Ten days ago the US Department of Transportation deflected requests for broad relief from airlines. The Agency indicated that rather than issue blanket exemptions for service requirements under the CARES Act it would act on an individual basis. Airlines followed suit with those requests. The initial DOT response is not promising. Spirit Airlines and JetBlue saw their requests broadly denied. The precedent set by these decisions is the latest in a string of indicators that the DOT is stuck in the past, providing guidance and regulation based on a decades-old view of the market.
By Order 2020-4-2, the Department modified its original methodology to address concerns raised by interested parties and to appropriately balance the needs of communities to retain at least minimal connections to the national air transportation system during the public health emergency, as required by the CARES Act, and the economic needs of certain segments of the industry.
Empty planes will be flying by the hundreds, spewing excess emissions and placing more airline employees at risk. But at least the DOT did not have to adjust its view of the industry to account for the new reality.
Frequencies and routes
The initial indications of this misguided view came with the issuance of the NPRM related to the service obligations. There were only two tiers of service considered: Destinations served at least 5x weekly or less frequently than that. In the revised final ruling the agency accounted for smaller carriers and the ability for much larger carriers to serve a destination from multiple hubs. That offered some relief to the smaller airlines but not enough.
The final ruling also showed some of the agency’s inability to adjust to the modern era. Suggesting that service to any airport in a metro area is sufficient rather than serving all the airports in that area makes sense. With demand at such low levels anything to reduce unnecessary flying is smart. But the agency also used its own definitions of metro areas, airport groupings that do not reflect the reality of operations today. Why is Everett not included in the Seattle metro designation? Why is Providence still included in the Boston designation while Portsmouth and Worcester are not? Moreover, passengers searching for flights to a metro area will not necessarily know what the substitution airports are because online booking platforms do not use the DOT’s metro area lists. Despite a request from the Port Authority of New York and New Jersey to address that challenge the DOT chose to ignore it.
(Mis)Understanding seasonal service
The DOT was convinced to respect the seasonal nature of some routes. Alas, it chose to do so in an archaic manner. IATA defines two global seasons. This is useful for airport slot allocations and helps reduce administrative burden around schedule planning. In is not particularly surprising that the DOT chose to use IATA’s definition. But it also ignores far more nuanced and flexible scheduling that most airlines (even the biggest ones) use, particularly on domestic/short-haul routes. Summer seasonal service rarely starts in late March and rarely runs until the end of October. The DOT doesn’t care. It chose mid-August and evaluated schedules based on that one week, forcing airlines to operate those routes for a much longer season.
JetBlue felt the pain of this decision acutely. It chose to base its obligations off its Winter schedule that includes service to Palm Springs, CA. It asked the DOT for an exemption to not serve that destination as Summer demand barely exists when there isn’t a global health pandemic in play. The DOT does not care, “JetBlue confirmed its selection of the winter 2020 base line schedule and therefore is committed to serving all points from that baseline. Palm Springs (PSP) is part of this baseline and will therefore be maintained as a Point of Minimum Service Obligation for JetBlue.”
What remains to be seen is how the short season routes will be treated. Forcing an airline to launch service earlier than previously planned simply to meet the arbitrary requirements dictated by the DOT would prove both operationally and financially foolhardy.
Far beyond “minimal connections”
Viewed through the prism of a traditional hub-and-spoke network carrier the DOT’s proposals could, perhaps, be described as complying with the sprit of the CARES Act’s mandate to maintain minimal connections for all communities with the national air transportation system. Viewed through the new reality that is a blend of network carriers and various other models, however, the idea of minimal connectivity takes on a new definition. The DOT acknowledged in its initial guidance that the goal is not to have every route continue to operate. That is excessive for the needs of the communities.
For airlines that serve an airport from multiple hubs the capacity can be drawn down significantly, shedding routes and flight frequencies, while maintaining compliance. For airlines with fewer routes and fewer frequencies the relief offered under the DOT’s ruling is insufficient, especially in light of the Agency’s unwillingness to issue exemptions.
The resulting networks deliver capacity far in excess of requirements.
Supporting associated businesses
Another argument for the increased service requirements covers the various other companies, contractors and agencies that benefit from an airplane showing up at an airport. This theory fails at many levels.
The airports will see compensation from a separate $10 billion fund. Perhaps not enough to offset all the losses, but it should offset the landing fees typically paid. Moreover, the PFCs that generate a large portion of an airport’s revenue come from passengers departing, not an empty plane.
Moreover, many of the airlines are asking the DOT to approve the exemptions. They are requesting that service to their airport be reduced. They recognize the idiocy of flying empty planes in and the financial burden that places on the airlines. These airports see the bigger picture, that flying empty planes now increases the chances of no planes flying in the future as it potentially knocks some airlines out of business.
But the DOT does not care. It sees the industry through a historical lens that demands service levels well in excess of commercial demand. The government is paying for that extra service so economics cannot be the only consideration, of course. But the requirements also exceed any rational view of minimum connectivity into the national airspace network. It is a view that benefits the larger legacy carriers at the expense of newer airlines with more flexible schedules.
The DOT could have shown a sliver of flexibility, approving exemptions for a maximum of 30 days at a time, for example. This approach is common for the agency in other circumstances. It could have acknowledged the large number of states operating under “stay home” or similar orders and exempted those airports. Only in Puerto Rico, where Aguadilla and Ponce are closed to traffic, was that approved.
And so, instead of ensuring compliance with both the spirit and letter of the law, while helping the airlines to conserve cash and plan longer term, the Agency is focused on some historical view of the industry that no longer makes any sense.
For a (generally) up-to-date listing of airlines and their operational levels check out this spreadsheet maintained by PaxEx.Aero and other industry experts.
More on COVID-19 and the airlines affected
- Alaska Airlines offers elite bonus earning in face of COVID-19 booking weakness
- Massive cuts, uncertain recovery timelines for aviation in the face of COVID-19
- Qantas cuts international 25% through September facing coronavirus-induced demand drop
- Spirit Airlines plans 5% growth reduction for April as COVID-19 hurts demand
- American Airlines slashes schedule, increases flexibility for customer rebookings
- US to block some European visitors
- Two key takeaways from American’s latest schedule cuts
- Regulators suspend slot rules, opening door to deeper airline cuts
- Beyond route cuts, airlines initiate extended suspension of operations
- Gogo looks to ride out coronavirus-related dip in demand
- Trans States Airlines: The first US airline victim of COVID-19
- JetBlue removes 40% of capacity, delays new deliveries as demand drops
- Airlines get a break on coronavirus EC261 comp, looking for more
- Airport lounges shutter as airlines slash capacity
- Will COVID-19 delay the opening of Berlin Brandenburg Airport?
- Qatar Airways plans 75% capacity cut in response to COVID-19
- Emirates, Turkish Airlines slash route networks, ground aircraft
- JetBlue plans additional draw down in service
- Is it time for US airports to start closing terminals??
- Converting to cargo: Putting passenger planes to use in the COVID-19 era
- IATA anticipates recession, slower recovery, as COVID-19 impact drag on
- US carriers cut frequencies, not destinations as they seek federal funding
- JetBlue plans 70%+ cut in April operations
- Cancelled flights, vouchers and the airline cash flow crunch
- Spirit Airlines reportedly cutting 90% of flights
- US airlines cut deep, but not deep enough
- An eerie quiet over New York City: The flights are gone
- Who wants what? How the US airlines are responding with CARES Act funding on the line
- Delta, United extend elite status by a year, adjust other benefits
- DOT adjusts, finalizes airline route requirements for CARES Act funding.
- Lufthansa announces major, permanent fleet restructuring
- Air Canada, Alaska Airlines extend elite status
- Deeper cuts, reprotect options coming for JetBlue
- Air Canada replaces seats with cargo in 777-300ER cabin
- American Airlines extends status, eases qualification
- A new take on amenity kits in the COVID-19 era
- COVID crushing inflight connectivity: Part 1
- Stuck in the past, DOT botches its CARES Act implementation
- DOT grants exemptions to Delta, Alaska Airlines, Hawaiian Airlines under CARES Act obligations
- Introducing yin-yang seating for economy class
- Inflight social distancing will kill short-haul LCC travel: IATA
- Gogo furloughs 60% of workforce, applies for CARES Act support
- COVID crushing inflight connectivity: Part 2
- De Havilland, Air Canada Cargo partner on Dash 8-400 cargo conversion
- JetBlue plans new route network for CARES Act compliance
- Spirit Airlines running triangle routes to meet CARES Act requirements
- Sun Country wins big as United, Frontier lose in latest CARES Act ruling
- Frontier Airlines pushes new route plan for CARES Act compliance
- Argentina plans to restart flights in September 2020
- Spirit Airlines asks DOT again to drop destinations
- Delta Flight Products, TechOps develop isolation pod for COVID-19 military transport
- JetBlue aims to drop 16 "major hub" destinations from its network
- Allegiant scores leniency from DOT in CARES Act obligations
- Panasonic Avionics implements furloughs to address slowing business
- American, Delta confirm accelerated fleet retirements
- Airbus aims to ease "COVID Combi" temporary freighter conversions
- The Weekly Wrap: FlightPlan, personal screening and more!
- United’s long-haul operations focus on a new "workhorse"
- United plans touchless bag tag kiosks
- Temperature scans in, 767s out for Air Canada, Rouge
- JetBlue, Spirit score exemptions to drop service at major US airports
- IATA recommends against blocked middle seats, favors "layered" protections
- United plans to resume (cargo for now) Hong Kong-Singapore service
- JetBlue suspends six cities through June
- Project Wingman USA Opens Lounges for Frontline Healthcare Heroes at Two Major New York City Hospitals
- Cape Air’s ugly April stats (and some possible good news for May)
- Fighting for the middle: A pandemic seating shift
- Avianca declares bankruptcy, seeks protection in restructuring
- United raises ire in cutting hours for salaried employees
- DOT further relaxes airline CARES Act obligations
- Allegiant sees quick recovery on the horizon
- Delta drops 777 fleet as coronavirus cuts continue
- JetBlue offers free TrueBlue Mosaic status, plus a year extension
- United faces lawsuit over M&A employees pay cut
- Optimism on the horizon: The Weekly Wrap 15 May 2020
- Beached Whale: A380’s future turns more bleak
- TSA implementing lower-touch screening protocols
- Volotea plans for growth into a COVID-affected Summer
- Health passports in our future: The Weekly Wrap
- LATAM seeks US bankruptcy protection, plans to continue operations
- JetBlue plans return of international markets in June
- Frontier, Mobile bicker over flights to Orlando
- US retaliates against China, blocking all flights
- China blinks, US to back down on flight ban
- ATPCO moves to ease ticketing changes for airlines worldwide
- Inflight magazines are not dead yet: The Weekly Wrap–5 June 2020
- From pre-flight massages to COVID-19 testing: XpresSpa pivots to XpresCheck at JFK
- GermFalcon to take flight as Honeywell UV Cabin System
- Allegiant driving passenger traffic recovery
- Air travel is bouncing back: Can the trend hold??
- Masks Matter: US carriers plan more enforcement for on-board behavior
- JetBlue plans to outsource airport operations at (more) smaller destinations
- Norwegian set to restart European services from 1 July
- Jilted travelers get aggressive in seeking airline refund enforcement from the DOT
- LATAM Argentina, LEVEL Europe face bankruptcy
- Air Canada launches half-priced Aeroplan rewards in North America
- AirShield proposes curtains of air to separate passengers in flight
- Curing Catering Concerns: The Weekly Wrap–19 June 2020
- A big hint that British Airways will retire its 747s soon
- JetBlue’s crazy summer of new routes
- Air Canada fights back on refund demands, disputes DOT authority
- JetBlue pilots secure no furlough deal through April 2021
- Peek inside the largest converted cargo aircraft flying today
- ZIM Flugsitz seeks insolvency protection
- JetBlue launches trial for Honeywell’s UV Cabin System (f/k/a GermFalcon)
- ExpressJet to wind down operations on 30 September
- Spirit Airlines avoids pilot furloughs in October
- A stalled recovery: Airline traffic retreating
- United Airlines introduces at-airport COVID testing for SFO-Hawaii flights
- AirAsia Japan halts operations
- Cathay Dragon shuttered, 8,500 jobs eliminated
- Researchers link 59 Irish COVID cases to inbound long-haul flight
- A fleet of salvage-priced planes
- Global Eagle charts a new course out of Chapter 11
- United launches pre-flight COVID testing to London
- Allegiant ditches advertising, improves conversions
- Interjet lacks fuel, cancels flights for two days
- Canada plans aviation bailout, so long as passengers get refunds
- JetBlue to stop blocking seats in January
- JetBlue plans additional spending cuts, debt raises into 2021
- Norwegian abandons long-haul operations, refocuses on 737 routes in Europe
- Air Canada, Transat merger approved, with notable conditions attached
- Scammy COVID-safety "certifications" could put industry recovery at risk
- ATPCO adds testing, vaccine requirements to flight search results
- US DOT puts the squeeze on Hong Kong
- Air France secures €4 billion, (maybe) cedes Orly slots
- Air Canada refunds (finally) coming with government bail-out
- United adds Europe routes in hopes of a recovery
- Finnair adds A330 cargo conversion with Lufthansa Technik, Airbus
- Anti-microbial power outlets set to fly
- Aer Lingus delays Manchester-US service launch
- Air Canada fights back, disputes $25 million DOT fine
- Cathay Pacific giving away "Plane for a Day" in vaccination push
- JetBlue sees only 300 unvaccinated as deadline looms
- Ethiopian, Aero HygenX partner to deploy UV-C cabin disinfection
- Air Canada fined $2 million in DOT settlement
- JetBlue plans February schedule adjustments
- Northern Pacific visits Saipan in search of partners
- Eastern Airlines plans Shanghai flights
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Howard Miller says
Could NOT agree more with Seth Miller’s (no relation despite our shared family name) spot on analysis.
Forcing airlines like JetBlue to serve cities like Palm Springs, CA during the summertime to maintain eligibility for CARES funding, when it does NOT operate there during the summertime in the best of times, is patently ridiculous in every way, shape and form.
And that’s before considering just how wasteful it is in terms of fuel, or of course, needlessly spewing CO2 emissions at a time when we should be striving to reduce them.
Here’s hoping this insanity is revisited ASAP and that more rational minds will make adjustments to what clearly is the IRRATIONAL, and yes, terribly outdated approach as embodied in the DOT’s decision seen thus far.