American ordered to pay delay fine

American Airlines Group was ordered to pay a $4.1 million fine, the largest such penalty to date, for allowing aircraft to sit on the ground for three hours or more without giving passengers a chance to exit.

The U.S. Transportation Department on Monday said the action was part of an increase in enforcement starting last year after Secretary Pete Buttigieg began denouncing carriers for causing lengthy delays and canceling flights.

“This is the latest action in our continued drive to enforce the rights of airline passengers,” Buttigieg said in a statement.

“Whether the issue is extreme tarmac delays or problems getting refunds, DOT will continue to protect consumers and hold airlines accountable.”

U.S. law prohibits domestic flights from sitting on airport tarmacs for more than three hours without pulling planes back to gates to allow people to disembark.

The DOT alleged that American violated the rules on 43 domestic flights between 2018 and 2021. A total of 5,821 passengers were aboard the flights, the agency said.

American said in an emailed statement that it has made improvements to its flight-planning system to prevent planes from stacking up at airports during extreme weather.

“American always strives to deliver a positive travel experience to our customers and takes very seriously our responsibility to comply with all Department of Transportation requirements,” the airline said.

Half of the penalty, $2.05 million, will be used to compensate passengers who were on the delayed flights, the DOT said.

Most of the delays occurred at one of American’s main hubs, Dallas-Fort Worth International.

On one of the 43 flights, passengers were not provided food and water, which is also required in the law, the agency said.

Buttigieg has been a vocal critic of the airline industry as it rebounds from the Covid-19 pandemic.

The DOT earlier this year began the creation of new regulations increasing the compensation passengers would receive for airline-caused delays and cancellation.

It also created a website showing consumers each airlines’ consumer policies.

Data week starts with rise for stocks, while bonds fall

Stocks rose and bond yields fell at the start of a week full of economic data that will help shape the outlook for Federal Reserve policy.

In a reasonably quiet trading session, the S&P 500 hovered near 4,400.

3M rallied as Bloomberg News reported a tentative agreement to pay over $5.5 billion to resolve lawsuits claiming it sold defective combat earplugs. Nvidia led gains in megacaps.

Auctions of two- and five-year Treasuries drew the highest yields since before the 2008 financial crisis.

August’s risk-off mood showed some signs of abating, but the U.S. equity benchmark is still poised for its worst month of 2023 after a higher-for-longer rates narrative took hold.

Fed Chair Jerome Powell stuck to the script in his Jackson Hole speech Friday, saying officials are “prepared to raise rates further if appropriate,” while stressing the central bank would “proceed carefully” – guided by economic data.

Traders want to see economic figures that suggest activity is slowing enough to keep further rate hikes at bay, but not too slow to indicate the U.S. is headed for a recession, according to Anthony Saglimbene, chief market strategist at Ameriprise.

Given that the earnings season is in the rearview mirror, and the next Fed gathering is weeks away, incoming data will likely take center stage for a while, he added.

“This week is important because it has the chance to either reinforce the ‘soft/no landing’ and ‘disinflation’ pillars of the rally, or potentially undermine them,” said Tom Essaye, founder of The Sevens Report newsletter. “The former will likely result in a reflex rally, while the latter could open up a sharp drop in stocks. We’ll be watching closely.”

Employment growth in the U.S. probably cooled and wage increases moderated, suggesting a further tempering of inflation risks that reduces the urgency for another rate hike.

Other labor-market figures are seen showing fewer job openings than a month earlier, indicating supply and demand are coming into balance.

From wire reports