Aviation Industry Updates: Dec 19, 2023

DOT Fines Southwest Up To $140 Million Over 2022 Holiday Meltdown

KEY POINTS:

• Southwest Airlines will be fined $140 million for violating customer protection laws during its 2022 holiday travel operations failure, the U.S. Department of Transportation announced Monday morning.
• It was the highest penalty ever leveraged against an airline for consumer protection violations by a factor of 30, the DOT said, part of a move by the Biden administration to crack down on airlines over unreliable operations, hidden fees and other practices the administration has characterized as anti-consumer.
• The fine includes $35 million to be paid to the federal government as a penalty. The rest of the funds will be used toward creating a compensation system for passengers affected by future flight cancellations or significant delays — three hours or more — caused by something within the airline's control. The DOT said the airline must reserve $90 million to issue passengers transferable vouchers worth at least $75 under that system.
• The airline received a $33 million credit toward the fine for the Rapid Rewards points it issued last year as an apology to affected passengers. The fine was also offset by $72 million to free up funds for the compensation fund, DOT said, both of which "acknowledges Southwest's effort and will encourage other airlines to follow suit to be proactive during operational disruptions."

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Is Delta Stalking American Airlines?

KEY POINTS:

• This week DeltaDAL -2.7% Air Lines announced three encroachments on American AirlinesAAL -1.7% territory. On Monday, it said it would expand at American’s Miami hub. On Tuesday, it confirmed that it will open its first airport club in Charlotte, American’s second largest hub. On Friday, it announced it will expand in Austin, Texas, where American said last month it will slash service.
• Delta has also been growing at Dallas. This fall, it boosted service from DFW to Boston and LaGuardia. It will start DFW-Seattle in July 2024. Also, in March, Delta partner Aeromexico will begin DFW-Mexico City.
• Delta’s announcement of Miami growth was its most aggressive move. It plans to boost Miami winter capacity by 27% or 1,300 seats per day over the 2023 level, “as the airline pushes to become the airline of choice in South Florida,” it said. Also, it promised “heartfelt community involvement.”
• Peak daily departures will total 37, with new service to five Delta hubs and Orlando and a new route to Washington National, an American hub. Equally important, Delta’s partnerships provide international service to 13 cities including seven of the top ten international destinations from Miami. The seven are Havana, London, Bogota, Sao Paulo, Santiago, London, and Mexico City.
• Delta’s Miami growth is long expected. In September 2019, Delta said it would pay $1.9 billion for a 20% stake in Santiago, Chile-based LATAM, the largest airline conglomerate in Latin America, ending American’s bid to become LATAM’s partner.

Forbes

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How United Airlines Monitors Social Media

KEY POINTS:

• Why it matters: The rise of social media virality has forever changed the way airlines communicate and respond to their customers in real time.
• State of play: We've all stumbled across a viral video of someone reaching their breaking point on an airplane and snapping at fellow passengers or the flight crew — and how the airline reacts dictates what happens next.
• "A crazy thing could happen at a chain hotel and nobody would care, but if it happens on board an airplane, it's going to be leading to the Today show the next day," Josh Earnest, United Airlines EVP of advertising and communications, said at the Axios Communicators event on Dec. 14.
• Zoom in: To stay ahead of moments that can directly impact the business's reputation, United Airlines has a crisis communications team embedded in the airline's international operation centers. The team monitors social media constantly.
• "There definitely have been times where information was coming in on social media that helped inform operational decisions," Earnest said.
• He added that more frequently the airline sees "weird things on social media" or its public relations team gets calls about incidents, and "having a direct line to the people who are running the operation of the airline is critical to our ability to respond in a timely fashion."
• "So if somebody has a bad experience on board a plane, they start tweeting about it. We can meet them at the gate and say, 'We're really sorry about your experience. What can we do to make it better?'" Earnest said.

Axios

PSA Airlines President Discusses $250,000 Signing Bonuses to FedEx And UPS Pilots

KEY POINTS:

• In recent weeks, Dayton-based regional airline PSA Airlines Inc. turned a lot of heads in the aviation industry and beyond.
• PSA Airlines’ corporate parent offered $250,000 signing bonuses to experienced UPS and FedEx pilots who are willing to work for PSA as captains.
• Dayton’s PSA Airlines offers FedEx and UPS pilots $250,000 bonus to join
• American Airlines, the company that owns PSA as a regional carrier, extended the offer to pilots with FedEx and UPS — two cargo carriers who have been friendly with American.
• While that offer has “technically” expired, Dion Flannery, PSA’s president, said the airline is still happy to have conversations with qualified candidates about the bonus.
  And the airline is still extending rather hefty incentives.

Dayton Daily News

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