Sec. Pete Buttigieg held a press briefing on Wednesday where he announced new airline consumer protections.
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NewsTranscript
00:00First of all, thanks very much to Bill McGee from the American Economic Liberties Project,
00:08someone who dedicated so much of his professional life to aviation, first as a public servant
00:14and then as an advocate.
00:15And I want to note that this is really the culmination not just of work by our USDOT
00:22team, but of a community of advocates like Bill who have stood up for the rights of airline
00:29passengers and to make sure airline passengers and workers are better off.
00:33I also just want to thank DCA for hosting us, an airport that I experience often as
00:38a passenger as well as a policymaker.
00:41And I want to recognize our department's OACP, our Office of Aviation Consumer Protection,
00:46which is a small but mighty team that has helped millions of passengers get billions
00:52in refunds, handling complaints, enforcement, regulation, and rulemaking all at the same
00:58time.
00:59And thanks all of you for joining us here.
01:02This is a big day for America's flying public.
01:06It represents the latest step, two steps in fact, in our ongoing journey as the Department
01:11of Transportation under President Biden's leadership to deliver the biggest expansion
01:16of passenger rights in the department's history.
01:20The news comes as we enter the middle years of America's infrastructure decade, a period
01:25which has already seen enormous upheaval and change in the aviation sector.
01:30When we got here just three years ago, the big question around airlines was about whether
01:35they would survive the pandemic.
01:38A year later, the challenge was to ensure they could do a better job meeting unprecedented
01:41growth in demand.
01:42And through it all, we have been focused on making sure that passengers, workers, and
01:47the sector as a whole would be better off than before we got here.
01:51Telling stories good and bad about your flight is an American pastime.
01:56From stories of people coming up to me in airports, to stories that we formally receive
02:01in the form of comments and complaints through our rulemaking processes and enforcement activities,
02:07we have heard it all.
02:09And too often, the things that we hear about aren't just irritating inconveniences.
02:14They are significant harms and, more importantly, violations of passengers' rights.
02:20And we're here to do something about that.
02:23A lot of what we hear from passengers involves refunds, or the lack thereof, for passengers
02:27who experience cancellations and disruptions.
02:31In theory, passengers are already supposed to be refunded for a cancellation or a major
02:37delay.
02:38In practice, it often doesn't work that way.
02:41We hear again and again from passengers who describe how hard they have to push just to
02:46get the refunds that are owed to them.
02:48And often, our consumer protection team has had to impose multimillion-dollar penalties
02:54on airlines just to get them to do what should already be required.
02:59Infrequent flyers are especially vulnerable, since they may not know that we are here for
03:04them and are often not told about their right to a refund, and too often instead offered
03:09compensation in the form of a voucher or miles whose value amounts to pennies on the dollar
03:15of what they're actually owed.
03:17Or they enter the vortex of call centers and chatbots, sometimes giving up before they
03:23get their money back.
03:25We're changing that today.
03:27With the first rule that we're announcing today, the Biden-Harris administration is
03:30now requiring that if an airline cancels or significantly delays your flight, within seven
03:36days they will be required to provide an automatic refund to the credit card that you used to
03:42book it without you having to call or wait on hold or sort through digital paperwork
03:47or haggle with that airline.
03:49Importantly, we are also changing the refund to clarify that it must be in cash by default
03:57unless a passenger actively chooses another form of compensation rather than the other
04:02way around.
04:03No more defaulting to vouchers or credits when consumers may not even realize that they
04:09are entitled to cash.
04:11We're also putting another rule on the books, protecting airline passengers from being surprised
04:16by fees.
04:17These charges can really add up for things like a check bag, carry-on bag, change fees,
04:23cancellation fees.
04:24Healthy competition requires that as a consumer you comparison shop, which means knowing the
04:29real price of a trip before and not after you buy.
04:33So airlines will now be required to show you these costs up front so you have all the information
04:38you need to decide what travel option is best for you.
04:42We estimate this will save Americans over a half a billion dollars every year.
04:48From day one of this administration, we have been working to improve the entire experience
04:52for airline passengers, from more transparency when you book your ticket to a better experience
04:57when you get to the airport, thanks to the terminal improvements that we're making through
05:00the Biden infrastructure package, to the most important part of all, which is safety and
05:05peace of mind, secured by better staffing, better technology, better oversight, and better
05:10infrastructure.
05:11And, of course, knowing that if something does go wrong and your flight is canceled,
05:15the U.S. Department of Transportation has your back.
05:18That's why we launched FlightRights.gov to provide passengers with easy-to-interpret
05:24visuals that lay out exactly what each airline is committed to provide to you if they cause
05:28your cancellation or delay.
05:30And we know that that transparency made a difference because within days of my letting
05:35the airlines know that it was coming, we went from zero out of the top ten to all of the
05:40top ten airlines guaranteeing in their customer service plans that they offer things like
05:45free rebooking and meals, and nearly all of them offer free hotel accommodations, commitments
05:50that our department has the power to enforce.
05:52Of course, even with the new rules we're announcing today that airlines will be required
05:57by law to follow, problems still come up, and that's where our stepped-up enforcement
06:01comes in.
06:02When an airline is responsible for a delay or cancellation, we have set records for tough
06:07penalties, including the $140 million enforcement action against Southwest Airlines for the
06:132022 holiday meltdown.
06:15That is nearly double the total amount of penalties that our department assessed in
06:19fines in more than two decades before we got here.
06:23And the level of toughness reflected in the Southwest enforcement is not an exception,
06:27but the new standard for our department's enforcement.
06:30Even more important than the fines that go out to the Treasury is what our department
06:34is getting back into passengers' pockets, which now stands at over $3 billion in refunds
06:39and reimbursements.
06:41And last week, we announced a new force multiplier for our efforts, an unprecedented partnership
06:46with 18 state attorneys general to help investigate aviation consumer complaints and get passengers'
06:52results.
06:53And we're encouraging the rest of the states to join us, too.
06:57Taken collectively, under this administration, USDOT has advanced the largest expansion of
07:02passenger rights, issued the biggest fines against airlines for failing consumers, and
07:07returned more money to passengers in refunds and reimbursements than ever before in the
07:11department's history.
07:13This isn't just about enforcing when something goes wrong, it's making it less likely something
07:17would go wrong in the first place.
07:20When an airline knows that all, instead of just a few, of the passengers on a canceled
07:25flight are likely to actually get their money back, it gives them a different set of reasons
07:30to put in the investment and the realistic scheduling that makes those cancellations
07:34less likely to happen to begin with.
07:37To be clear, we want the airline sector to thrive.
07:41It is why we put so much into helping them survive the pandemic.
07:44And honestly, it's why we're being so rigorous on passenger protection.
07:49This will build confidence in air travel at a time when airlines need to do more to
07:53secure passengers' trust.
07:56And to be clear, whenever it is appropriate, we're also working side by side with airlines
07:59operations personnel on things like deconflicting airspace closures for commercial space launches,
08:05or addressing the congestion in New York's airspace by facilitating larger planes with
08:09more seats that can move more passengers without adding more takeoffs.
08:15This approach of collaborating where appropriate, pushing hard where called for, is working.
08:21After the pandemic, passengers had difficult years, especially in 2021 and 2022.
08:25But last year, cancellations reached a 10-year low.
08:29And this year is off to a good start, about 1.5% cancellation rate, which is well below
08:35the norm.
08:36But we know there is more to do, and we're not done.
08:38We are working on a rulemaking to expand rights to protect the safety and dignity of passengers
08:43who use wheelchairs.
08:44And another one to ban airlines from charging you a junk fee to sit together as a family.
08:50It's all in keeping with President Biden's vision on competition and consumer protection,
08:55including cracking down on junk fees to make everything from concerts to inhalers more
08:59affordable.
09:01These dollars and cents add up for millions of Americans, and our laser focus on making
09:05it easier, more affordable, and more convenient to navigate every system in America, from
09:10health care to banking to air travel, will continue.
09:14With that, we have a little bit of time for questions from reporters.
09:16That process will be led by Alexandra.
09:19Over here, if folks want to start on the side with questions, we'll start with Tom Pacello.
09:26Mr. Secretary, can you spell out how quickly will these new protections take effect?
09:32So the bulk of these protections will kick in in about six months from when the rule
09:36goes into the Federal Register.
09:38We've been working on this for more than a year, but now it's time to take action.
09:42We know it'll take a little time to develop the mechanisms for that money to get back,
09:46but we really don't want the sector to drag its feet, because passengers want and expect
09:50their money back now.
09:54And Mr. Secretary, just two questions real quick.
09:56Number one, thanks so much for coming out today.
09:59To clarify on your response to Tom's question, will this be in effect by the busy summer
10:04travel season, number one, and number two, have you gotten any feedback throughout this
10:08rulemaking process from airline CEOs, and do you have any reaction from them specifically
10:12on today's rules that have been announced?
10:14So unsurprisingly, airlines are not enthusiastic about us holding them to a higher standard.
10:21But I believe that this is in the interest of the airline sector because it builds passengers'
10:27confidence in airlines as a whole.
10:30And I also know that they'll be able to adapt to this.
10:33Remember, when it comes to things like a refund for a cancellation, technically that was supposed
10:38to be the case the whole time.
10:40It's just it wasn't actually happening in practice.
10:42That's part of what this does.
10:43It also clarifies what a significant delay is, because up until now, it's been up to
10:47the airline to decide if a delay was significant enough that you'd get your money back.
10:51Again, in terms of the timing, that's six months from more or less now when it gets
10:55encoded in the Federal Register.
10:57But again, there are a lot of refunds that you're already entitled to and can let us
11:02know if you're not getting.
11:03We'll continue enforcing that, even as we work to make it more automatic so that passengers
11:08go through less trouble.
11:09And frankly, our investigators will have more bandwidth because they don't have to chase
11:13down these refunds.
11:15More and more of them should be happening by default, automatically, as a matter of
11:18course.
11:19Last year, you and President Biden talked about the delay compensation rule, similar
11:25to what the European Union does, requiring airlines to pay money when your flight's significantly
11:31delayed.
11:32It's their fault.
11:33Have you made any decisions about sort of what that level of compensation might look
11:36like, what we might actually see a proposal, and can you talk more broadly about how you
11:40assess the airlines are doing in terms of compensating passengers?
11:43You know, Southwest, as part of your settlement, is now — they are compensating customers
11:49for delays under their control.
11:50They're the only airline to do that.
11:52But maybe you could assess where the industry is as a whole.
11:55Yeah.
11:56So on compensation, we continue to develop that, and to be clear, with this rule on the
12:01books, that does not stop or slow the progress that we're driving in terms of a compensation
12:07rule as well, though this obviously represents something new for passengers who have those
12:12extreme delays.
12:14And then — sorry, the second piece again?
12:17Oh, yeah, OK.
12:19So this is the month when those vouchers as part of the Southwest settlement kick in.
12:26And Southwest will now, because we are making them, really lead the market on that.
12:32And it will be very interesting to see what other airlines respond, not as punishment
12:36but by way of competition.
12:37We haven't yet seen how they're responding.
12:40I think it's going to take a little time to see how the market responds to that.
12:43But it's certainly — in addition to — remember, what we're setting ought to be the floor,
12:47the bare minimum.
12:48And we invite and welcome airlines to compete on that kind of benefit as well as the other
12:54things that airlines compete on.
12:56On the military, you're going to have a dashboard suit on military benefits?
13:00Yes.
13:01What's the status of that and are airlines receptive to that?
13:03Coming soon.
13:04I don't think we have a date for that yet, but coming soon.
13:07Secretary, you mentioned some of the airlines aren't enthusiastic about these rules.
13:12Do you anticipate any efforts formally or legally not to comply?
13:16And are you confident that the rules will hold up in court if that happens?
13:20We are confident of the sound legal basis for this.
13:24We believe it's consistent with the authorities that we have under statute.
13:28I can't speak to what airlines will do, but I certainly hope that they will, if not enthusiastically,
13:36still diligently conform and comply.
13:40And by the way, they don't have to wait the number of months that it will technically
13:46take for this to go into effect.
13:48They could and should be doing this right now.
13:51I really believe this is ultimately going to make the sector better off.
13:55We have seen a lot of industry pushback when we come up with a rule.
14:00We've got two class one freight railroads that immediately sued us for publishing a
14:06rule that most people, I think, assumed was already the case, which is the idea that you
14:11got to have at least a couple of people on board a giant freight train most of the time.
14:16We have seen some pretty shocking responses from some industries to being regulated.
14:21What we've seen so far is, as we have been tougher with airlines, airlines have leaned
14:26into responding to that, sometimes even claimed some credit for the benefits that we're making
14:33them provide consumers, which, as long as the consumers get that benefit, they can say
14:37whatever they like.
14:38What is the accountability process for making sure that airlines stick to this?
14:47Will it be up to passengers, for example, to report violations, or is there a separate
14:52oversight process through the DOT?
14:54So, the primary way for us to find out about a violation is through a complaint process.
15:00That's part of what's available through flightrights.gov.
15:03We have followed up on thousands of complaints.
15:05As I mentioned, the Attorney General's partnership is now helping us keep up with that, and it's
15:09gotten us results.
15:10We've gotten $3 billion and counting back into passengers' pockets.
15:14So, that system works.
15:16I will say, though, by making these refunds automatic, I hope that it creates less need
15:23for that complaint process, which could free up our small but mighty team of consumer protection
15:29professionals to be more proactive.
15:32There is precedent for a process of auditing or spot-checking in addition to complaint-based
15:38enforcement, but that's only available if they have enough bandwidth to do it.
15:42And so, part of what I'm looking for, obviously the real purpose here is to take the burden
15:47off of passengers, but by making this automatic, it may also take some of the burden off investigators
15:52so they can be more proactive.
15:55Mr. Secretary, just a couple quick questions.
15:59First, do you have data on which airlines are the biggest offenders here?
16:03Is this all airlines?
16:05Is this some airlines who are forcing you to do this?
16:08So, it really has varied from airline to airline.
16:11We've collected tens of thousands of stories and experiences.
16:14Part of how I can answer your question is look at the toughest penalties and fines that
16:20we've assessed, and you'll see the biggest violations that we've noted so far.
16:25But, look, up until now, an airline could say that they're not breaking any rule when
16:31they jerk a passenger around.
16:33For example, you have a scenario where you get an extreme delay, like six hours, nine
16:37hours, you're not even going to make it to the meeting or the wedding that you were going
16:41to unless you book a different flight.
16:43That different flight is on a different airline, and it costs more.
16:47And then the original airline on the canceled or delayed flight maybe gives you a voucher.
16:51Up until now, even if we were trying to hold them accountable, they could say, hey, we
16:55gave them a voucher.
16:56We followed the rules.
16:57So, this clarifies that to say, no, you get your money back unless you, the passenger,
17:01wants something different.
17:02So, things like that, I think, speak not just to violations, which we're always trying to
17:07enforce against, but things that airlines claimed were technically not violations, we're
17:13clearing that up here.
17:14Same thing with the transparency on the fees.
17:37Yeah, all of this is informing the FAA's ongoing process with Boeing under a microscope.
17:43You know, I think there was a lot of attention in past years to the design of the aircraft.
17:47Now there is an equal amount of scrutiny on whether they are being manufactured in a way
17:52that conforms to that design.
17:54One thing I would note is that we are now more or less smack in the middle of the 90-day
17:59clock that Administrator Mike Whitaker set Boeing on to deliver a comprehensive plan
18:04on how they are going to do better.
18:06That's going to be a very important part of them being able to prove to the FAA's satisfaction
18:12that it is acceptable for them to increase their production.
18:16We're not going to let them do that until they have satisfied the FAA that they can do it safely.
18:22Any plane that I or you get on today is flying because the FAA has determined that it is,
18:29that there's no barrier to it safely flying.
18:31And anytime there's a concern, anytime that there's a gap in that confidence, that plane doesn't go.
18:38Mr. Secretary, one more follow-up on Boeing, and that is related to the deferred prosecution agreement
18:44it entered into with the DOJ following the MAX 8 crashes overseas.
18:48And now the families of those victims are demanding the DOJ drop that prosecution agreement
18:55and, in fact, that this company should have never been given that kind of leeway.
19:01And I'm wondering your perspective now on the agreement that was reached five,
19:05or less than five years ago, on deferring prosecution,
19:08whether Boeing lived up to its portion of the agreement and whether it's time to prosecute them.
19:13Anything related to the criminal justice process, I have to let DOJ speak to that.
19:18But what I will say is that the families have played an extraordinarily important role
19:22in shaping American policy and, frankly, in shaping my personal perspective on what's at stake in safety,
19:28especially when it comes to Boeing.
19:30On Boeing, the airlines are starting to feel some pain from the fact that Boeing can't get the planes to them they need.
19:39Southwest is cutting flights.
19:41Pilots are being asked at some carriers to take unpaid leave.
19:44Hiring has been frozen.
19:46How do you think the industry is going to be able to handle these lack of planes and travelers,
19:51which is already looking to be a very busy, if not record-setting, summer travel season?
19:57Yeah, this is a real issue.
19:59Multiple airlines have made us aware of how this is affecting their plans.
20:03They've also been creative in how they're adapting their fleets to try to manage it,
20:08given that the deliveries might not come in as expected.
20:11But certainly the administrator's instructions to the FAA, which I concur with,
20:16is to think only about safety.
20:19The commercial and economic concerns are there,
20:22but that's just outside of the realm of the FAA's priority
20:26because all that other stuff is multiplied by zero if we don't have confidence on the safety piece.
20:30I know Pete had one, and then we probably got to go.
20:32Okay.
20:33Two dramatic runway incursions lately here in a JFK.
20:36It was kind of a 2023 problem.
20:38Do you think we've continued this problem into 2024?
20:41And some would say that those were controller errors.
20:44So what does that say about the shortage of controllers
20:47and sort of the need to change their workplace?
20:50Yeah, I don't want to link to things that are still being investigated in terms of cause.
20:54What I will say is that the heightened attention to runway incursions
20:58has propelled, I think, a healthy level of attention on Capitol Hill
21:02and in the country to how we make sure that our controllers are rested enough,
21:07are well-equipped enough with technology,
21:11and that we have enough of a controller workforce to meet this growing need.
21:16It's why our budget for next year includes even more controllers to be hired than we had this year.
21:21It's why we have reversed the decline in controllers.
21:24It's why we're asking for the first time for a mandatory account
21:28that would allow the FAA to plan on technology.
21:31In terms of the numbers of runway incursions, they are rare,
21:34and the numbers we're seeing are consistent with what we've seen in recent years,
21:38but the only truly acceptable number is zero.
21:42And I would point to the JFK incident as an example of just how tightly we watch these things,
21:50that even a plane coming 4,500 feet away from another plane is closer than it should have been,
21:58and we treat that as a close call.
22:01Thank you.