Last week, President Biden announced a long overdue rule, finally requiring airlines to provide automatic refunds when they cancel or significantly delay your flight. This was touted as an enormous victory for consumers who have long been abused by the big airline companies. But unfortunately, that wasn't the end of the story. As the lever first reported, airline lobbyists frantically went to work to try to kill the rule, before it can even be enforced. They convinced a handful of lawmakers from both parties to slip language into an aviation bill that could kill this new rule. That bill is now moving to the floor of both houses of Congress. On this episode of lever time, we look at why American air travelers still don't have the most basic consumer protections. And we expose the lawmakers who took lots of airline industry campaign cash and are now trying to kill a rule to protect you from airline abuse.
In 2022, America experienced a holiday season airline meltdown with Southwest canceling hundreds of flights. At the time, the level reported the Transportation Secretary Pete Buttigieg had ignored warnings from state attorneys general about the airline system, instead of taking action against airlines Buttigieg went on late night TV to insist that everything would be fine.
I think it's gonna get better by the holidays. We're really pressing the airlines to deliver better service so many people have been delayed been canceled happen to me several times this summer. And the fact is they need to be ready to service the tickets
Buttigieg became something of a national embarrassment, as he tried to pretend he had no power to punish airlines that mistreat their customers. But thanks to sustained pressure Buttigieg has changed his tune. And last week Buda judges Department of Transportation announced a new rule requiring airlines to provide automatic refunds when they cancel or significantly delayed flights. President Biden touted the rule
when you're raised and you're coming from a middle class family, all this stuff matters to you. It matters. So those little items that they say, well, it's only cost this only costs that it matters. And so,
this was hailed as a huge win for consumers, which is why airline lobbyists started trying to seize the defeat from the jaws of victory. Within days the levers Katya Swank, and Freddy Brewster reported that airline lobbyists had convinced two Republican and two Democratic lawmakers to insert a provision into an aviation bill that could kill off the new rule before it goes into effect. From their discussion, you'll learn exactly which lawmakers in Congress are doing this, how much airline industry money they took, and how a small line of legislative text can quietly kill off a consumer protection rule. That was years in the making. They'll also update you on the state of play, and whether Congress will do anything to stop airline lobbyists from once again getting their way. And you'll learn what this all means for you. The next time your flight is delayed or canceled.
All right, so let's talk about what you reported this week. The airline industry is notorious, in my opinion, for never giving people refunds or trying to help them when they are clearly at fault. The Biden administration tried to change that. But I want to go back to before that rule was put in place. What kinds of protections exist or perhaps don't exist for airline passengers right now, without this rule? Are passengers required to be given a refund when airlines delay or cancel their flights?
Yeah, it's so this is something that the Department of Transportation has been fighting the airlines on for quite a long time. So the answer to that question is not so simple. But in general, yeah, it has been long standing policy, that the airlines are required to give a refund in cases of cancellations of you know, really significant delays. That's what the Transportation Department has had for a long time. The problem has really been that airlines have found a lot of loopholes. In this policy. It hasn't always been clear, you know, what flights are eligible, what the timeline is for a refund, you know, when passengers really are owed one. And this really came to ahead a few during the pandemic, you know, in 2020, and 2021, where we saw these massive requests from passengers for refunds, people whose flights were canceled and They didn't want another flight was the pandemic. They didn't want a voucher, they wanted their money back. And airlines were really dragging their feet about providing these refunds. And since then the Transportation Department under the Biden administration has taken a closer look at the issue. And that's sort of where this new policy that was announced last week comes in.
So Transportation Secretary Pete Buda judge advances this new rule, where it sounds like they're gonna guarantee refunds and automatic refunds. The interesting thing to me is that part that it's automatic, so you don't necessarily have to go through this Byzantine, archaic feeling airline system, you don't have to wait on the phone for a long time. But am I reading that correctly? Under the D O. T rule, it would be automatic. So
the important context here is that transportation officials have tried to guarantee refunds for a long time. And that's why the automatic piece in this rule that you mentioned, is so critical. You know, because the issue has has been more that the airlines put the onus on consumers, when they are asking for the refunds rather than, you know, consumers aren't under law or under regulation or refund at all. And so yes, as this new rule, which was announced last week, would require airlines to provide consumers and automatic cash refund, if their flight is canceled or delayed significantly, and they would have to do so within seven days of you know, unless the consumer, the passenger, you know, accepts a voucher or accepts, you know, a rebooking. And, you know, that is huge, you know, it's really this automatic piece here, that is what's so important, because, you know, in the past, consumers may have been owed a refund, technically, but it's been really difficult to get them. And you know, this new rule, it does other things as well, it takes on sort of airline junk fees, you know, fees that are on what consumers unwittingly pay for seat assignments that they don't need, things like that it sort of clarifies when consumers are owed a refund, you know, what flights are eligible. But, you know, again, the real critical piece here is that airlines provide the refunds automatically, it's a way to keep the airlines from getting around getting, you know, from using loopholes, so that they don't have to provide refunds to passengers,
you know, I had to fly a lot for work during that period you were talking about after the pandemic, when airlines were really, really struggling to catch up with all of the traffic that was coming their way. And I spent a lot of time talking to airlines trying to get money back or, you know, trying to avoid paying these fees because of things that I felt were on the airlines part, not on my spot. So I can't imagine airlines are too thrilled about Buddha judges new rule. Was there any lobbying against this? Did they outright oppose it?
Yeah, you're right on that, for sure. You know, the response from the airline industry after the rule was announced was immediate, you know, major trade groups for airlines, like Airlines for America have announced their opposition to the rule. You know, they've said that the rule might pass on costs to passengers, sort of using the age old airline industry, talking points to oppose it. But it is also still early days. And so you know, we don't fully understand yet what sort of the scope of their opposition is going to look like. But you know, if you talk to anyone who has worked in this space for a long time, who has tried to get these kinds of passenger protections in place before, they will say that whenever the Transportation Department tries to use its authority to regulate the airlines, to make them dim passengers refunds to treat passengers? Well, they are often challenged, or the airlines launch legal challenges in court to try to, you know, get these rules off the books. And so that is likely what we're going to see hear, you know, in the coming weeks and months,
yeah, and I mean, it sounds like a great rule. I know that there was a lot of celebratory praise for it, especially from airline consumer advocates. But I feel like it would not be a lever production if we didn't have a yes, but and you reported on a yes, but coming from Congress this time, that might impact this rule. What exactly did you report on what did you find out and what is it have to do with this big FAA bill that's going through Congress right now. Right.
So, you know, just days off? Sure. The Transportation Department announced this rule, which as you said, you know, it was met with much celebration, you know, many relieves passengers, including me knowing that, oh, you know, maybe we will be able to get our refunds automatically. You know, I think most people understand that'd be a big shift. But, you know, just days after that, we got this deal called the, you know, the FAA Reauthorization Act. This is a big piece of legislation, like literally hundreds of pages long. And it is, you know, every five years, lawmakers have to pass it to, you know, provide new funding for the Federal Aviation Administration, essentially, it's this big must pass legislation that really sets airline policy for the coming years. So it's a really important piece, there's a really important bill, and tucks, you know, hundreds of pages in this bill was a provision about refunds. And what was so curious about this provision, when we looked at it was, it appeared to really directly sort of explicitly conflict with this new rule about automatic refunds? It says, Yes, you know, consumers should get a refund, if their fight is canceled if their flight is, you know, significantly delayed, it lays out some sort of guidelines around this, but they are guaranteed a refund, if they send the airline written, or electronic notice essentially saying, right, you have to ask the airline for the refund, which, again, is the whole point of this new rule or, you know, in a critical part of this new rule, was the fact that it was the airlines automatically providing this refund. So, you know, we're still I think people are still trying to understand how this provision got in the bill, what the implications are. But it you know, it seems like this could present a significant challenge to the Department of Transportation's new automatic refund policy.
Yeah, and I think I speak for many people, when I say that, it's not so much that getting a refund is the problem, it is dealing with the airline's their archaic way of getting in touch with people the amount of time you have to spend. So that's something that could really undercut what this rule is supposed to be doing. Who put this in this bill? And
why? That is the question. Yeah. So you know, the lawmakers leading and negotiations here, were some of the chairs of the, you know, House Transportation committees, these are people who, you know, have good relationships with the airlines. They have been, you know, leading this kind of they're very have a lot of control over aviation policy. You know, we don't know fully what took place, you know, in on the negotiating at the bargaining table, right. We don't know who wrote this particular provision. But we know that the, you know, bipartisan lawmakers that finalized the deal that have agreed to it that have touted it, as you know, including new consumer protections. They are at least the faces of this, of this, you know, this potential setback. And of course, it's very much worth noting that, you know, the airlines every time there is this big reauthorization, FAA funding package, they spend millions lobbying on it some key focus of their lobbying efforts in Washington. So we know that the airlines hands are all over this bill. We just don't know exactly what, what they might be responsible for.
And are there any, like who are the most prominent and people that are associated with this bill? Because I know usually bills that go through Congress have co sponsors and people who have kind of, they get the credit for the bill going through? Do we know who that is? In this case?
Yeah. So you know, we the the lead negotiators here who sort of guided this through Congress, who are in charge of it. Were maria cantwell. The
work we've done in this legislation is so important because it's helping commercial aviation remain the safest and most secure in the world and to improve the traveling public's experience,
a Democrat from Washington as well as Rick Larsen, also a Democrat from Washington, and
the upcoming FAA reauthorization, this committee has examined all aspects of past experience from ensuring consumers are fully protected against flight disruptions to improving the transparency of fees and
other airline policies. Of course I've been important state for the airline industry. Yeah, home of Boeing. Exactly. Exactly. Both you know, have our hold important roles in the in house subcommittees and Senate subcommittees that determine airline policy. There are also two Republicans with their names on the bill, Senator Ted Cruz, and Sam graves of Texas and Missouri, also two important airline industry states. So, you know, again, a bipartisan group of lawmakers is responsible for the negotiations here. And
you had mentioned that they come from states where the airline industry is very present. Do they also receive campaign contributions from the airline industry? Do we have a sense of that?
Yes, these four people are some of the biggest recipients of airline industry campaign cash. You know, Maria Cantwell is the industry's top donor, in terms of, you know, individuals in the airline industry, donating to lawmakers. So, you know, I think that's important and understanding their position, their interests and who they are answering to.
So the top donor of airline industry, cash was one of the lead sponsors of this bill. The others are also major recipients of this bill. This provision could reverse or undercut more accurately, something that Buddha judge had tried to undo with executive action. Did Buda judge ever asked them to put the refund rule into the bill? Was there any communication between the Biden administration and Congress to make sure that something like this didn't take place? All right,
the timeline here, I think is really important. So you know, of course, it was only a few days before the final deal was announced that the Transportation Department announced their final rule. I know, after eight months of negotiations, but you know, we found that in a letter in January, you know, months before the final deal. And, you know, weeks before we first saw this provision and sort of an earlier draft of the legislation in January, you know, Buddha, Judge Transportation, the Department of Transportation, you know, provided some of their opinions to lawmakers, specifically, these four lawmakers, these four recipients of airline industry cash that we were just talking about. In a letter, the Transportation Department wrote to them saying, you know, these are our positions on various policies, these are recommendations of some policies we'd like to see in the FAA. final deal. And one of those policies that they specifically mentioned, was a policy for automatic refunds for flight cancellations. And instead, what we got is something again, that seems like an explicit rejection of that request. No, consumers have to request refunds themselves.
Wow. And that letter was specifically addressed to like Senator Cantwell, for example, like there isn't any way that this letter was intended for a different group of people. And then all of a sudden, this is getting kicked up. Now. This is pretty directly from Buttigieg. Right to the same group of people that receives a lot of money from the airline industry, and wrote this provision into the bill is that the correct read is
yet directly addressed to Kent law crews, graves and Larson. So unless they're not reading their mail, we can assume that they were aware of the transportation department's request.
And so the bill comes out of Senator Campbell's committee. She's the chair of that committee. What did she said about the provision conflicting with the rule from I mean, ostensibly, the leader of her own party?
Yeah, can't was office has refused to comment us on the rule. So, you know, we don't know where she stands. We don't know what her defense is, at this point. You know, we have had some, you know, Buddha judge, for instance, come out and say, Hey, we don't think this necessarily will conflict, we're gonna stand by our rule as written. But in terms of the lawmakers to push this through, you know, they have not given us a rationale for why they did. So what's
the state of play right now? Is there any way that this could still potentially make it out of the bill before final passage? And are there any lawmakers either in the House or the Senate who seem to have the appetite to remove that? Yeah,
the bill isn't law yet. So you know, there is some wiggle room here. I think. The you know, the bill is a final deal, which means it has bipartisan support. And usually when a bill is at this stage, like, especially such important, like mass pass legislation like this, you're not going to see significant changes, but it's still will have to come up for a vote in both chambers of Congress. So, you know, I've spoken to consumer protection advocates who say, you know, we're hopeful that someone might introduce a floor amendment and, you know, change this bill, you know, challenge the language that's in there. But we have yet to see, you know, we don't know yet if that will happen, and it does seem likely that the bill is going to be passed in a pretty similar For that, as it is right now, now, this
is maybe a little too wonky of a question. But thinking just as a consumer, if there is this Department of Transportation rule in place and say the bill does pass with this provision in place, if you're the airline industry, which one do you have to listen to? Because if the DoD is still issuing this rule, does that supersede what this legislation might say? How does that kind of work out? Has anyone explained that to you?
Yeah, no, as as like, abstract as that question, seems that actually is a really important question here. You know, if we have this bill passed into law, and we have this rule, which the Department of Transportation seems like it's still standing behind, who wins out? Right. And, you know, that's a question that will be determined in court. We've heard from, you know, airline industry groups that are going to, you know, already say, you know, we think this bill is law, it carries more weight than this rule, it supersedes the rule. That's their argument, they're gonna say that, you know, any law passed by Congress is, has greater weight than any rule. But I've talked to some others, people who have a different opinion saying, you know, the transportation department has authority granted to it by convert Congress to regulate these industries. And it was using that authority to make this rule before Congress had said anything about allowing it to, you know, require refunds for flights. So I think, you know, I think there are arguments to be made on both sides. But I think there's a reason that, you know, people like Elizabeth Warren, and you know, prominent sort of prominent other prominent lawmakers and advocates have spoken out about this bill is because I think people to recognize that it will have significant impact. Even if the rule wins out. Ultimately, it's this bill, give the airline industry really, you know, a tool to use to challenge the role. And you know, that's always a serious concern.
So it's kind of like trying to get a refund from an airline. It's confusing and still Byzantine, but there might be a possibility that it could work out at the end of the day.
I think that is exactly right. Yeah.
Thanks for listening to another episode of lever time. Lever time is a production of the lever. This episode was produced and engineered by me Arjun Singh with editing support from David Sirota, Lucy Dean Stockton and Joel Warner. Our theme music is composed by Nick Campbell. We'll be back later this week with more episodes of leisure time.
