When the first plane hit the Twin Towers on 9/11, my former client Dave Yost was at the New York Stock Exchange to ring the opening bell. Yost, who executed the successful merger that created the Fortune 30 company AmerisourceBergen, shared with me his awe of former NYSE chief Dick Grasso, also a former client. Yost recounted how Grasso led everyone in the building downstairs, personally served everyone water and other available drinks, and then immediately began to determine how to get the NYSE back up and running.
“Grasso’s leadership was impressive,” Yost told me.
On the leadership front, Yost was pretty impressive himself. Most mega mergers fail to deliver the promised results, but Yost bested the goals and objectives he said he would achieve and within a tighter time frame to boot. Yost consistently ranked high in stories about CEOs who delivered the biggest bang for their compensation bucks because his take home pay was decidedly lower than his rivals. Yost also flew coach because ABC had ultra-thin profit margins, and when executives and salespersons he was traveling with offered him their upgrades because of their frequent flyer status, Yost declined the gestures and sat in his assigned coach seat.
America was once chock full of competent and capable leaders as Grasso and Yost, but Transportation Secretary Pete Buttigieg and United CEO Scott Kirby have become the norm. Americans not all that long ago would have demanded the resignations of Buttigieg and Kirby for their poor leadership that was responsible for the disastrous July 4th holiday travel, resulting in thousands of flights being canceled and crews and passengers stranded at airports, sometimes for days.
Buttigieg and Kirby further disgraced themselves by blaming each other when it’s undeniable both were at fault.
Most Americans likely imagine that the FAA, which Buttigieg oversees, is a competently run agency given that it is responsible for ensuring airline travel safety. In fact, the FAA is a very troubled organization and America’s air traffic system is increasingly more fragile, despite all the technology gains of the past decades.
The FAA’s sorry state was revealed in an Inspector General report made public just weeks ago that the media shamefully ignored. The report’s findings are alarming beyond belief.
As but one example, the New York Terminal Radar Approach Control, which is responsible for three of America’s busiest airports, is staffed at 54%—the lowest in the country. Even more alarming is that 64% of the workforce are trainees, compared to the national average of 27%.
Miami Tower is only staffed at 66%.
“FAA has made limited efforts to ensure adequate controller staffing as critical air traffic control facilities continue to face staffing challenges,” the IG report warned.
Buttigieg’s claim that a shortage of air travel controllers isn’t responsible for flight delays is a flat out lie. According to the IG report, Jacksonville Center and New York TRACON in 2022 respectively reported over 300 and 170 so-called staffing triggers, which is when FAA management and staffing constraints force a reduction in air traffic.
The FAA has long been a chronically underfunded and understaffed agency; according to National Air Traffic Controllers Association (NATCA), prior to the COVID-19 pandemic the controller workforce was at a 30-year low. During the pandemic, the FAA halted training of new controller recruits, a process that takes three years and has a high failure rate.
“FAA cannot ensure it will successfully train enough controllers in the short term,” the IG report says.
No doubt some will argue that Buttigieg can’t be held responsible for the pandemic training disruptions, to which I respond with a reminder of the leadership of Drew Lewis, who served as Secretary of Transportation in the Reagan Administration.
August will mark the 42nd anniversary of Ronald Reagan’s watershed decision to fire air traffic controllers who called a strike and were prepared to bring commercial aviation to a standstill. Although he was a former head of the Screen Actors Guild whose threat of a strike resulted in creatives receiving residual payments, Reagan wasn’t prepared to let critical federal employees to stage a walkout, which his AG advised was illegal. I’ve linked to Reagan’s press conference announcing the firings, which serves as a reminder when America once had decisive and competent White House leadership
It was Drew Lewis’ responsibility to keep the air traffic control system functional, despite the firing of at least two-thirds of America’s certified professional controllers. He did so by relying on experienced air traffic control managers, calling retired controllers back into service, and reassigning military controllers to work at commercial airports. Under Lewis’ leadership, there was little air traffic disruption.
Notably Lewis was well qualified to serve as Transportation Secretary. He was an accomplished businessman whose various accomplishments included reorganizing the bankrupt Reading Railroad and merging it into Conrail. Lewis was also responsible for convincing Reagan to support an increase in the federal gasoline tax to help rebuild the interstate highway system.
By comparison, Buttigieg is someone of no particular business accomplishment and he has no tangential experience to serve as Transportation Secretary, unless you consider an award-winning streetscape design he claims credit for while serving as a two-term mayor of South Bend, Indiana. Buttigieg’s official bio boasts that he is the first openly gay person confirmed in a president’s cabinet, an example of how gender and race figures very much into his agenda.
Despite FAA’s precarious state, the Biden Administration has yet to appoint a permanent leader to run the troubled organization. Phillip Washington, Biden’s nominee to head the agency, in March withdrew his name from consideration because of intense opposition from Republicans, who argued that Washington lacked aviation experience and raised questions about his connection to a corruption investigation in Los Angeles. Washington has denied any wrongdoing.
The Biden Administration two weeks ago named Polly Trottenberg as acting head of FAA. Trottenberg, a career Democratic politico, formerly served as New York City’s transportation commissioner; her FAA bio says that she was responsible for the safe, efficient, and “equitable” operations of New York City’s transportation network.
It’s a given that even under the best circumstances, there are going to be delays because of the air traffic control shortage. When there are major rainstorms and other inclement weather conditions, disruptions will fast multiply, particularly in the New York area. While airlines can’t control the weather, they can accurately predict atmospheric conditions well in advance and take the necessary precautions.
They don’t. The airlines prefer to allow their customers to show up at the airport when they know full well they will be forced to cancel a slew of flights. When flights are cancelled, crews immediately become displaced, which results in more flight cancellations because there aren’t enough crews to service the planes. A veteran travel industry source told me that flight crews must call in to get their assignments, and that last week United crew members were sometimes on hold for eight hours or more. The crews don’t get paid unless they are working a plane.
Rainstorms last week wreaked havoc on United’s operations, forcing the carrier on Wednesday to cancel 750 flights, representing one fourth of its schedule for the day. One person who avoided the inconveniences of delays and cancellations was United CEO Scott Kirby, who opted to charter a private flight from Teterboro airport in New Jersey to Denver.
Given that Kirby has a home in Boulder and United said he paid for the charter of a Hawker 800 out of his own pocket, it seems a safe bet that Kirby’s trip was leisure related. If Kirby needed to make some critical business meeting, United would have noted that in the PR pablum laden statement it issued saying his trip was “insensitive” to United’s customers and “team members.”
The corporate media is rife with pundits like CNBC’s Joe Kernen who promote the concept of the imperial CEO and insist the Kirby didn’t do anything wrong.
“Is (Kirby) really supposed to go to a United counter and see if he can get wait listed on another United flight. Is that what we really expect him to do?” Kernen asked.
What I’d expect is that Kirby and his entire senior management team would be working at Newark airport helping their “team members” deal with legions of angry customers and mitigate the operations crisis. Kirby received more than $10 million in compensation in 2022, making him the highest paid airline executive.
Given that United’s stock price is virtually unchanged since United’s operations meltdown,Kirby no doubt will continue pocketing his embarrassment of compensation riches.
What makes Kirby’s use of a private jet especially galling is that earlier this year he appeared on CNBC to tout United’s “sustainable flight fund” supporting start-ups focused on the reduction of carbon emissions in aviation. United boasts on its website that it is committed to become “100% green” and reduce its greenhouse gas emissions 100% by 2050.
An airline CEO genuinely committed to reducing gas emissions shouldn’t be flying on a private jet to a location where his company has regularly scheduled flights. Moreover, Kirby’s private flight diverted FAA’s limited resources, which possibly could have resulted in one or more United flight cancellations.
Kirby isn’t alone looking to avoid the inconveniences of commercial air travel. The DOT’s inspector general in February opened an investigation into Buttigieg’s use of FAA planes when commercial flights were available. Buttigieg denies any wrongdoing.
Regardless, Buttigieg has clearly demonstrated that he’s way over his head overseeing the FAA. His poor leadership over the National Highway Traffic Safety Administration is a worthy subject for a separate column. Kirby hightailing it out of town on a private plane when United was in the midst of an operations crisis demonstrates that he lacks the judgment and character to serve as CEO of a commercial airliner.
Left unchecked, America’s horrific airline travel industry is going to get a lot worse. The American public needs a Rosa Parks moment making clear it will no longer accept the status quo. Rest assured, if the public demands the removal of Buttigieg and Kirby, it will serve as a wake-up call for the Biden Administration, Congress, and every other working airline chief executive.