines Fly Away from Accountability
States are prevented from doing anything about scofflaw air carriers.
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United Airlines is in some hot water for a series of safety mishaps that, while not injuring anyone, are exactly the sort of things flying nightmares are made of: fires, wheels falling off, chunks of plane literally missing in action. This has, naturally, caught the eye of both the Federal Aviation Administration and lawmakers.
Case in point, Texas Republican Congressman Dan Crenshaw had this to say last week:
CEO Scott [Kirby]’s bad management, poor safety precautions, and unapologetic mistreatment of passengers is tanking United Airlines. I wish I had another option to fly to and from Washington, DC, but UA has a monopoly in Houston. That needs to change.
This week I asked Transportation Sec Buttigieg to investigate UA’s recent safety failures that put lives at risk. Soon, I will be filing legislation to recoup bailout funds from large airlines like United and redirect those funds to airport infrastructure.
I will also be introducing legislation to create new passenger protections, including consumer safeguards for pets and service animals. Additionally, we are looking into granting Federal Trade Commission and State Attorney General oversight authorities to investigate passenger complaints.
I encourage my colleagues to join me and co-sponsor this bill that will start prioritizing customers.
I put those two particular lines in bold above because they are especially relevant to the issues I write about here, and explain something that generally flies (ha!) under the radar when it comes to issues around corporate power and community access to national transportation networks: States officials, be they legislators, governors, or most importantly, attorneys general, are prevented from doing anything whatsoever to address airline misbehavior.
Why? Well, more than 40 years ago, Congress made hash of state consumer protection rules regarding airlines.
In 1978, Congress passed and then-President Jimmy Carter signed into law the Airline Deregulation Act, which was part of a deregulatory zeal that grabbed national lawmakers in the 70s and 80s, and led to the deregulation of vast swathes of the economy, from trucking to railroads to telecoms to, perhaps most famously, banking and finance.
A provision in that law wiped away the ability of anyone in state government to make rules or do any enforcement “related to a price, route, or service of an air carrier.” This is a concept known as preemption, as in the federal government preempts, or blocks, state or local actors from taking a particular action.
The idea behind airline preemption was that Congress didn’t want any states getting in the way of deregulation by making their own rules to replace what was wiped away at the federal level. Since then, the Supreme Court has upheld an “expansive” version of the preempting of state powers over airlines several times, as the Congressional Research Service explained last year. Instead, only the Department of Transportation can regulate airline consumer issues.
Not that states haven’t tried, mind you. New York in 2008 had a comprehensive airline passenger bill of rights mooted on preemption grounds, and last year a judge ruled that a Massachusetts law requiring paid sick leave for workers didn’t apply to anyone even somewhat connected to an airline.
But this preemption doesn’t only block new laws from coming on the books; it prevents state attorneys general from enforcing any existing consumer protections when it comes to airlines, be they state or federal. (State AGs can often enforce federal laws on behalf of their constituents.) So on anything from junk fees to seat size to how long passengers can be forced to sit on the tarmac when a flight is delayed, states are pretty much powerless.
As a bipartisan group of state AGs wrote in 2022, “state attorneys general have little to no authority to hold airline companies accountable for unacceptable behavior towards consumers. This vacuum of oversight allows airlines to mistreat consumers and leaves consumers without effective redress.” Colorado Attorney General Phil Weiser noted that in 2020, the most complained about corporation in his state was Frontier Airlines, but he could literally do nothing about it other than turn around and complain to DoT.
But the issues regarding airlines go much deeper than preemption, as problematic as it is. Indeed, another rationale behind federal preemption of state airline regulations is that federal and state antitrust enforcers would block the sort of consolidation that would lead to consumer abuses, so states wouldn’t need to enforce consumer protection rules due to rigorous airline competition.
Spoiler alert: That didn’t happen.
Indeed, as Rep. Crenshaw noted, due to rampant consolidation many airlines have near-monopolies in particular cities, and certainly have monopolies on certain routes, giving them carte blanche to nickel and dime customers with little to no consequence, since customers have few to no options for switching to a different airline. United, to his point, controls three of the five terminals in Houston and about two-thirds of the total gates.
Unchecked consolidation has decreased the number of airlines from the dozens that existed a few decades ago to the handful we have today. Delta, for example, is the result of the consolidation of 16 different airlines. And the major airlines all have common owners, as well, further disincentivizing robust competition and making at least soft collusion easier.
That consolidation has also prompted large swathes of the country to literally become flyover country, as the jibe goes. Major airlines have abandoned dozens of small and mid-size cities in recent years, focusing their operations on the mega-hubs where they dominate.
Fortunately, the tide has turned at least a bit on the consolidation front: The Department of Justice and a coalition of state attorneys general recently blocked an attempt by Spirit Airlines and JetBlue to merge, which would have allowed JetBlue to raise prices, eliminate routes, and likely cut jobs.
But that doesn’t put the genie back in the bottle regarding the consolidation that’s already happened. So one way to address the current imbalance between fliers and the airlines is to allow state legislators and enforcers to create and enforce consumer protection laws. Congress could simply repeal the portion of the Airline Deregulation Act that provides for federal preemption, as my colleagues called for here.
Transportation is one of those areas in which we have a national interest in fostering access and accountability to the whole country, not just low prices for those who want to fly from one big city to another big city. The current system doesn’t allow those goals to be achieved, and so something’s got to change.
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— Pat Garofalo