Posted on 04/18/2017 11:54:41 AM PDT by SeekAndFind
That the forceful ejection of a United Airlines passenger the Sunday before last proved so newsworthy indicated something that’s largely been ignored by the airline’s myriad critics and “advisers.” What happened was news precisely because it’s so rare.
But for a commentariat prone to turning anecdote into statistic, United’s resort to force when it came to properly removing David Dao (more on this in a bit) from one of its airplanes was naturally (to the chattering class, at least) a sign of a tone-deaf airline; one clueless about customer service thanks to a culture within the airline that doesn’t prioritize it. United’s actions were apparently also a sign that its executives don’t understand the auction process that economists – who’ve almost to a man and woman never run a business – can apparently design in their sleep. Oh please.
Back to reality, we all know why airlines frequently sell more seats than are physically available. They do so because they have a good sense based on years of statistical analysis of roughly how many no-shows there will be for each flight. The major airlines are plainly good at divining the no-show count as evidenced by travel journalist Gary Leff’s stats in USA Today revealing that, “Out of over 600 million passengers boarding major U.S. airlines in 2015, half a million didn’t have seats. Most of those voluntarily gave up their seats.” Leff adds that the latter explains why a mere 46,000 passengers were actually involuntarily denied boarding in 2015, a rate of 0.09%, according to Leff’s calculations. Again, Dao’s ejection was news precisely because what happened almost never does.
Despite this, economists have as mentioned used United’s alleged error to showcase their presumed worth. You see, economists claim to solve problems. Crunching numbers in their cubicles free of the pressures that concern those who actually run businesses, they come up with “solutions” for those businesses.
Case in point is Robert Samuelson, resident economist at the Washington Post. Though he acknowledges that there are lots of public policy problems that “cannot be easily solved,” he contends that “Fixing airline overbooking is not one of them.” Samuelson’s solution is for airlines to consult another economist who has largely spent his adult years contemplating the many great problems businesses face from Harvard’s leafy campus. According to Samuelson, Greg Mankiw has a plan for the airlines. Here it is:
“Make the airlines pay when they overbook. When they do, ‘they should fully bear the consequences. They should be required (by government regulation) to keep raising the offered compensation until they get volunteers to give up their seats," writes Mankiw. "If $800 does not work, then try $1,600 or $8,000.’"
Samuelson adds that the professor in Mankiw is "sure volunteers will appear as the price rises." Samuelson agrees with the professor, but would “tweak” his proposed imposition of force on businesses “by requiring that all the bumped passengers receive the highest payment.”
Of course the problem for Samuelson and Mankiw, along with countless other economists awoken by United’s alleged error, is that airlines have long been doing what they propose. We know this because airlines regularly oversell flights, only for them to offer rising rates of compensation to reserved passengers assuming they don’t have enough seats. Sorry economists, airlines have long employed the auction process that has oddly given your profession its day in the sun.
As for the proposed regulations offered up by economists mostly untouched by the real world, they’re passing strange simply because economists generally pay lip service to the truism that there’s no such thing as a “free good.” But in demanding federal compensation rules as Samuelson, Mankiw et al are, they act as though the compensation will be paid by 'someone else.' Back to reality, assuming the federal imposition of highly generous compensation for bumped passengers, this will reveal itself either through reduced seat availability for consumers, much higher prices for the consumers in search of low-priced fares, or both. Well-heeled economists presumably don’t consider this truth simply because their air travel is likely not of the supersaver variety.
Regarding Dao, it’s well known at this point that the flight he’d booked a ticket for wasn’t oversold as much as United wanted to transport four crew members to Kentucky in order to staff a flight the next day. So that the airline could serve many more passengers, it bumped Dao, along with three other willing customers. And while PR mavens can fight among themselves about the brand implications of United’s actions vis-à-vis Dao, it’s worth pointing out that the airline did the right thing in removing the obnoxious passenger from the plane.
Lest we forget, a purchase of an airline ticket, particularly a supersaver ticket, is not a guaranteed reservation in the traditional, contract sense. A supersaver ticket is low-priced precisely because such a fare might be bumped – albeit rarely – based on a lack of seats. In Dao’s case he didn’t have a reservation as much as he’d booked the strong possibility of flying when he wanted to. United was correct in removing him much as any business would be correct in removing from its premises any individual engaged in the act of taking. The seat was United’s to allocate, not something owned by Dao.
About this, readers can rest assured that United’s most frequent passengers, as in the ones that generate the most revenue for the airline, are the least likely to be bumped. For members of the commentariat to defend Dao’s right to a seat is for those same members to reject the property rights of businesses. Federal regulations imposed on businesses regularly ignore property rights, and because they do costs for their customers rise to reflect government disdain for property.
The economist in Samuelson concludes that “Making airlines pay more for overbooking would, almost certainly, make them more careful in their scheduling, while also more adequately compensating inconvenienced passengers.” It’s a nice thought from the offices of the Washington Post, but if it’s so simple as Samuelson suggests, why the need for governmental force? Samuelson never considered the latter, and realistically didn’t consider business and economic realities much at all in penning his piece in which he explained to the airlines how they should operate, sans irony.
But for-profit businesses don’t need the help of economists largely unfamiliar with business or profits. As evidenced by how airlines regularly and seamlessly handle the good, pro-consumer strategy of overbooking, they’re already well aware of how to handle passenger overflow. The problem isn’t the airlines, but an economics commentariat ever eager to turn what’s singular into a statistic.
-- John Tamny is editor of RealClearMarkets, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading
This author is an A hole of the highest ranking. First of all, I am fed up with the false narrative of the oversold flight. Bee Ess!!! We’ve been over this a million times - the flight had enough seats for the boarded passengers until the airline decided to stuff its employees on this already full flight. Then had the gall to involuntarily “volunteer” people to give up their seat and use a police state to enforce their shitty customer service.
I realize the flying public can be entitled, disrespectful jerks, but let’s not forget this industry also treats its paying customers worse than any other. If I show up at Wal-Mary to purchase an advertised sale item only to find it is sold out, no harm no foul. But to pay several hundred dollars or more for a plane ticket AND make travel arrangements around thaybscheidled flight only to have it yanked out from under you is just plain wrong. These airlines SUCK and it’s high time the entire industry gets an overhaul.
The goons called by United didn’t have the authority to arrest anybody. They’re just part of the Chicago-Democrat culture of corruption.
United, just give the guy a blank check and be done with this. having to resort to the use of physical force to remove folks ain’t the way to run an airline.. unless you want it to auger in. I miss Continental, I won’t miss United.
I think this is the better way to handle it.
That statement proves that you did not see the video or you are on the passenger's side no matter what the facts are.
Dao beat him self by twisting and making sure he drew blood by hitting as many seat supports as he could as he was dragged from the airplane cabin. Would you have acted as Dao did in this, “CASE?”
This case has nothing to do with over booking, selling the same seat twice, but rather removing someone, to make room for an airline worker. It is about using the force of the government to remove a passenger who paid for his seat five months earlier. United could buy back a seat it needed if it offered the right price.
Just a nitpick, the drivers to UAL/Republic were likely union rules, "in service" regulations, and the consequences of not having a rested crew in Louisville the next morning. No doubt UAL had many other options, considering the number of airports and crew in service around the nation.
Ultimately the choice was a business decision, and likely a reasonable one, or if not reasonable, at least "the common practice" of offering up to the amount due for an involuntary denial, and stopping the bidding there.
No they was not right, they may have done what they thought was totally legal but they was not right even if the guy ended up being a idiot. He paid for his ticket, offer enough money and someone will volunteer to mess up their weekend.
There are several questions which, as far as I can tell, have not been asked:
- This crew that had to get to St. Louis...was it the only crew in existence that could have staffed that flight?
- No crew available in St. Louis Area?
-No crew available in an area where flights to St. Louis weren’t booked, like Dallas, KC, Minneapolis, etc.
And if this was indeed the only set of four people on planet earth who could staff the flight:
- Why did they arrive so late to the flight, after the passengers had boarded
- Is last minute boarding by such crews standard policy
- Could they at least have called ahead, before they plane was boarded, to warn the crew they were on their way
- Was this the last UAL flight of the day
- Did any other airlines have flights going to St. Louis that day
Final question:
- Why has this never happened before. What unusual circumstance and screw up precipitated this situation.
If a passenger is a no-show and not a cancellation, they don’t get their money back, right? So the airline already has collected for a full flight.
Trespass, interfering with a flight crew, failure to obey a lawful order.
Nobody read Dao his rights. No one threatened him with arrest. Munoz, CEO of United, said Dao was not in any way at fault.
“A VA employee beat an old Veteran to death and that didn’t get 1/10th the attention this has.”
Probably because no video was uploaded to youtube within hours of the beating.
How about a link to that video?
I've seen no such thing.
Tell that to the aviation cops, whose agency has already thrown them under the bus =>
“The incident on United flight 3411 was not in accordance with our standard operating procedure and the actions of the aviation security officer are obviously not condoned,” [Chicago] Aviation Department spokeswoman Karen Pride said. “That officer has been placed on leave effective today pending a thorough review of the situation."
http://chicago.suntimes.com/news/video-appears-to-show-passenger-being-removed-from-united-flight/
2 more were placed on leave since this statement. They're so hosed.
1200 families would move into the 1000 units, of course.
There is a good piece of boilerplate on the general subject of overbooking in the DOt consent orders vs. airlines. By way of example, JetBlue Airways - Consent Order 2016-12-4
” Dao’s lawsuit against United will ... devolve to the details of the carriage contract on the ticket. “
The Contract is Carriage is not on the ticket. It consists of 30 rules and even one rule couldn’t fit on the ticket.
https://www.united.com/web/en-US/content/contract-of-carriage.aspx
You are correct. That is why I called out the difference of what LEO “could” have done.
You are so right. The airlines want your dollars but act as if you are a nuisance they have to put up with. Common courtesy by the airlines went away a long time ago.
He was not trespassing. He paid for the seat he was sitting in. He was allowed to board the airplane and was not in violation of UAL's Contract of Carriage.
He did not interfere with the flight crew. He merely stated he was not going to deplane because the flight crew had no rights under the CoC to remove him from the flight. (See: RULE 21 REFUSAL OF TRANSPORT)
The section on RULE 25 DENIED BOARDING COMPENSATION does not apply because that section deals with denying boarding to a passenger due to oversold conditions.
A) the flight was not oversold.
B) He was allowed to board and was already in his seat.
...failure to obey a lawful order.
What lawful order was given?
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