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Southwest Airlines was just hit with a hefty fine for its holiday mishap last year. The penalty is a step toward accountability, but it only solves part of the industry's broader problems.
First, here are three new stories from The Atlantic:
A step towards accountability
The queues at the airport were catastrophic. Travelers stretched out on jackets and backpacks with a haunted look behind their eyes. During one of the busiest travel weeks of the year, Southwest Airlines was in shambles.
If you were lucky enough not to be caught up in the chaos, here's a reminder of what happened: Around this week last year, Southwest's system collapsed under a triple whammy of bad weather, an outdated scheduling system and communications failures . Nearly 17,000 flights were canceled and 2 million people's travels were disrupted, throwing Christmas plans into disarray for families across the country. For many Americans who experienced these delays or heard the news, the feeling was: “Of course.” The cursed week of Christmas in the Southwest marked the nadir of an already chaotic travel year marked by high consumer demand and labor shortages that resulted in Flights were frequently canceled and delayed.
Southwest suffered a lot for its failure: the company lost about $1 billion; its stocks fell; His CEO went on an apology tour. Now the Department of Transportation is levying the company's largest fine ever for consumer protection violations – $140 million, about 30 times higher than the previous record. Pete Buttigieg, the Secretary of Transportation, warned in his statement about the fine, saying it “sets a new precedent and sends a clear message: When airlines fail their passengers, we will use all our powers to detain them.” ” responsible.”
The fine is a step toward accountability. But the industry's problems – including massive consolidation – remain. “I would be a little surprised if [the fine] Kathleen Bangs, a spokeswoman for the flight tracking company FlightAware, told me that there was some kind of seismic registration for airline executives. Southwest doesn't actually have to write 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 out to customers as vouchers for future canceled and delayed flights or credited to Southwest as compensation that the company already paid out to travelers last year. The Department of Transportation felt it was important, a department official told me, to fine the airline to reflect the seriousness of the problem but also to ensure that future consumers would also receive relief.
More than this year's fine, Bangs added, it was last year's fiasco that had airline executives reeling, because it came after a series of smaller crises. In addition to hoping their own company doesn't get into trouble, every airline CEO has a vested interest in the industry's reputation, she explained. (In a statement, Southwest said it “shares the DOT's goal of providing the highest standards of service to the traveling public and is grateful to have reached a consumer-friendly agreement,” adding that there have been few operational agreements with major companies to date There have been problems on travel days this year.)
Although Southwest was an outlier in terms of the extent of its collapse, it is not the only airline that has failed to serve consumers recently. While airlines have consolidated tremendously over the past few decades, shareholders have benefited. But consumers? Not always. As Ganesh Sitaraman wrote in The Atlantic this year, airlines' points systems mean they now act as banks – they are “like financial institutions that fly planes on the side.”
Airlines have changed radically in the last few decades. Until the 1970s, they were regulated like municipal utilities. The government had a say in where planes went and how much airlines charged. After Congress voted to deregulate the industry in 1978, there was fierce competition among companies for a time, then consolidation. Meanwhile, the “big four” airlines, including Southwest, have transformed into giant corporations that control about 80 percent of the industry; They all received taxpayer-funded bailouts.
The airlines, looking back on their time as public utilities, have argued that the industry is simply too important to the country to fail. After receiving a $50 billion bailout at the start of the coronavirus pandemic, airlines' practice of buying back shares while failing to save enough money has come under scrutiny. “In a consolidated environment, airlines have little incentive to make travel pleasant and comfortable for passengers,” Bill McGee, senior fellow for aviation and travel at the American Economic Liberties Project, an anti-monopoly nonprofit, told me. “Airlines behave badly because they can.”
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Evening reading
Stella Blackmon
The big cousin decline
By Faith Hill
You may have heard that Americans, on average, are having fewer children than they used to, and that's worrying some people. In the future, the number of older people may outnumber the young, leaving not enough workers to pay taxes and fill jobs. Children already have fewer siblings to grow up with, and parents have fewer children to care for as they get older.
Oh, and people have fewer cousins, too. But who is talking about it?
In many families – and I'm sorry to say this – cousins occupy a strange place. Some people are very close to them, others see them as strangers. Some cousins live on the same block; some live on opposite sides of the world. This can all apply to any family relationship, but when it comes to this one, the spectrum is particularly wide.
Read the full article.
More from the Atlantic
Culture break
Jaap Buittendijk / Warner Bros
Regard. The Charming Wonka (now in cinemas) is aware that Roald Dahl's characters don't need much backstory, writes David Sims.
Read. “Forgottenness,” a novel by Ukrainian writer Tanja Malyarchuk, details how memories of a brutal past change both the body and the psyche.
Play our daily crossword puzzle.
Katherine Hu contributed to this newsletter.
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