Wednesday, March 10, 2010

Continental: Faced With Fines for Tarmac Strandings, We Will Cancel Flights

Photo: Continental CEO Jeff Smisek

As reported here last week, the number of flights canceled by domestic airlines during bad weather last month was 38,000, according to

As those cancellations were going down at airports in the Northeast, I remarked several times that most of them looked to be preemptive -- that is, airlines were whacking literally thousands of flights in the New York and Washington areas and in Philly before the various snowstorms actually arrived.

I said then that it appeared that airlines were throwing a kind of tantrum, scrubbing all of those flights in advance to make a political point in opposition to the move by the Transportation Department to impose draconian fines ($27,500 a passenger, which would in fact impress Dracula) on airlines that had planes stuck idled on tarmacs for three hours or more.

People in the industry told me that wasn't so, especially since the fines and sanctions provide an exception for bad weather. No, they said, that extraordinary glut of cancellations was caused by prudent crisis planning. Airline operations are stretched as thin as they ever have been, and it made sense from the corporate perspective to keep planes and crews in place as bad weather approached, rather than giving it the old college try and operating as best as possible in horrible weather, with planes and crews strung out all through the system.

Okay, I bought that explanation -- and I still do. On the other hand, as I have also noted here recently, 38,000 canceled flights meant 38,000 planeloads of people who had to scramble to re-book their trips in a system that has no slack even on normal days.

Anyone who's traveled in the last three weeks knows what this wrought as travelers lined up three- and four-deep at ticket counters trying to make alternate arrangements. The air-travel-system python is still digesting that bulk.

But now comes Jeff Smisek, the CEO of Continental Airlines, publicly stating that airlines will in fact cancel flights expressly to thwart the DOT penalties. Smisek, who's a lot more blunt than the amiable Larry Kellner, whom he replaced as CEO when Kellner retired in January, spoke at an investor's conference in New York yesterday.

Among his statements: "...having a rule that requires us to cancel flights at three hours or suffer a fine of $27,500 per passenger is inane. And so what we do in the face of a fine like that is we’re going to cancel a lot of flights. ... the government, by God, says, 'We're going to fine you $27,500.' Here's what we're going to do: We're going to cancel the flight."

After the DOT plan to fine airlines for tarmac strandings was announced in December, the Air Transport Association, the airlines' trade group, also warned that extra cancellations could ensue.

"We will comply with the new rule even though we believe it will lead to unintended consequences - more cancelled flights and greater passenger inconvenience. In particular, the requirement of having planes return to the gates within a three hour window or face significant fines is inconsistent with our goal of completing as many flights as possible. Lengthy tarmac delays benefit no one," said the trade group's president, James C. May.

Well, that's where we stand. And remember, the snows of yesterday may melt, but summer thunderstorm season lies ahead.

Granted, the air-traffic control infrastructure is an obsolete mess, and ongoing mega-billion spending to fix it with an impossibly delayed so-called NextGen rehab is a questionable initiative at best, and possibly a stunningly expensive boondoggle at worst.

But Smisek also made another noteworthy assertion, suggesting he seems to believe that the airline industry is a free market that operates without government help. Given the staggering sums of money spent by federal, state and local governments on airports, air-traffic control, aviation infrastructure and safety and other massive subsidies to the commercial airline industry, I was impressed by this statement from Mr. Smisek:

"The day that I rely on government to help this industry you should make sure that I get fired."

Say what?

Meanwhile, airlines are trying other ways to head off the potential DOT penalties for keeping passengers stuck on planes idled on tarmacs for three hours and more. No need to repeat the horror stories, or to note again that excessive tarmac delays are statistically minimal. When they happen, they're news.

Kate Hanni, the much-maligned grassroots founder of the movement that has pushed for so-called passengers rights in the matter of tarmac strandings (and whose activity was one of the impulses prompting the DOT to issue the tarmac-delay fine rule), has now taken on the attempt by several airlines to get temporary exemptions from the DOT rule at Kennedy airport, where a major runway is under construction and delays are expected to increase in the summer.

"Rather than forcing consumers to change their plans by imposing multi-hour delays on them due to some construction at JFK, the commercial airlines should change their operations and scheduling to adjust to temporarily lessened airport capacity," said Hanni. [My question: Does she mean they should cancel flights?]

She added, "The fact that the airlines are already working actively to find loopholes and excuses to avoid compliance with new consumer protections before the regulations even go into effect demonstrates their continued hostility to consumers and new laws and policies designed to protect them. Thee fact that these airlines are focusing their energy and resources on manipulating the regulatory process to avoid the new requirements rather than abide by them should motivate Congress to make the 3 Hour Rule permanent with the full force of law."

"Granting the airlines request for an exemption at JFK due to construction would create a precedent for waiving consumer protections at any airport" where an airline can point to construction of any other factor that might affect ontime departures, she said.

Anyway, summer is coming. Air travel is picking up. Passengers are furious and airlines -- if Jeff Smisek is any indication -- are pushing back.

We're in for another bumpy ride.


1 comment:

ChefNick said...

Well, uh . . . maybe if we just reduced the fine to, say, the cost of a Happy Meal and a pillow/blanket combo per passenger, the airlines might just decided that pushing back might be worth it.

$27,000 is just simply out of control. What airline anywhere would even think of taking that chance?