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Dec 17, 2016

Turbulent times, turbulent skies

Co-produced with PRX Logo

The man who served as chairman in the last few months of Donald Trump’s campaign is headed to the White House. Steve Bannon, Trump’s strategist-in-chief, has been widely criticized for fanning divisive racism and sexism and running a news platform aimed at right-wing groups, including white nationalists. We begin this episode of Reveal by taking a look at how Bannon operates and what he really believes.

Based on interviews with people who know Bannon and speeches he’s given, we trace his journey to the extreme right. From his frustrations in the Navy in the 1970s and ’80s to his outrage when America was attacked on 9/11 and his alignment with the tea party, we explore why Bannon believes America is fighting an epic battle between good and evil.

After this look at Bannon, Reveal switches gears just in time for the holiday travel season.

A lot of us are packing our bags and heading to an airport to visit family and friends. But for some of us, things won’t go according to plan. We’ll relive a travel nightmare and find out how one minor delay caused a chain reaction of snafus.

Then we take a close look at Spirit Airlines, arguably the most profitable “ultra-low-cost carrier” in America. Spirit is known for charging fees for everything from carry-on bags to water, and we meet the man who came up with this idea. Charging ancillary fees saved Spirit from bankruptcy and has become a model for larger, more established airlines, which have been adopting Spirit’s policies for years.

And finally, we’ll hear from a special guest who was decades ahead of her time in predicting that no frills would become the new reality of air travel.

Credits

Support for Reveal is provided by The Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation and Mary and Steven Swig.

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Transcript

Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal's radio stories is the audio.

 

  Section 1 of 5          [00:00:00 - 00:10:04]
(NOTE: speaker names may be different in each section)

 

Al Letson: From The Center for Investigative Reporting in PRX, this is Reveal. I'm Al Letson. With about a month to go before his inauguration, Donald Trump is shaping up his cabinet, making choices that are worrying a lot of Democrats and even a few Republicans. Steven Bannon, who chaired the last few months of Donald Trump's divisive campaign, will be the chief strategist in the White House. Almost as soon as that was announced, people started protesting.

 

[00:00:30]

Protesters:

 

No Bannon. No KKK. No fascist USA. No Bannon. No KKK. No fascist USA.

 

Al Letson: That was an anti-Bannon rally of about 500 people outside of LA city hall last month. The Liberal organization, Move On, has collected more than a million signatures calling for Bannon to go. And smaller protests have popped up all over the country.

 

Shay Roman: Steve Bannon I feel is a man who appeals specifically to extremists and so just his appointment sends this clear message about fear and hate as, I guess being the accepted narrative for our country and our government.

 

[00:01:00]

Al Letson:

 

That Shay Roman with a Jewish activist group called If Not Now. Much of the criticism of Steven Bannon has focus on Breitbart News, the Conservative website he ran before joining Trump's team. Bannon has called Breitbart the platform of Alt-Right, which includes white nationalists. Shay says that Bannon and websites like Breitbart are giving hate a platform.

 

Shay Roman: We have to think bigger than just the policies and the laws that might pass or might not, and just think about a larger social narrative that hating is okay and placing blame on other folks is okay. I mean, it's those kinds of ideas that lead to mass genocide.

 

[00:01:30]

Al Letson:

 

Here's some Breitbart headlines published on Bannon's watch. "Would you rather your child had feminism or cancer?" Or this. "Young Muslims in the West are a ticking time bomb." Conservative commentator, Bill Kristol, was called a "Renegade Jew." Beyond the headlines on his website, Bannon himself has made some controversial statements. He told Donald Trump his stance on immigration isn't conservative enough. He called a former female employee a bimbo, and in 2011, he lashed out at feminists, while promoting a film praising conservative female politicians like Sarah Palin and Michele Bachmann.

 

[00:02:00]

Steve Bannon:

 

That inside, the women that would lead this country would be pro-family, they would have husbands, they would love their children. They wouldn't be a bunch of dykes that came from the Seven Sisters schools up in New England.

 

[00:02:30]

Al Letson:

 

We'll hear more of Steve Bannon in his own words coming up, but first, some insight into how he operates. His reveals, Emily Harris.

 

Emily Harris: It's not just what Steve Bannon says that angers people who don't want him advising the President. It's also the beliefs he supports and allows to flourish on platforms he controls. Here's Bannon on his radio show last February with anti-Islamic extremist, Pamela Geller. They're talking about a speech President Obama had recently given on Islam.

 

[00:03:00]

Joel Pollak:

 

The truth is the only religion attacking, subjugating, and slaughtering members of other religions en mass is Islam. The religion attacking other religions is Islam and President Obama said nothing of this. Nothing of the gender apartheid creed, apartheid cultural annihilation.

 

Kurt Bardella: He's a smart, savvy, tough operator. What was he doing, Pamela Geller?

 

Joel Pollak: He was doing what he's been doing for the past seven years. He's been in Jihad denial. He was pandering to a Muslim ...

 

[00:03:30]

Emily Harris:

 

Some Breitbart employees have defended Bannon, as he's faced accusations of racism and misogyny. Here's Joel Pollak, a senior editor and the website's chief legal council on CNN.

 

Joel Pollak: Not at all. Steve Bannon does not have a bone of prejudice in his body.

 

Emily Harris: Pollak tipped his head as he spoke, and he pointed to the yamaka he wears as an orthodox Jew. He noted that Bannon has hired women, Asian Americans, a Brit from a Muslim family to run Breitbart's London office.

 

[00:04:00]

Joel Pollak:

 

And in fact, Steve Bannon went out of his way at Breitbart to look for talent among non-traditional conservatives.

 

Emily Harris: But some ex-employees have been critical. Former Breitbart spokesman, Kurt Bardella, quit during the presidential primaries. He said the news site he supported had by then turned into a Trump propaganda machine. Bardella told CNN it doesn't matter if Bannon himself is sexist or racist.

 

[00:04:30]

Kurt Bardella:

 

Maybe he's not any of those things. Well, the audience that you're catering to certainly are those things, and so you're deliberately playing to that, playing to the worst divisiveness, the most prejudices, the worst racial divides to either get traffic or motivate people to support you. And I think that's despicable.

 

Emily Harris: Brian Lens edits the Hate Watch blog at the Southern Poverty Law Center. He can't forget one Breitbart headline.

 

Brian Lens: "Hoisting the Confederate flag loud and proud."

 

Emily Harris: "Hoisting the Confederate flag loud and proud." This was two weeks after a young white man had killed nine African Americans in a church in South Carolina. Breitbart staff dismissed concerns about headlines like that saying they're just provocative, but Lens says it shows that Bannon exploits, creates, and tolerates fear and divisiveness in order to meet strategic goals. And that, he says, reveals who Bannon is.

 

[00:05:00]

Brian Lens:

 

I don't think that there is evidence to suggest definitively that Steve Bannon is a white supremacist or a closeted fan of the Third Reich. I think there is ample evidence to suggest, to prove, that under Steve Bannon's leadership, Breitbart News became the media arm of Alt-Right. It's white supremacy rebranded under a different name to make it politically palatable.

 

[00:05:30]

Emily Harris:

 

Bannon downplays charges of racism in right-wing movements, including in the Tea Party which he was deeply involved with. At a conference of Conservatives at the Vatican two years ago, Bannon said, "There are always fringe groups who join in, but they don't set the agenda." BuzzFeed recently dug up this recording of that speech.

 

Steve Bannon: I think that when you look at any kind of revolution, you always have kind of a ... And this is a revolution. You always have kind of people, that are, some groups that are just [inaudible 00:06:14]. I think that will all burn away over time and you'll see more of a majoring center of [inaudible 00:06:19].

 

[00:06:00]

Emily Harris:

 

Some new presidents might consider such negative attention of a top advisor a liability. Not this one. After the election, Harvard hosted a forum with top staff from both the Trump and the Clinton campaigns. These post-mortems are usually pretty friendly, but this time, things got heated when Clinton staff accused Bannon of divisive and racist tactics. Trump's campaign manager, now senior advisor, Kellyanne Conway, fired back.

 

[00:06:30]

Kellyanne C.:

 

The reason Steven Bannon was hired is the reason that he's going to be the chief strategist and special councilor to the President of the United States, is because he's a brilliant tactician.

 

Emily Harris: So let's take a look at Steve Bannon's tactics. First at Breitbart, all caps, click-me headlines go to articles that sometimes don't substantiate the promised hype. The site mixes commentary with reporting. It focuses persistently on certain themes that match its anti-immigrant, anti-feminist, anti-political establishment agenda. Breitbart casts Black Lives Matter as inciting a race war aimed at destroying America. Whenever planned parenthood is mentioned, Breitbart calls the organization simply an "Abortion chain." Sometimes even an abortion chain with Nazi roots, ignoring other services planned parenthood provides, like sex education and birth control to avoid unwanted pregnancies in the first place.

 

[00:07:30] Bannon served on Breitbart's board since the private news company was started. He took over operations as executive chair in 2012, after founder, Andrew Breitbart, died unexpectedly. But that's not all Bannon did that year. He also started a non-profit to pursue deeper research, working in tandem with the daily news site. The mission statement of the Government Accountability Institute, known by its initials GAI, is to investigate and expose crony capitalism, misuse of taxpayer moneys, and other government corruption and malfeasance. Sounds a lot like "Drain the swamp."

 

[00:08:00] Bloomberg Businessweek reporter, Joshua Green, visited GAI last year. It's in Tallahassee, Florida.

 

Joshua Green: It looks something like what you'd get if Scarlett O'Hara were to design an office park. It's these little brick buildings, which are pretty plain, but there's big verandas with swooping fans and the GAI staff will sit out on the veranda smoking cigars on afternoons and brainstorm about how to kinda go after Hillary or do their thing.

 

[00:08:30]

Emily Harris:

 

Breitbart and GAI share staff and have other financial ties, but unlike Breitbart, GAI doesn't traffic in quick hits. Researchers take months, scraping the internet for credible dirt. Joshua Green calls this two-pronged approach "Bannon's Dr. Jekyll and Mr. Hyde."

 

[00:09:00]

Joshua Green:

 

On the one hand, you had Bannon doing this very serious, legitimate standup, nonpartisan research through GAI, which I thought of as being his Dr. Jekyll side. Then on the other hand in his other life, he was the publisher, executive chairman of Breitbart News, which was this loud, obnoxious crusading, sometimes offensive right-winged news site, that I think of as being more like a Mr. Hyde.

 

[00:09:30]

Emily Harris:

 

The combination means Bannon can deliver the same message but packaged differently for two very different audiences. Fans of the right-winged talk show circuit and subscribers of mainstream media. Let's breakdown one example of how this works. Last year, presidential hopefuls were still testing their chances and HarperCollins published a book called "Clinton Cash." The story laid out connections between foreign businesses and donations to the Clinton Foundation. It was written by GAI's-

 

  Section 1 of 5          [00:00:00 - 00:10:04]
  Section 2 of 5          [00:10:00 - 00:20:04]
(NOTE: speaker names may be different in each section)

 

Emily Harris: - donations to the Clinton Foundation. It was written by GAI's president, Peter Schweitzer, based on information GAI researchers had dug up. It alleged that Clinton abused her position as Secretary of State. An early copy wound up in the hands of several mainstream media outlets, including the Washington Post.

 

Speaker 2: We had been pursuing a lot of story lines involving the Clintons.

 

Emily Harris: The Post's Deputy National Politics Editor, Peter Wallsten, knew Schweitzer from his previous publications. Schweitzer doesn't only go after Democrats. He wrote a book in 2011 revealing insider stock trading by many members of Congress. That got a law changed. In 2013, Schweitzer accused Republican leader, John Boehner of essentially charging companies to get hearings on certain bills. Schweitzer's reputation is part of why the Washington Post paid attention.

 

[00:10:30]

Speaker 2:

 

If Peter Schweitzer called me up tomorrow and said that he had an amazing story tip for me, I would listen to what he had to say and then I would decide whether it's worth pursuing and then we would, if we pursued it, we would report it to the ground and figure out whether it was a story.

 

[00:11:00]

Emily Harris:

 

In 2015, articles investigating the Clinton Foundation and foreign donations spread throughout the mainstream media. Some cited leads from Schweitzer's research. Then Breitbart came back in the picture. The site posted a list of 11 explosive facts in the Clinton book that it said were verified by the mainstream media. Bloomberg's Joshua Green says this is the perfect example of what Bannon's backers call his brilliance.

 

[00:11:30]

Joshua Green:

 

He'd go over to Breitbart and they could run these rolling narratives saying look, it's not just us saying that Hillary is nefarious and evil and corrupt, here's the New York Times saying it over here and here's a story from the Washington Post and here's 60 Minutes. And he could both excite the right wing populist base while at the same time disillusioning Hillary Clinton's core of support.

 

[00:12:00]

Emily Harris:

 

Whether Steve Bannon is going after Hillary Clinton or Republicans in Congress, his big beef is what he calls Crony Capitalism. People who profit from their political power. In that Vatican speech two years ago, Bannon bragged about Breitbart helping get Republican Majority Leader Eric Cantor knocked out of office by a Tea Party candidate.

 

Steve Bannon: The reason this guy won is quite simple. It's that middle class people and working class people are tired of people who say they're conservative selling out their interests every day to Crony Capitalists.

 

[00:12:30]

Emily Harris:

 

If you peel back the layers, this fury at politicians getting rich is at the core of Bannon's motivation. It may also be his Achilles Heel. Democratic Senator, Jeff Merkley says Bannon's boss, Donald Trump, campaigned against money influencing Washington, but key cabinet positions so far signal the opposite.

 

Jeff Merkley: I think many folks thought he would take on the corporate culture that is kind of symbolized by "drain the swamp." However he's not draining the swamp unless he's draining it directly into his cabinet.

 

[00:13:00]

Emily Harris:

 

Merkley is a Trump opponent, but even some of Trump's core supporters have started to air similar concerns about Crony Capitalism within the White House. As Trump's key White House strategist, the question is how might Steve Bannon respond?

 

[00:13:30]

Speaker 2:

 

That story is produced by Reveal's Emily Harris. So what does Steve Bannon really believe in and where do those belief's come from? Reveal's Amy Julia Harris has been listening through his speeches and talking to people who know him. So Amy, what did you find out?

 

Amy Harris: Well, the things that make headlines for Steve Bannon are him making disparaging comments about women and he's told some of his friends that he thinks that some people are genetically superior to others, that only property owners should be able to vote. He's been kind of extreme in a few of these off-hand comments that he's made. But the recurring theme throughout his speeches is something that Emily touched on in her story. What he sees as Crony Capitalism and that really, really angers him.

 

[00:14:30] Breitbart News was built on the rise of the Tea Party and their whole platform was based on anger on the elites in the existing system that they felt like wasn't working for them. And Steve Bannon got in the trenches with the Tea Party. He was traveling around the country with them and here he is at a rally in New York City in 2010, really laying out what's on his mind.

 

Steve Bannon: In the last 20 years, our financial elites in the political class have taken care of themselves and led our country to the brink of ruin.

 

Crowd Member: Amen!

 

Speaker 2: Do you think Crony Capitalism is Bannon's number one issue or is there anything else that's kind of vying for that spot?

 

[00:15:00]

Amy Harris:

 

So, Steve Bannon is really worried about the unmooring of American Society, saying that we're losing our Judeo-Christian center. Our values are sort of under attack and he sees that as going hand in hand with the rise of Islam and the secularization of the West.

 

Steve Bannon: Now that all converges with something that we have to face and it's a very unpleasant topic. But we are in an outright war against the Jihadist Islam Islamic Fascism. This war is, I think when metastasizing far quicker than governments can handle.

 

[00:15:30]

Amy Harris:

 

So here he is speaking to the Vatican in 2014, laying out the threat he sees of radical Islam. He likes these big fights. I talked to one of his friends who says that he sees life as an epic battle between good and evil. That's how he views everything.

 

Speaker 2: So where do you think these views came from?

 

[00:16:00]

Amy Harris:

 

I think there are a few different moments in Steve Bannon's life that really crystallize his political thinking. One of them was his time in the Navy in the late 70's, early 80's. He was serving under President Jimmy Carter. He was on a destroyer and was sailing around the Persian Gulf and I talked to some of his Navy friends who said that time really made Steve Bannon even more conservative, because he saw Jimmy Carter as weak. He didn't like being pushed around by the Soviets and was just kind of embarrassed by America's foreign policy. So Reagan's presidency really resonated with him.

 

[00:16:30] Steve Bannon after he left Goldman Sachs was making this documentary about Reagan and it was initially going to be a standard biopic, but then September 11th happened and that really changed his thinking. Here is his co-producer, Tim Watkins, laying out how Steve Bannon's thinking shifted.

 

[00:17:00]

Tim Watkins:

 

9/11 happened and it kind of changed our perspective on the whole idea of the film. We found kind of this thread throughout Ronald Reagan's youth and into his public life and how he had a strong disdain for Communism. So, that kind of changed the whole direction of the film we were making to what it ultimately became today. And the thesis that kind of came out of that is that life is a battle of good versus evil and history repeats itself.

 

[00:17:30]

Speaker 2:

 

So this guy is going to be in the White House, he's going to have the President's ear. What should we expect? What kind of advice is he going to be giving Donald Trump?

 

Amy Harris: You know, I think we sort of have to go on what he has said. He's come out strongly against illegal immigration and some immigration and he said that he's very pro typical conservative values, family values. He's pro-life. People have said that those are sort of the guiding principles of Steve Bannon and those are going to be the things that he tells Donald Trump.

 

[00:18:00]

Speaker 2:

 

Thank you very much. That's Reveal's Amy Julia Harris. And for the record, we requested an interview with Steve Bannon, but his office didn't get back to us. Our team here at Reveal will continue to investigate the incoming Trump Administration and we'll bring you the stories over the coming weeks and months.

 

Coming up, with the holidays just around the corner, a lot of us will be packing our bags and our gifts and heading to an airport to visit family and friends. And for some of us, things won't go according to plan. Like these folks who tried to save money by flying a budget airline.

 

[00:18:30]

Speaker 9:

 

Chaos. It was just pure chaos because no one had any clue what was going on, where to go, what to do. There was no signage and we were like, well should we just get our bags and sleep in the airport or what's going on?

 

Speaker 2: A no-frills travel nightmare next on Reveal. From the Center for Investigative Reporting, and PRX.

 

[00:19:00]

Julie Beachhead:

 

Hey listeners, Julie Beachhead here, Reveal's Digital Editor. A lot has happened this year and we've produced a lot of investigative reporting because of it. 52 shows. And you've listened to it all, right? So tell us, what was your favorite story or moment from Reveal this year? We want to hear from you. Because you've stuck by us as we've uncovered injustices, confronted wrong-doers and spoke up for the vulnerable.

 

[00:19:30] Which story really affected or outraged you? Was there a scene that you just can't shake? A moment that stuck with you? Go to revealnews.org/fav, that's F-A-V, to tell us about the time Reveal made you stop and listen. We may use some of your responses on the show or online. So again, that's revealnews.org/fav.

 

[00:20:00]

Speaker 11:

 

From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

 

  Section 2 of 5          [00:10:00 - 00:20:04]
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(NOTE: speaker names may be different in each section)

 

Al Letson: Reporting and PRX. This is Reveal. I'm Al Letson.

 

It's Christmas time, and I cannot tell you how happy I am to be talking to you now. Not because I love the holidays. No, I'm a little Grinchy. No, me talking to you right now means that this year, I am not working on an airplane.

 

You see, many years ago, before I got into my current line of work, I was a flight attendant. I did it for almost 10 years working for a regional airline, that for the most part, was a great job, except during the holidays. It gets rough. Planes are oversold. People tend to pack their brains with their luggage, and well, folks can be challenging.

 

[00:20:30] But even when it's not the holidays, travel can be stressful. Everyone has a nightmare story. And this next one comes from our Executive Producer, Kevin Sullivan, or actually, his sister, Erin.

 

[00:21:00]

Erin:

 

So our flight was supposed to take off at around 8 o'clock from Baltimore on Thursday, and we didn't arrive to Paris until about 5 o'clock on Saturday.

 

Al Letson: Erin and her husband had booked a flight with a discount airline out of Iceland called Wow Air. They were flying to Paris for Euro 2016. Apparently, this is a big deal in the world of soccer. Sorry, I know nothing of this. Anyway, when they get to the airport, they go to the gate and find out their flight's delayed, so they're going to miss their connection in Reykjavik.

 

[00:21:30]

Erin:

 

We were running a little bit late. Then we were kind of happy that the flight was delayed a little bit. And then they told us right away that there was no way we would be making it to our destination the next day. We were actually really excited about it, because we had never been to Reykjavik, so it seemed like a good idea.

 

Al Letson: So a night in Iceland is no big deal for them, and it's supposed to be beautiful, right? But other passengers aren't so happy, like [Doug McCullam 00:21:57] from Chicago, whose also a big soccer fan.

 

[00:22:00]

Doug:

 

I was traveling with a business school friend. We had just graduated in May, and we're going to see the Euro 2016 tournament in France.

 

Al Letson: Doug and his friends had been bumped the day before, so this flight was his second try to get to Paris. Another guy who wasn't too happy ...

 

Andrew: Andrew [Tanker 00:22:19]. I live in Austin, Texas, and I'm in public relations.

 

Al Letson: Andrew asked the Wow gate agent what he can do about the delay. The woman says he can bail out of the trip and get a full refund, but seriously?

 

[00:22:30]

Andrew:

 

We're not going to plan an international trip for months then just cancel it at the airport. We figured, "How long could it possibly be before we get to Paris?" It's a popular destination. We'll be there in no time.

 

Al Letson: So they all get on the plane and fly to Reykjavik, hoping for the best, but Andrew says when they get there ...

 

Andrew: Chaos. It was just pure chaos, because no one had any clue what was going on, where to go, what to do. There was no signage. We were like, "Well do we just get our bags and sleep in the airport? Or, what's going on?"

 

[00:23:00]

Al Letson:

 

They finally find a guy who is supposed to help them get to their hotels.

 

Andrew: So people were like lunging at him, throwing their passports, screaming their names at him, and we're asking him, "Where are these hotels? Like what are we doing? When is the next flight?"

 

He said, "I don't work for Wow. I have no information. I am just here to put you on the shuttle bus."

 

Erin: The next morning we were told to be ready at 4 a.m. at the hotel where I was. But when we were on the bus going to the airport, people started to notice that they were being rebooked, but to Amsterdam.

 

[00:23:30]

Al Letson:

 

You heard that right, Amsterdam. Now, let's recap. The leave Baltimore on Thursday, spend the night in Reykjavik. Then Friday morning, they find out they have to fly to Amsterdam, figuring they'll be put on another flight to Paris. But when they get to Amsterdam, things get worse.

 

Erin: This is when Andrew looses his luggage. Correct, Andrew?

 

Andrew: Yeah. (laughs)

 

[00:24:00]

Erin:

 

No offense, this is when I was willing to totally ditch you, Andrew. I don't know if you remember that, but I was like-

 

Andrew: No, all good.

 

Al Letson: There's a woman at the airport to help them but it turns out she doesn't work for Wow. She works for another company that Wow hired. This is a common way low cost carriers save money.

 

Doug: She was the one that was in charge of escorting us to, what we found out, would be the train station.

 

Al Letson: Yep. The train station. Turns out, Wow has not booked them on a flight to Paris. Instead, they have to take a train. So now they're essentially stranded in Amsterdam. If they want to get to the Euro 2016 in Paris, they have to pay their own way.

 

Andrew: [crosstalk 00:24:38] For a three hour delay to turn into 48 hours?

 

[00:24:30]

Doug:

 

This poor girl. She was very empathetic and apologetic.

 

Al Letson: Erin actually recorded what happened there on her phone.

 

Doug: She's like, "I don't know what to tell you. This is all I know. They told me to take you here. Drop you off and that was it." She was so stressed out that she did start to cry quite a bit.

 

[00:25:00]

Al Letson:

 

In the end, they take the train to Paris. They also filed claims with Wow. It took a long time and a lot of Twitter shaming of Wow, but Doug and Andrew eventually got reimbursed for most of their expenses. Erin did not badger Wow, and six months later, has not received a dime.

 

So after all of this, you guys have gone on an Odyssey, what is that you take away from it? What have you learned?

 

[00:25:30]

Erin:

 

Don't fly Wow.

 

Doug: You know, Wow's tagline is "They leave you with a Wow feeling". And they accomplished their mission. I mean, that is 100% true. We left with a wow feeling.

 

Al Letson: In a statement, Wow admitted to us that everything that could go wrong, went wrong back in June and that the situation could have been handled better. And while, a lot of you listening might say, "Okay, I got it. I'm just not going to fly Wow or other ultra-low cost carriers, like Spirit or Allegiant."

 

[00:26:00] The truth is, these budget airlines are affecting the entire industry, because they are making so much money.

 

Male: If you go and look at the earnings report for an airline like Spirit, you're going to see how much money they are making in ancillary fees. They are wildly profitable. Their shareholders love them, and they are profiting by deception.

 

Al Letson: Is it deception or good business? We get the back story on discount air travel and meet one of the people responsible for all those extra fees airlines are now charging. Yeah, thanks for that. That's next on Reveal. From the Center for Investigative Reporting and PRX.

 

[00:26:30]

Will Evans:

 

Hi, this is reporter Will Evans. I recently investigated problems inside another controversial transportation company, Uber. Former security professionals there told me that Uber allowed thousands of employees to access sensitive customer information. Some employees even helped people stalk their exes or search for trip information on celebrities, like Beyonce.

 

[00:27:00] According to one whistle blower, if you catch a ride with Uber, your personal information is not safe. To find out more, check out my story at RevealNews.org/Uber. THat's U-B-E-R.

 

[00:27:30]

Al Letson:

 

From the Center for Investigative Reporting and PRX. This is Reveal. I'm Al Letson. Air travel meltdowns, like the one we just heard about on Wow Air, don't happen every day, but they are more likely to happen when you're flying low budget, no frills airlines. And the delays aren't the only thing people complain about.

 

Female: Air travel can suck. We get it. You wouldn't believe all the hate Spirit's heard.

 

Male: Spirit wants to be better at explaining how they're different from other airlines. They're just trying to keep airfares low.

 

[00:28:00]

Female:

 

Spirit's all about less money, more go. Some people hate Spirit. Let's help them get it. It's a cheap seat for a cheap ass. (singing)

 

Al Letson: This video was produced by Spirit Airlines, a small low budget airline based in Florida. They know they are the poster child for cheap air travel in America. And they also know that people really hate them. No matter where you look for customer feedback, Spirit is at the bottom of the heap.

 

[00:28:30] Customers complain about Spirit at a higher rate than any other airline, six times higher than other US airlines in 2015 according to the Department of Transportation. So what are they so upset about?

 

Well, the seats are really cramped. More than in one in four flights arrive late. That's one of the worst records in the US. But one of the most vocal complaints is about being nickeled and dimed to death.

 

Female: And I just got charged for my carry-on. Made me pay a wad for no leg room. This guys says he'd rather eat broken glass than fly with Spirit.

 

[00:29:00]

Al Letson:

 

Here's the thing though. As hated as it is, Spirit also makes a ton of money with profit margins that are sky-high. That's why even major carriers are following Spirit's lead, lowering fares and charging extra for stuff that used to be included. So we wanted to know how this all started and what we can do about it, if anything.

 

We asked report, Karen [Pellen 00:29:25], to look into it.

 

Karen: I'd never flown on Spirit Airlines and since I had to travel for this story, I wanted to give it a try. Using Spirit's website, my flight from Portland, Oregon to Los Angeles was listed at $118. But then, clicking through the site, I was first offered hotels or rental cars. No thanks. How about luggage? One carry-on please. Thirty-five bucks. Do I want to pick my seat? Sure, why not? I chose the quote "big front seat", which is basically a large comfy seat like you'd find in first class on any other airline. Twenty-five bucks. Do I want to be able to change my itinerary? Uh, no-

 

  Section 3 of 5          [00:20:00 - 00:30:04]
  Section 4 of 5          [00:30:00 - 00:40:04]
(NOTE: speaker names may be different in each section)

 

Speaker 1: Five bucks. Do I want to be able to change my itinerary? Eh, no. Not for $45 I don't. Check in online for free or at the airport for 10 bucks? That's a no-brainer. Travel insurance for $14? Nope. And lastly, do I want to join Spirit's $9 Fare Club? No.

 

My total? $178. At that point, it wasn't my cheapest option, but I wanted the Spirit experience.

 

[00:30:30]

Speaker 2:

 

Once again ladies and gentlemen, for those of you traveling on Spirit flight 991 with service to Los Angeles ...

 

Speaker 1: A couple weeks later, I'm waiting at my gate to board and I chat with fellow passenger Matt who's been experimenting with Spirit. On his last trip, although Spirit was cheaper than the competition when he first booked the ticket, Matt learned a painful lesson about carry-on bags. They charge more for them at the airport than if you pay ahead of time online.

 

Matt: I didn't realize that I would have to pay an extra, what, $50 to $60. So when I ended up getting dinged for the carry-on, it ended up being considerably more expensive than the alternative would have been.

 

[00:31:00]

Speaker 1:

 

If Matt had tried to sneak on the plane with his carry-on bag without paying at the counter, it would have cost him $100.

 

Ben Baldanza: That $100 bag fee at the gate should probably be $1000. It's not a fee.

 

Speaker 5: Wow.

 

Ben Baldanza: It's a fine.

 

Speaker 1: That's Ben Baldanza, the man who's probably more responsible than anyone for making Spirit the bare-bones airline we know and hate today. He was speaking to students at the University of Chicago in 2015. Ben was CEO of the company from 2006 until last January, but he's still got his hands in the industry, serving on the boards of a couple no-frills airlines, including WOW. Remember them?

 

[00:31:30] But I found him at the head of a smallish classroom at George Mason University in Fairfax, Virginia.

 

Ben Baldanza: All right. Last week, you all got a copy of the Case Three, which is the distribution case. And there's probably some things in there that didn't make perfect sense to you, so I want to talk about that for just a few minutes.

 

[00:32:00]

Speaker 1:

 

In his mid-50s, Professor Baldanza is built like a wrestler, stout and full of energy. He scrawls on a whiteboard in front of about 20 students, teaching a new elective called Airline Economics. And tonight's topic? Frequent flier programs.

 

Ben Baldanza: In 2002, I was the head of marketing for US Airways.

 

Speaker 1: Ben tells the story of how US Airways revamped its frequent flier program. It was just the first of many things over the years that would shape Ben's reputation of being a real, well, jerk.

 

[00:32:30]

Ben Baldanza:

 

You can imagine this didn't go over very well. (laughs) And in fact, what happened is a whole group of customers that were affected by this created sort of an advocacy group. And they called themselves "the cockroaches," because they said that the airline was treating them like cockroaches. And they created an award for me and named me the "2003 Asshole of the Year," and gave me a plaque and I have that plaque.

 

[00:33:00]

Students:

 

(laughing)

 

Speaker 1: Ben's harsh reputation at US Airways followed him to Spirit, where he put in place even more rules we hate like strict no-refund policies or charging for water. Yes, water. It all made Ben the Scrooge of the friendly skies. But back in the classroom, the students love him and they're drinking his Kool-Aid. Here's 19-year-old sophomore Grant Peteres.

 

Grant Peteres: I definitely feel like Spirit being a low-cost carrier is definitely the way forward for the industry because I think consumers really like not having to deal with any of the B.S. extra things that's included when they can just pick and choose what they want and pay extra for it.

 

[00:33:30]

Speaker 1:

 

But paying for those B.S. extra things is what most people hate. Those charges are called ancillary fees and Ben has a much different take.

 

Ben Baldanza: The beautiful thing about ancillary fees, though, is it puts the pricing power in the consumers' hands. You can't as a customer decide what fuel to put in the tanks, what wage am I going to pay the pilots. But you can decide how many bags you take, whether you eat in the airport or bring your own food or buy the airline's food. You can make those decisions. And putting that pricing power in consumers' hands is a very empowering thing, right?

 

[00:34:00]

Speaker 1:

 

Wrong, according to this guy.

 

Chris Elliott: In the airline industry, this is not a free market. This is an oligopoly.

 

Speaker 1: That's consumer advocate Chris Elliott, who says all that decision-making power Ben talks about, all the choices the industry claims we now have, it's misleading.

 

[00:34:30]

Chris Elliott:

 

It's four airlines controlling 80% of all air travel domestically.

 

Speaker 1: He's talking about American, United, Delta, and Southwest. All that consolidation, he says, has given the airlines too much power and they hold consumers over a barrel. Even the big airlines have draconian policies like charging $200 to change a ticket. And then, there's all those other fees.

 

[00:35:00]

Chris Elliott:

 

You have discount airlines that are charging you to carry a bag on the plane. Does anyone out there think that that's not absurd?

 

Speaker 1: Well, last night I had dinner with Ben Baldanza.

 

Chris Elliott: (laughs) How is Ben doing?

 

Speaker 1: He's doing great. He's teaching a class at George Mason University. His students are very enthusiastic about airline economics.

 

Chris Elliott: Oh my gosh. He's going to unleash a whole classroom of them on the world.

 

[00:35:30]

Speaker 1:

 

I found Chris to be rather zen, but on the inside he's raging. He says he does daily breathing exercises to cope with all the negative mojo in his work. For almost 20 years, he's been fighting the airlines on behalf of disgruntled passengers.

 

Chris Elliott: There are people like your parents, like my parents, who don't fly very often. They see a low fair. They assume that it's going to be just like flying on a legacy carrier, or on Southwest, or like flying was before deregulation where everything is included. They show up, your boarding pass costs money to print out. You have to pay for meals. Really, anything that's not nailed down, there's a fee for.

 

[00:36:00] If you go and look at the earnings report for an airline like Spirit, you're gonna see how much money they are making in ancillary fees. They are wildly profitable. The shareholders love them, and they are profiting by deception.

 

[00:36:30]

Speaker 1:

 

"Profiting by deception" is a serious accusation. And those who feel deceived keep Chris Elliott very busy. So I wanted to know, are we getting snookered by the airlines?

 

Chris Elliott: It does seem to be an industry where people sometimes feel deceived.

 

Speaker 1: Industry analyst Seth Kaplan blames a lot of that feeling on how airlines like Spirit rolled out their fee programs. They were desperate to raise revenues and stay afloat and didn't really think it through. In Spirit's case ...

 

[00:37:00]

Seth Kaplan:

 

For a while, if you weren't paying very close attention, if you were booking on their site, you might have thought that you had to pick a seat and pay for that seat assignment or else, who knows, maybe there won't be a seat for you. And that wasn't true. They always would have assigned you a seat when you checked in at no cost. But it wasn't necessarily clear. People did feel deceived.

 

Speaker 1: So how did we get here, to a time when airlines are charging for all this stuff? To answer that, we have to go back to a time when they didn't. It was all included in the price of your ticket. Here's a 1970s commercial featuring sportscaster Vin Scully, the voice of the Dodgers.

 

[00:37:30]

Vin Scully:

 

Of course on Continental, you don't have to stay in your seat all the time to have a good time. You can get up and go into the only coach pub in the sky. In the pub, you can relax with friends, enjoy free popcorn, or play exciting electronic pub-pong games.

 

[00:38:00]

Ben Baldanza:

 

The airports weren't that crowded. The seats in the airplanes were usually quite nice and quite large, and a lot of space.

 

Speaker 1: Ben Baldanza remembers those days. I meet up with him at his modern, palatial in Arlington, Virginia. His two feisty dachshunds curl up beside him on the couch.

 

Ben Baldanza: Larger airplanes may have had a piano bar in the planes.

 

Speaker 1: Really?

 

Ben Baldanza: Yeah, on Pan Am and things like that, that's right. Almost like you might think of a nice cruise ship. People would dress up for flights. You wouldn't see people in shorts and T-shirts.

 

[00:38:30]

Speaker 1:

 

You got a meal, and you could check as many bags as you want.

 

Ben Baldanza: As many bags as you want, yeah, you got fed even on relatively short flights. It was generally a very country-clubbish kind of experience.

 

Speaker 1: But for all that luxury, there were definitely drawbacks.

 

Seth Kaplan: The good ol' days were not so good.

 

Speaker 1: Again, industry analyst Seth Kaplan.

 

Seth Kaplan: Anybody, first of all, who talks about how great things used to be in the 1970s on airplanes is actually revealing that they're one of an elite group of people who could afford to fly at all in the 1970s because most Americans couldn't fly then.

 

[00:39:00]

Speaker 1:

 

It's been said that only 15% of Americans had ever been on a plane in those days. And yeah, it was pricey. For example, in 1977 a round-trip flight on TWA between New York and San Francisco cost $420. In today's money, that's just over 1700 bucks, about two to three times what you can expect to pay these days.

 

[00:39:30] But back in the '70s, even if the airlines wanted to lower fares, they couldn't because the whole industry was regulated by the government.

 

Seth Kaplan: Airlines had no commercial freedom to decide where they would fly or how much they would charge. So something as simple as, "I want to fly from New York to Orlando," they had to go to the government and get permission for that and the government told them how much they could charge. And it actually guaranteed a lot of them a certain level of profitability, but it also lim-

 

  Section 4 of 5          [00:30:00 - 00:40:04]
  Section 5 of 5          [00:40:00 - 00:52:54]
(NOTE: speaker names may be different in each section)

 

Expert: ... a lot of them, a certain level of profitability. But it also limited their ability to grow, quite clearly, and it very much limited the number of people who could fly.

 

Reporter: In 1978 all that changed when the government passed the Airline Deregulation Act. Suddenly, airlines had to make their own decisions about pricing and routes.

 

But, they also had to deal with unexpected things like oil embargoes and recessions, without help from the government. And then, the biggest blow of all, 9/11.

 

[00:40:30] A lot of people just stopped flying. A lot of airlines went bankrupt, liquidated, and merged. Spirit Airlines was teetering on the brink of collapse.

 

But then, in 2006, Ben Baldanza came into the picture as the new CEO. Everybody in the business knew that lowering fares would sell more tickets, but Ben and Spirit figured out the magic formula.

 

[00:41:00]

Ben Baldanza:

 

We're not going to compete for customers based on having a nicer product, or having a more flexible schedule. We're just going to have the lowest fare, dammit! And so, the company started thinking about how can it lower its cost of production, flying the planes more hours per day; say, what's wrong with midnight to 6 a.m.? Looking through every part of the operation to lower costs.

 

At the other side, we said, well why make people pay for things that they're not using? And at the time, we noted that something like only 70% of our passengers even checked a bag, so we said, well the 30% that aren't checking a bag, why are they paying for all the bag infrastructure? We could charge them a lower rate.

 

[00:41:30] And Spirit went through a process over a number of years, of adding ancillary changes and correspondingly lowering the fare.

 

Reporter: Sounds reasonable, when you put it that way.

 

Spirit has offered some screaming deals over the years. If you're lucky, you can find one-way fares for just under 50 bucks, sometimes even 20. And that new model paid off big time.

 

[00:42:00] In just a few years, Spirit went from being an airline that could barely keep the lights on, to one of the most profitable in the world.

 

Now that's not to say they made more total money than the big airlines. They just had higher margins.

 

And those fees are a big part of that. They make up more than 40% of Spirit's total revenue. But as we've said, they also confound people.

 

In the spring of 2010, the Today Show's Matt Lauer asked Ben to please explain Spirit's announcement that it would soon become the first to charge for carry-on bags, something that even today passengers find unbelievable.

 

[00:42:30]

Matt Lauer:

 

Mr. Baldanza, I googled you last night. You know, you are a good businessman; you know the aviation industry, you're a smart guy ... you had to know this was going to go over like a fart in church, pardon the expression, when you announced this. Why do you think this is a good idea?

 

Ben Baldanza: Well, certainly, when you look at just the fee, Matt, on its own, it can cause some outrage ...

 

[00:43:00]

Reporter:

 

It may be outrageous, but it also worked. And Spirit's three-pronged strategy, cutting costs everywhere outside of safety, lowering fares, and charging for all the frills, was contagious.

 

So ultra-low-cost carriers take the first unpopular step. Then, as Matt Lauer noted, the legacy airlines follow suit.

 

Matt Lauer: Snacks used to be free, but on United passengers now pay anywhere from $3 to $9 for a mid-flight treat. Your first checked bag on AirTran will set you back 15 bucks ...

 

[00:43:30]

Reporter:

 

But what about passengers feeling deceived, not knowing about all those extra fees when booking their tickets? It can be especially confusing when booking on third-party websites like Expedia.

 

Well, over the past few years, Spirit has vastly improved its own website, and has, along with other airlines, negotiated terms with those third-party companies to help crystallize their booking policies.

 

Analyst Seth Kaplan:

 

Seth Kaplan: Now it is more clear. They definitely tell you; it's not in real fine print, but it's still not quite as clear as if you booked directly on the airline's site.

 

[00:44:00]

Reporter:

 

So, here's the best advice I can give you: book directly with the airline. When I did that for my Spirit flight, it was very clear what I was paying for, and what I wasn't.

 

But, something you won't see on an airline's website is the fact that ultra-low-cost airlines are tiny. They don't have a lot of planes, they don't partner with other airlines, and they don't fly very often. That means a single delay or cancellation can leave passengers stranded. That's what happened to our friends who flew WOW in Iceland this summer.

 

[00:44:30] Something else about low-cost carriers: a lot of the people you think are their employees, really aren't. They work for another company hired by the airline. This saves money, but it also means that when things go wrong at the airport, there's nobody from the airline to help passengers. Another problem with WOW this summer.

 

[00:45:00] In the years since deregulation, we went from having comfortable, entertaining flights with onboard pubs and video games that almost nobody could afford, to mostly uncomfortable, annoying, and cramped flights that almost anybody can afford. It's been a painful, confusing, and mysterious ride for both airlines and passengers, but here we are.

 

Seth Kaplan says the industry is as stable as it's ever been. But will it last?

 

[00:45:30]

Seth Kaplan:

 

And that's the question, is have they created a more sustainable industry where the boom and bust cycle isn't going to be as extreme as it was in the past. They think they have.

 

Reporter: We'll have to wait for the next big crisis to know if that's true. But there's no doubt that Spirit Airlines and Ben Baldanza made their mark on the industry. And Ben has no regrets.

 

Ben Baldanza: You know, I'm immensely proud of what Spirit built. And Spirit moved the industry in some ways that not everybody's happy about, but it's been better for the industry; the industry is more stable because of that. And I'm very, very proud of that.

 

[00:46:00] All that said, there were very rough times at Spirit. And, we had a good understanding at Spirit, that the airline we were building wasn't necessarily the airline we ourselves would always want to fly. But it was serving a specific demographic in a better way than any other airline was addressing.

 

And we like that fact. We like the fact that were changing the world within our own little space.

 

Al Letson: That story was produced by Karen [Pellet 00:46:43].

 

[00:46:30] Flying is definitely not what it used to be in the old days. Who know it'd be so bare-bones after being so luxurious in the '60s and '70s? The airlines had no idea. The government definitely didn't know what would happen when it deregulated the industry. But as it turns out, there was just one person, just one, who predicted no-frills air travel was heading our way, years, even decades before it became a thing.

 

[00:47:00]

Carol Burnett:

 

Hello, is this Al?

 

Al Letson: This is he.

 

Carol Burnett: Hi dear, it's Carol Burnett calling.

 

Al Letson: My goodness, you just made my entire life by saying that!

 

Yep, that's Carol Burnett. Uh-huh. I got to talk to Carol Burnett! I grew up watching her TV show. Every time it came on, my family sat around the TV and we all watched it. Just like millions of Americans. It was truly an honor to talk to her.

 

[00:47:30] So, back in 1974, when Pan Am and TWA ruled the skies, people actually dressed up to travel by plane. And so, Carol's team thought a lot about that and thought it would be absolutely absurd for people to fly no-frills. So they dreamed up a skit about it.

 

Carol Burnett: I'm the flight attendant, so Harvey is in first class. And Tim comes in and he's going to sit right behind Harvey.

 

[00:48:00]

Tim Conway:

 

Well I guess I'm in the seat right behind you there. I'm in the no-frills section. Yeah.

 

Harvey Korman: Oh is that right?

 

Tim Conway: Save a lot of money going that way, you know.

 

Harvey Korman: Really?

 

Tim Conway: It's like they say, you know, "the back of the plane gets there the same time as the front."

 

Al Letson: That of course is Tim Conway, and the first-class passenger is played by Harvey Korman.

 

Tim Conway: Yeah, you know you save 40 bucks by going this way?

 

Harvey Korman: Yeah.

 

Tim Conway: Of course you don't get any food or anything, that's why I brought this along.

 

[00:48:30] Yeah, you show me an airplane meal that's worth $40. No way. But everything else is the same, so you just--

 

Al Letson: But, just like passengers today find out when they go cheap, it's not the same. At all.

 

First, Conway discovers his overhead bin is crammed with spare parts for the plane, which come crashing down on his head when he pops it open. Then, he notices that his section of the plane has no carpet.

 

Carol Burnett: Excuse me, are you in the no-frills section?

 

Tim Conway: Yes, uh ...

 

Carol Burnett: Well then get your foot off our rug.

 

[00:49:00]

Al Letson:

 

You kick his foot!

 

Carol Burnett: Yeah.

 

Pilot: Stewardesses, please prepare for takeoff.

 

Al Letson: So, Carol checks to make sure the passengers in first class have their seat belts on, but totally ignores the no-frills people.

 

Carol Burnett: Thank you so much.

 

Tim Conway: Oh, miss?

 

Carol Burnett: What?

 

Tim Conway: Uh ... my seat belt isn't fastened.

 

Carol Burnett: So?

 

Tim Conway: Well ... it isn't fastened because I don't have one.

 

[00:49:30]

Carol Burnett:

 

So I toss him a rope. I put a rope around him.

 

Al Letson: It's funny to me that today, like so many years later, we are looking back on a skit that you did that is still relevant today. And I'm curious, like, how do you do that in comedy? How do you make something that can stand the years?

 

Carol Burnett: Well you know something? What we did not do, would be to make everything relevant with what was happening at the time. So we just went for laughs. And I dare anybody to look at "No Frills," and not laugh, and that's over 40 years old, and I get fan mail now from 10-year-olds.

 

[00:50:00]

Al Letson:

 

Wow.

 

Carol Burnett: And I also get letters saying, why can't a lot of the shows be that funny today?

 

Al Letson: That was the great Carol Burnett, who confesses that the skit was her only experience flying no-frills air travel.

 

[00:50:30] And for those of you who are all too familiar with economy flying, check out the skit on the web or on DVD.

 

I have just one last request for you, and then I will let you go. But, would you mind doing the Tarzan yell?

 

Carol Burnett: Oh my god. All right, here we go (yells like Tarzan). I probably scared the hell out of my kitten.

 

Al Letson: Listen. That was amazing. Thank you!

 

[00:51:00] We hope your holiday travels are better than the ones that we've described in this show. And please, please, please ... be nice to your flight attendant.

 

Our show was edited by Taki Telonidis. Karen [Pellen 00:51:23], Emily Harris, and Amy Julia Harris produced today's show.

 

And on things you should be listening to, you gotta check out the Outside Podcast. I love this podcast because it's the exact opposite of me. I have no survival instincts whatsoever. You take me out of the city: done, dead. If there's a zombie apocalypse, my job is to be food.

 

[00:51:30] But, the Outside Podcast is all about that. Remarkable tales of survival, including a recent episode on a diver who spent two days trapped underwater in a shipwreck. I haven't listened to that episode, but I'm going to as soon as I'm done, because, I mean how do you do that? What do you do? I don't know.

 

[00:52:00] That's why you listen to the Outside Podcast. Check it out on iTunes, Stitcher, or wherever else you listen to podcasts.

 

Our sound design team is the Wonder Twins, my man Mr. J-Breezy, Jim Briggs, and Claire C-Note Mullen. They had additional help from Peter [Konheim 00:52:17]. Our head of studio is Christa Scharfenberg. Amy Pyle is our editor-in-chief. Susanne Reber is our executive editor, and our executive producer is Kevin Sullivan.

 

Our theme music is by [Camerado 00:52:28], "Lightning."

 

Support for Reveal is provided by the Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the John S. and James L. Knight Foundation, and the Ethics and Excellence in Journalism Foundation.

 

[00:52:30] Reveal is a co-production of the Center for Investigative Reporting and PRX.

 

I'm Al Letson. And remember, there is always more to the story.

 

  Section 5 of 5          [00:40:00 - 00:52:54]