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
Haven’t you learned anything from all this?
An Airline does not have an absolute right to kick a passenger of off their plane.
[For the millionth time...] Passenger airlines are common carriers meaning that they are required to operate under Federal laws and regulations that, among other things, specifically disallow them from having an absolute right to remove a passenger.
In this case, UAL had procedures they were supposed to follow. These procedures are spelled out in a contract that conforms to federal law. They breached the contract, violating federal law.
One of the big things I’ve learned is that some people just can’t be not insulting. The facts are in United did not break the law. The broke common sense and handled this the worst way possible, but not the law.
It's not an unfettered right, and it's not as though airlines want or need an unfettered right either.
I have yet to read of a case where literally no reason was given. Most of the "removed passengers" in the news are described are unruly, safety hazard, smelly, or otherwise distracting.
There have been a few "removed to make room for more/better revenue" cases in the news. Nader, some retired Illinois supreme court judge, and an aviation lawyer by the name of Stone come to mind. The judge and Stone each got damages in excess of what Rule 25 sets as a maximum. The judge was awarded $7,000 for him and his wife, Stone was awarded $3,100 for him and his daughter.
United admits it owes Dao compensation for kicking him off the flight, so the only remaining argument is over the amount of damages. I doubt United will willingly pay damages for his physical injuries, as it is not the entity that inflicted them.
There was a reason given, they declared the flight overbooked. Now we can quibble on whether it really was, but it’s their plane, if they say it’s got too many people on it it does. People get bumped for that reason all the time, every single day, somebody is probably getting bumped for that reason right now. Most of them don’t throw a temper tantrum about it. And by the time Dao was physically removed he WAS unruly and a safety hazard. That’ll really be the thing that hurts him in court.
You assume that I own United stock - I don’t. My retirement was wiped out by the Obama recession and two resulting lay offs.
Further, your assumption that UAL stock is suffering is incorrect. United is up from ~40 spring/summer last year to about 68 today. That is what, up at least 10% 52 weeks ago, and up 25% plus from 40 weeks ago.
It is the Chicago cops who put the beating on Dao.
...
Did they? I saw an article this morning claiming there’s no evidence of a beating, and that his injuries were an accident.
Yep.
-- And by the time Dao was physically removed he WAS unruly and a safety hazard. That'll really be the thing that hurts him in court. --
Yep. The quibble there (but it goes against the Chicago airport outfit, not United) is what it takes to be "unruly."
I've noticed in the assorted precedents that the airlines are much less friendly in court then they are in the airports. ;-) Dao and his lawyer have an uphill fight on their hands. United will do what it thinks it must to improve PR, but none of that will cause me to think they are a decent carrier. They crap on me every chance I give them, LOL.
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No, the flight was never declared to be over booked.
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Why do you keep holding on to the myth that UAL or any common carrier airline, has an absolute right to remove a passenger?
They do not. Everything they do with passengers must conform to the contract of carriage. Contracts of carriage are required by law and are between passengers and the common carrier airline. The federal law defines the minimum that has to be in the contract. When a common carrier airline violates its contract of carriage, it is violating federal law.
Here, as explained in numerous places on the internet, UAL did not adhere to its contract of carriage. At a minimum, their contract does not allowed UAL to randomly select passengers for involuntary denial of boarding.
Let’s sit together next time we fly, lol.
1. He already paid for a seat.
2. He was already sitting in the seat he already paid for.
Everything else, including the mountain of horse manure in the article posted, is nothing but a huge mountain of horse manure.
1. He already paid for a seat.
2. He was already sitting in the seat he already paid for.
Fine by me. But Dao was asked to exit the plane, and the pretext given was that the plane didn't have enough seats for Dao and the other people the airline wanted to carry. It had some basis for choosing him, presumably he was a "lower priority" passenger, so not selected at random.
And also fine by me, UAL breached its contract and is liable to Dao for damages for not being carried on the flight he had a reserved seat on.
‘And by the time Dao was physically removed he WAS unruly and a safety hazard. That’ll really be the thing that hurts him in court.’
It wont hurt him at all, because Munoz says Dao was never at fault:
UNITED CEO: ‘This can never, will never happen again on a United Airlines flight’
Bob Bryan Apr. 12, 2017, 8:02 AM 42,036
United Airlines CEO Oscar Munoz.AP
UAL United Contl
In an interview with GMA, Munoz said he apologized to the passenger —identified Tuesday as Dr. David Dao — and promised that nothing similar would happen on a United Airlines flight again.
“The first thing that I think is important to say is to apologize to Dr. Dao, his family, the passengers on that flight, our customers, our employees — that is not who our family at United is,” Munoz said. “You saw us at a bad moment, and this can never, will never happen again on a United Airlines flight. That’s my premise, and that’s my promise.”
snip
“No, he can’t be,” Munoz said when asked whether Dao was at fault in any way. “He was a paying passenger sitting on our seat, in our aircraft, and no one should be treated that way.”
Whether he was trespassing remains in dispute. I will respectfully disagree. But, I will defer to opinions of those with greater legal knowledge than myself, and whose opinions happen to agree with mine. (See: when is an airline passenger considered to be trespassing)
Please cite legal opinions that agree with you that he was trespassing.
As Dorf on Law points out, he was not trespassing. He paid for the seat. According to UAL's own CoC, they have no rules concerning removing a passenger due to overbooking. As Dorf also points out, in the absence of such a rule, the airline was in violation of their own CoC by forcibly removing Dao.
Even UAL's own CEO, Munoz says Dao did nothing wrong.
Please cite the law, or section of UAL's CoC in which Dao violated by refusing to deplane.
1) yes the flight was oversold. It became oversold when more passengers need seats than are available.
The dead-heading crew members fly for free, therefore the plain definition of "oversold" refers only to paying customers.
No, actually an oversold condition occurs prior to boarding. In this case, the number of passengers exactly equaled the number of seats. This condition changed when UAL decided (after all the passengers were seated) that it needed paying customers to vacate four seats to make room for dead-heading crew members. (who were flying for free)
But, if you have a source that shows the flight was oversold, according to the definition of UAL's own CoC, please provide it.
2) his being allowed to board is irrelevant
Please show how this is irrelevent.
And any second year law student will point out that there are other ways to "move that flight crew". All of this ultimately comes down to the details of the carriage contract on the ticket. From what I've read of it, UAL doesn't have a leg to stand on. They screwed themselves by not following the contract as stated. Nothing else matters about this entire incident. The passenger may have been an ass, but that doesn't change the contract as it was written, even though the provisions of same where grossly weighted to the carrier's benefit, as are all such contracts.
I’ve always said they have limits. But this doesn’t run into their limits. They decided people needed to be bumped, they offered compensation, that is 100% within their rights, not enough people took the package, they went to lots, also 100% within their rights. He refused, he turned it into a situation that needed security, at that point he moved from being a bumped passenger deserving compensation to a risk passenger that needed to be removed for the safe operating of the plane.
Those are the facts, they were within their rights, he’s a child that screwed up, and you are wrong.
What somebody says in a press conference means nothing. If it gets to court and he’s on the stand THEN it has meaning because then he’s under oath. Press conferences are damage control, people lie in them all the time.
The Supreme Court assessed what must occur to invoke federal admiralty jurisdiction in Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249 (1972).
To most people, getting bumped means you do not get to board. Not being allowed on because of this reason is a common thing.
No, getting on the plane, finding your seat, putting you bag in the overhead, sitting down and then buckling in is pretty much beyond the bumping stage. That’s my argument. He wasn’t bumped as he was already on. They screwed up when they let all the passengers get seated.
If I had made it this far, and they told me I had to now get off without just compensation, I think I would pitch a fit, too. Now, if they offered me more money and a guaranteed flight first thing in the AM plus a nice hotel room and dinner + breakfast, I would probably take the deal. Dao should have negotiated a better deal, rather than make them force him off.
Still, they’ll now wind up paying him a lot of cash. That prediction is not based on emotion, but just where I see this going.
Well, I'm glad to see you finally got around to reading UAL's CoC. Good for you.
The duty of the crew was to accommodate the four airline workers to their next destination. That duty is established by United with regards to accommodating union rules and federal regulations for crews being on flights and their rest times and compliance with FAA directives.
Please cite chapter and verse of both the ALPA MEC rules and FAA directives of this duty for UAL to forcibly remove a passenger so that a flight crew can dead-head on that flight to meet their flight. Please also cite, not only FAA rules concerning rest time, the definition of rest time, but also the rules agreed to in collective bargaining.
Further, federal regulations prohibit two people from occupying the same seat for safety reasons. Thus the doctor was one of four who were identified for involuntary bumping.
So, you're saying that, according to FAA regs, a mother with an infant child cannot occupy one seat?
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