In this situation, shouldn't there have been some form of mandatory auction, where the Airline would have to bid to buy the seat back. Or do what Delta does, and form a contract with the passenger to buy back the ticket for a pre-agreed price?
I do find it shocking that the airport police got involved with what really seems to be a civil, rather than criminal matter, but then again, such are the times.
Airlines should not be allowed to use violence to enforce arbitrary, or even random rules.
Obviously United screwed up and seems like a horrible company, and I think that forcing airlines to more explicitly disclose how flights are overbooked to their customers, including the resolution process seems reasonable.
But police getting involved in non-criminal matters? Not strange in the slightest. It wouldn't be strange at all for someone to call the police about a trespasser or removing a customer that refused to leave (from a bar, restaurant, retail store, and so on).
It's even less shocking since as part of buying a ticket you agree to a contract of carriage (which is a shitty adhesive contract, but that is a separate issue) in which you agree that United has the right to remove you from a flight.
And again, just reiterate, I found the content of the video abhorrent, but making a 1 off rule against airlines seems totally arbitrary. If all other types of businesses are allowed to call the police, why not airlines?
Do police coerce people with violence? Sometimes, yes. But what does that have to do with United. That's an issue with political authority.
The issue is that the guy refused to leave a private space, getting security or police to remove him seems like the solution to that problem in most other contexts. It's a different situation but if someone refused to leave my office they would definitely call the police
If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares. Consider the success of airlines like Ryanair which charges for every possible amenity and slight convenience.
United Airlines has largely been the laggard in the industry in the past 5 years even though their stock price has risen 200%, that is 50% less than their peers like Delta and Alaska Air group who have risen closer to 400% in the same time period. If flying the friendly skies took them into bankruptcy, what could they have done that would've kept them afloat while maintaining a "regulated" carrier status?
The article discusses how the Justice department approved a series of mergers between the major carriers that significantly reduced consumer choice.
It's funny that this "vote with your wallet", "capitalism at work" rhetoric never finds fault with these near-monopolies. You can't have it both ways: either the justice department needs to do its job splitting up big business to preserve competition and consumer choice, or we need to regulate the market so that consumers are treated fairly despite their lack of choice.
I'm not sure this comparison flies. You can say a lot of bad things about Ryanair, but in some respects they treat customers better than many airlines. Yes, they charge for everything, but as a Ryanair customer you expect that. Yes, the Dark Patterns on their website are inexcusable.
At the same time, Ryanair doesn't overbook flights (they claim the hassle costs more than an empty seat). Ryanair has a pretty good on-time track records (partly due to underpromising, but still). Back on topic, Ryanair doesn't violently remove passengers from planes.
Here in Europe we usually have 2 options:
- Fly Ryanair/EasyJet/etc, pay to sneeze, but get from A to B
- Fly BA/KLM/Lufthansa etc, free soda hooray, *maybe* get from A to B
If I go on holiday I'm fine with BA as well. Free booze is nice and I'll survive the free hotel if they overbook me. No need to violently drag me off.
But if I need to be somewhere at a certain time, I'll endure the crammed seats and pick Ryanair without a thought.
like Ryanair which charges for every possible amenity and slight convenience.
We've decided we like price discrimination (why charge every ticketholder for a bag of pretzels when we can charge only those that want it instead?). But we don't like violence or aggression.
I think the "new norm" of low-cast airfare we like is the price discrimination - not the violence.
"
...
According to Bloomberg, four of United's top five shareholders are also top-five holders of American. Three of them are also top-five holders of Delta Air Lines Inc. United's top 10 holders own about 49.8 percent of United Stock between them -- and about 51.6 percent of American and 37.6 percent of Delta.
American was up 3.8 percent yesterday.
...
"
As you can see, boycotting does not necessarily improve things. Just shifts them around a bit.
> If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares.
I think that's not true either; the ability to readily compare fares has led to opacity in pricing by moving a growing and shifting (and inconsistent among carriers) set of services out of the base ticket price into separately charged services.
Interpreting market behavior as revealed preference assumes all the classical ideal market situations, including perfect information, which is particularly silly when the supposed revealed preference is for a status quo with deliberate selective opacity of key information.
This is the thing that always bothers me. By _far_, when (at least US domestic) travelers book flights, their main and often only consideration is ticket price.
People claim to be annoyed by baggage fees, not being able to select their seat ahead of time, no or limited food, paid in-flight entertainment, overselling, etc., but they refuse to vote with their wallets and pay more for better service.
We've made this bed, and now we're apparently pissed that we have to lie in it.
>"If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares."
The consolidation of the airline industry and resulting lack of choices in the US has made voting with your wallets quite ineffective. Airline's have been practicing something called "capacity discipline" that ensures that reduces the number of flights and ensures that planes are always nearly full. Where are you seeing these "ever lower" fares? US airlines are flying fewer flights and certainly fewer direct flights these days in a practice called "capacity discipline" which is designed to make sure the planes are as full as possible. The fares on a fuller flight tend to be more expensive than fares on empty flight.
Also the reason why Ryan Air is so successful is not because they charge for every possible amenity but rather they have the cheapest labor costs in the industry Labor - 6€ per passenger [1]
But we are (I hope) voting with our wallets. We want low fares and decent treatment.
The corps found it easier to lower fares than to achieve decent treatment. They failed to understand our votes.
United is about to learn (when they shut their doors, I hope) that decent treatment was very important all along, and they screwed up badly by neglecting it. They got away with it for a while, but not anymore.
> "For the airlines, the opportunity costs really do add up. Itir Karaesmen Aydin, an American University researcher who has studied overbooking strategies in the airline and hotel industries, puts it this way: If a 100-seat airplane sells $200 tickets, and only 95 percent of passengers show up, the airline loses out on $1,000. (Even if the airline doesn’t refund those tickets, it could have sold five more seats for an extra $1,000.) “The major airlines in the United States fly thousands of flights every day,” Karaesmen Aydin says—even a few empty seats on every flight means losing millions in potential revenue every 24 hours."
This is infuriating to read. Having empty seats is not an "opportunity cost", you sold the damn seats, you made your money, that should be the end of it. It does not cost the airline a single thing to fly with empty seats, other than a blow to unchecked greed. If people don't make the plane they shouldn't get a refund, and I'd imagine that the vast majority do not, so literally the only thing being "lost" is the extra money they had no business making in the first place.
This is a sick symptom of our gone-mad capitalism. I love capitalism, it's done great things for us but the relentless pursuit of growth, profit, year after year straight in the face of reality, morals and common fucking sense is getting comically ridiculous.
To add to that, flying without the passengers who didn't show is cheaper. Every extra kg is a cost in fuel, so passengers not showing up is already a net saving.
That said, I do see the appeal of allowing flexibility in tickets, allowing someone who's missed their flight to catch the next, with no/minimal additional cost. And I recognise that might need practices such as overbooking to accommodate.
Overbooking's been happening for years, on almost all of the airlines. Individuals do inevitably get caught up in, get annoyed/compensated for getting booted from their flight, but for the most part it works.
It breaks down in this extreme situation, where someone literally got beat up in order to ease logistics for an airline.
I don't get the hate for overbooking. If you know 3% of passengers won't show up for whatever reason -- they're late, missed connections, cancelled plans -- it makes sense to sell 103% of capacity and give everybody 3% cheaper fares. This is a good idea. They only thing we need to do is regulate overbooking to make sure that when this probabilistic premise fails, customers are treated fairly and respectfully.
I'm sure if United had offered $2000 for someone to take a different flight, they'd have found takers. The mistake here is poor management of the situation from united and Chicago PD, not overbooking.
Another dumb article focusing in overbooking. Unfortunately, United was given a free pass as most media erroneously attribute this error to overbooking. It was not. They fly was at full capacity, but they didn't overbook clients. They removed a fully seated paying customer, breaking their contract, to accommodate employees. This is not about overbooking, is an illegal removal of a protected paying customer.
At the core doesn't seem to be evilness of capitalist corporations, but rather
a) the economic usefulness of overbooking
b) an uncooperative (ex-)customer (his refusal to leave being unlawful)
c) an unqualified and brutal airport police
d) the disastrous United management resulting in employees unfit to deal with situations like these (diplomacy, authority to up the bump-fee) and a company that didn't understood what kind of PR fallout this situation would bring.
I realize that "overbook" can mean different things but United flight #3411 wasn't oversold to statistically offset no-shows. Instead, the plane had a capacity of 70 seats[1] and United sold all 70 seats to paying customers with zero cancellations. That's a perfect economic situation for United.
What went wrong was 4 extra United employees needed a last-minute ride on that plane to Kentucky. Since this is an HN audience, I guess we could frame it as a massive failure in the "information flow" through their computer reservations system.
The very second that United knew they had 4 employees they had to acccomodate, their computer system should have immediately confirmed those 4 employees on flight #3411 first such that the plane only shows 66 available seats instead of 70. (Computers doing math for the win!) That way, either 4 of the customers get denied a boarding pass at the check-in kiosk, or they get denied at the gate that scans the barcode before they enter the jetway. Instead, United let all 70 passengers board and settle in their seats.
If United insists that their employees take precedence over paying passengers, their damn computer systems need to reflect that reality in the seating database!
All of those opportunities to have the computer system "help" were missed that would have prevented the situation from escalating to a bloody face plastered all over the news.
However, by all accounts (including the statement from Oscar Munoz) is that the Airline Employees needed to board after the customers had already boarded.
The simple matter is that United really doesn't have a policy in place for such an event, but they tried to treat is as an overbooking anyways, which is questionable.
If this had happened before the passenger got on there wouldn't have been much of a story - but United got themselves into a pickle by not having a procedure in place for moving their employees around when the plane was already loaded up and ready to go.
Strictly speaking, refusing to leave was a violation of the airline's rules, but they also didn't really have the right to eject him per their own Contract. You don't surrender all rights when you board a plane, and quite frankly it doesn't seem like United has a lot of ground to stand on when it comes to this particular incident. They didn't have a policy in place and tried to make another one fit, but it was an awkward fit at best.
Incidentally, according to one blog post I read[0], it's not actually so clear that they had the right to remove the customer. Apparently their contract reserves the right to refuse someone boarding if e.g. they are oversold. However, the contract also sets out a much more restricted set of circumstances for when a customer who _has_ boarded can be evicted, and none of those applies here. It seems like under a literal reading (he did board the plane, after all), he had the right to stay on the plane...
> The property rights in this case are clear: the plane belongs to United Airlines, and the passenger’s ticket does not entitle him to a seat on the airplane in a situation like this where he is commanded to give it up due to overbooking.
It is exactly what booking a seat is: buying an entitlement to seat in that plane for that specific flight. Otherwise what's the point? I understand that overbooking can be useful for companies, but in that case they should just buy back the service they oversold. That's how markets work.
Property rights are not everything. What is protected in a market economy is the free transaction between two economic actors. United's property rights of the plane, of course (even though it's likely to be leased, anyway), but also the rights created by the contract between the carrier and the passenger. If you don't protect these rights, you have nothing like a functioning market economy. Capitalism relies on social structures able to protect rights.
I don't see anything compelling there. The only somewhat legal word is "property rights".
It doesn't mention the "common carrier laws" that may be involved here, and likely override any "property rights." I suspect we'll see more enlightened debate soon as aviation attorneys start talking about it.
[+] [-] hackbinary|9 years ago|reply
I do find it shocking that the airport police got involved with what really seems to be a civil, rather than criminal matter, but then again, such are the times.
Airlines should not be allowed to use violence to enforce arbitrary, or even random rules.
[+] [-] jaredklewis|9 years ago|reply
But police getting involved in non-criminal matters? Not strange in the slightest. It wouldn't be strange at all for someone to call the police about a trespasser or removing a customer that refused to leave (from a bar, restaurant, retail store, and so on).
It's even less shocking since as part of buying a ticket you agree to a contract of carriage (which is a shitty adhesive contract, but that is a separate issue) in which you agree that United has the right to remove you from a flight.
And again, just reiterate, I found the content of the video abhorrent, but making a 1 off rule against airlines seems totally arbitrary. If all other types of businesses are allowed to call the police, why not airlines?
Do police coerce people with violence? Sometimes, yes. But what does that have to do with United. That's an issue with political authority.
[+] [-] tdb7893|9 years ago|reply
[+] [-] calbear81|9 years ago|reply
United Airlines has largely been the laggard in the industry in the past 5 years even though their stock price has risen 200%, that is 50% less than their peers like Delta and Alaska Air group who have risen closer to 400% in the same time period. If flying the friendly skies took them into bankruptcy, what could they have done that would've kept them afloat while maintaining a "regulated" carrier status?
[+] [-] oconnore|9 years ago|reply
The article discusses how the Justice department approved a series of mergers between the major carriers that significantly reduced consumer choice.
It's funny that this "vote with your wallet", "capitalism at work" rhetoric never finds fault with these near-monopolies. You can't have it both ways: either the justice department needs to do its job splitting up big business to preserve competition and consumer choice, or we need to regulate the market so that consumers are treated fairly despite their lack of choice.
[+] [-] skrebbel|9 years ago|reply
I'm not sure this comparison flies. You can say a lot of bad things about Ryanair, but in some respects they treat customers better than many airlines. Yes, they charge for everything, but as a Ryanair customer you expect that. Yes, the Dark Patterns on their website are inexcusable.
At the same time, Ryanair doesn't overbook flights (they claim the hassle costs more than an empty seat). Ryanair has a pretty good on-time track records (partly due to underpromising, but still). Back on topic, Ryanair doesn't violently remove passengers from planes.
Here in Europe we usually have 2 options:
If I go on holiday I'm fine with BA as well. Free booze is nice and I'll survive the free hotel if they overbook me. No need to violently drag me off.But if I need to be somewhere at a certain time, I'll endure the crammed seats and pick Ryanair without a thought.
[+] [-] acchow|9 years ago|reply
I think the "new norm" of low-cast airfare we like is the price discrimination - not the violence.
[+] [-] mnglkhn2|9 years ago|reply
" ... According to Bloomberg, four of United's top five shareholders are also top-five holders of American. Three of them are also top-five holders of Delta Air Lines Inc. United's top 10 holders own about 49.8 percent of United Stock between them -- and about 51.6 percent of American and 37.6 percent of Delta. American was up 3.8 percent yesterday. ... "
As you can see, boycotting does not necessarily improve things. Just shifts them around a bit.
[+] [-] dragonwriter|9 years ago|reply
I think that's not true either; the ability to readily compare fares has led to opacity in pricing by moving a growing and shifting (and inconsistent among carriers) set of services out of the base ticket price into separately charged services.
Interpreting market behavior as revealed preference assumes all the classical ideal market situations, including perfect information, which is particularly silly when the supposed revealed preference is for a status quo with deliberate selective opacity of key information.
[+] [-] kelnos|9 years ago|reply
People claim to be annoyed by baggage fees, not being able to select their seat ahead of time, no or limited food, paid in-flight entertainment, overselling, etc., but they refuse to vote with their wallets and pay more for better service.
We've made this bed, and now we're apparently pissed that we have to lie in it.
[+] [-] bogomipz|9 years ago|reply
The consolidation of the airline industry and resulting lack of choices in the US has made voting with your wallets quite ineffective. Airline's have been practicing something called "capacity discipline" that ensures that reduces the number of flights and ensures that planes are always nearly full. Where are you seeing these "ever lower" fares? US airlines are flying fewer flights and certainly fewer direct flights these days in a practice called "capacity discipline" which is designed to make sure the planes are as full as possible. The fares on a fuller flight tend to be more expensive than fares on empty flight.
Also the reason why Ryan Air is so successful is not because they charge for every possible amenity but rather they have the cheapest labor costs in the industry Labor - 6€ per passenger [1]
see the section"Operating Model: Execution":
[1] https://rctom.hbs.org/submission/ryanair-the-lowest-cost-air...
[+] [-] charlieflowers|9 years ago|reply
The corps found it easier to lower fares than to achieve decent treatment. They failed to understand our votes.
United is about to learn (when they shut their doors, I hope) that decent treatment was very important all along, and they screwed up badly by neglecting it. They got away with it for a while, but not anymore.
[+] [-] seanp2k2|9 years ago|reply
[+] [-] FussyZeus|9 years ago|reply
This is infuriating to read. Having empty seats is not an "opportunity cost", you sold the damn seats, you made your money, that should be the end of it. It does not cost the airline a single thing to fly with empty seats, other than a blow to unchecked greed. If people don't make the plane they shouldn't get a refund, and I'd imagine that the vast majority do not, so literally the only thing being "lost" is the extra money they had no business making in the first place.
This is a sick symptom of our gone-mad capitalism. I love capitalism, it's done great things for us but the relentless pursuit of growth, profit, year after year straight in the face of reality, morals and common fucking sense is getting comically ridiculous.
[+] [-] manarth|9 years ago|reply
That said, I do see the appeal of allowing flexibility in tickets, allowing someone who's missed their flight to catch the next, with no/minimal additional cost. And I recognise that might need practices such as overbooking to accommodate.
Overbooking's been happening for years, on almost all of the airlines. Individuals do inevitably get caught up in, get annoyed/compensated for getting booted from their flight, but for the most part it works.
It breaks down in this extreme situation, where someone literally got beat up in order to ease logistics for an airline.
[+] [-] wsxcde|9 years ago|reply
I'm sure if United had offered $2000 for someone to take a different flight, they'd have found takers. The mistake here is poor management of the situation from united and Chicago PD, not overbooking.
[+] [-] ta7000|9 years ago|reply
[+] [-] devy|9 years ago|reply
[1]: https://en.wikipedia.org/wiki/Tim_Wu
[+] [-] devy|9 years ago|reply
[+] [-] woodpanel|9 years ago|reply
At the core doesn't seem to be evilness of capitalist corporations, but rather
a) the economic usefulness of overbooking
b) an uncooperative (ex-)customer (his refusal to leave being unlawful)
c) an unqualified and brutal airport police
d) the disastrous United management resulting in employees unfit to deal with situations like these (diplomacy, authority to up the bump-fee) and a company that didn't understood what kind of PR fallout this situation would bring.
See https://www.jacobinmag.com/2017/04/united-airlines-video-pas... for why United had every right to remove the customer.
[+] [-] jasode|9 years ago|reply
I realize that "overbook" can mean different things but United flight #3411 wasn't oversold to statistically offset no-shows. Instead, the plane had a capacity of 70 seats[1] and United sold all 70 seats to paying customers with zero cancellations. That's a perfect economic situation for United.
What went wrong was 4 extra United employees needed a last-minute ride on that plane to Kentucky. Since this is an HN audience, I guess we could frame it as a massive failure in the "information flow" through their computer reservations system.
The very second that United knew they had 4 employees they had to acccomodate, their computer system should have immediately confirmed those 4 employees on flight #3411 first such that the plane only shows 66 available seats instead of 70. (Computers doing math for the win!) That way, either 4 of the customers get denied a boarding pass at the check-in kiosk, or they get denied at the gate that scans the barcode before they enter the jetway. Instead, United let all 70 passengers board and settle in their seats.
If United insists that their employees take precedence over paying passengers, their damn computer systems need to reflect that reality in the seating database!
All of those opportunities to have the computer system "help" were missed that would have prevented the situation from escalating to a bloody face plastered all over the news.
[1] https://www.seatguru.com/airlines/United_Airlines/United_Air...
[+] [-] csydas|9 years ago|reply
United's own Contract of Carriage uses the term boarding and discusses overbooked flights: https://www.united.com/web/en-US/content/contract-of-carriag...
However, by all accounts (including the statement from Oscar Munoz) is that the Airline Employees needed to board after the customers had already boarded.
The simple matter is that United really doesn't have a policy in place for such an event, but they tried to treat is as an overbooking anyways, which is questionable.
If this had happened before the passenger got on there wouldn't have been much of a story - but United got themselves into a pickle by not having a procedure in place for moving their employees around when the plane was already loaded up and ready to go.
Strictly speaking, refusing to leave was a violation of the airline's rules, but they also didn't really have the right to eject him per their own Contract. You don't surrender all rights when you board a plane, and quite frankly it doesn't seem like United has a lot of ground to stand on when it comes to this particular incident. They didn't have a policy in place and tried to make another one fit, but it was an awkward fit at best.
[+] [-] cryptarch|9 years ago|reply
a) the circumstances did not warrant his removal pre-boarding per the contract and
b) there are no clauses pertaining to post-boarding removal
IANAL so here's my source: https://youtube.com/watch?v=sdtG0WyktMM
[+] [-] vilhelm_s|9 years ago|reply
[0]: http://www.dorfonlaw.org/2017/04/united-airlines-own-contrac...
[+] [-] erispoe|9 years ago|reply
It is exactly what booking a seat is: buying an entitlement to seat in that plane for that specific flight. Otherwise what's the point? I understand that overbooking can be useful for companies, but in that case they should just buy back the service they oversold. That's how markets work.
Property rights are not everything. What is protected in a market economy is the free transaction between two economic actors. United's property rights of the plane, of course (even though it's likely to be leased, anyway), but also the rights created by the contract between the carrier and the passenger. If you don't protect these rights, you have nothing like a functioning market economy. Capitalism relies on social structures able to protect rights.
[+] [-] tyingq|9 years ago|reply
I don't see anything compelling there. The only somewhat legal word is "property rights".
It doesn't mention the "common carrier laws" that may be involved here, and likely override any "property rights." I suspect we'll see more enlightened debate soon as aviation attorneys start talking about it.