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
Educate yourself. The airport security goon squad United tasked with putting the old man in the hospital cannot make arrests. They can’t carry guns. They’re just a byproduct of Mayor Daley’s monumental corruption.
People should be able to book flights at their convenience in the future. United has vowed to end several practices that virtually guaranteed screw ups.
“The airport security goon squad United tasked with putting the old man in the hospital cannot make arrests. They can’t carry guns.”
Only a child such as yourself equates carrying guns with the right to arrest.
Smh. You’re the only one equating the two. In fact, the goon squad is not by law permitted to make arrests. (Citizens arrest would be different; the goon squad is not, however, permitted to make official arrests.)
Also, they aren’t allowed to carry guns. If, as some have recklessly suggested, that rule were to be changed, the goon squad still couldn’t make arrests. They are not police officers.
Okay.
” In fact, the goon squad is not by law permitted to make arrests. “
They are State certified police officers and may take people into custody. They have the same authority while on airport property as the Chicago Police Department. They are even listed on arrest records as the arresting officer.
The ONLY difference between an ASO/APO and a CDP officer is that they are not armed due to concerns with public safety of firearms around aircraft.
You really shouldn’t get your information from other children on the Internet.
P.S. ASO/APO are firearms qualified by the State and federal government; they just don’t carry.
United Airlines Was Right, and Its Numerous Critics Wrong
This will be settled in court and the frustrations of the flying public will severely punish the pompous asses that run airlines today.
“flying public will severely punish the pompous asses that run airlines today.”
You mean the flying public that stands in long lines to get strip searched by the TSA? THAT flying public with such obedience to their morals and views???
You mean the flying public that stands in long lines to get strip searched by the TSA? THAT flying public with such obedience to their morals and views???
Yes those that are charged exorbitant prices to be herded like cattle and then treated like a terrorist.
You are wrong.
Wrong.
Wrong.
“Aviation police must meet the same minimum standards as other local cops, according to a city website. That includes passing fitness testing and psychological examinations. Aviation officers can “temporarily detain and take people into custody until Chicago police arrives,” said city spokeswoman Jennifer Martinez. But only Chicago police can file an arrest report, she said. Some training and qualification standards for Chicago police go beyond the state’s minimum standards, and it is unclear what the Aviation Department requires of officers beyond the minimum.”
http://www.chicagotribune.com/news/ct-united-chicago-aviation-police-met-20170413-story.html
“they just don’t carry.”
Let me clear up your confusion.
They CAN’T carry.
“They cannot carry weapons but must be state-certified police officers. Airport police have sought for years to be allowed to carry firearms, but the city has opposed that. Aviation Committee Chairman Ald. Michael Zalewski, 23rd, said the latest incident weakens the push by aviation police to carry guns.”
http://www.chicagotribune.com/news/ct-united-chicago-aviation-police-met-20170413-story.html
Yup. What has astonished me is the number of knee-jerk reactionaries we have on the ‘right’. I thought the left had cornered that market.
“I would obey the law and leave the plane.
I respect private property”
+1000. Apparently there are a lot of people who think that protesting and throwing a tantrum on board a plane is the way to go.
When this type of behavior is rewarded, expect a lot more of it to occur.
“Could you please stow your bag, sir...” FU, mind your own business. etc.
It will be a freak show free for all....chaos, delays,& increased costs. Brought to you by neo-jerk reactionary yentas with iphones and fakebook accounts
You should consider researching the difference between private property and a Common Carrier. The lawyers who are going to take United to the cleaners know the rules and regulations pertaining to Common Carriers. Most amti-Dao posters, not so much.
Throw that all out the window for a minute...Dao was asked by the flight crew to leave the plane. He refused.
Let’s say the reason he was asked to leave was because there was a bomb on board. Would you still support his actions to remain seated and throw a tantrum?
If passengers can defy requests by the flight crew, what does that portend for order and safety on future flights?
When you have to totally distort the facts to make your case, you have no case. The dishonest, thuggish United rep was *supposed* to be looking for “volunteers.” A couple had already expressed interest in the offer, but they wanted a few hundred dollars more.
You see, I can argue the actual facts; I don’t need to change everything to make the point.
Had the airline been operating professionally and in good faith, they’d have negotiated with the willing couple. Instead, they laughed in their faces and proceeded to put Dao in the hospital.
This is where the rules of the Common Carrier come into play. United had an active and legal responsibility to safeguard the health and well-being of their passengers. They must not, by the regulations which govern Common Carriers, act in such a way as to put the lives or health of their passengers at risk. They violated that most basic of rules, and now they will pay...and pay...and pay.
As well they should.
Meanwhile, United continues to get bad publicity, and fun with words by the public like the following:
New United Airlines ad campaign slogans:
1. “Drag and Drop”
2. “We put the ‘hospital’ in hospitality”
3. “Board as a doctor, leave as a patient”
4. “Our prices can’t be beaten, but our passengers can”
5. “We have First Class, Business Class and No Class”
6. “Not enough seating, prepare for a beating”
7. “We treat you like we treat your luggage”
8. “We beat the customer - Not the competition”
9. “And you thought leg room was an issue”
10. “Where voluntary is mandatory”
11. “Fight or flight. We decide”
12. “Now offering one free carry-off”
13. “Beating random customers since 2017”
14. “If our staff needs a seat, we’ll drag you out by your feet”
15. “A bloody good airline”
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