The world is aghast at the passenger who was dragged off a United flight by airport police on Sunday night. And rightly so. It’s big news because things like this rarely happen, but they sure feel like they could happen to most any of us who travel. No one wants to be put in that position.
Here, everything failed.
- United’s regional airline partner had an operational problem (as did many airlines over a several day period). They didn’t have crew available to work a flight back from Louisville to Chicago. So they decided to put a crew onto this flight and bump 4 passengers.
- This made some sense — inconvenience four passengers to avoid having to cancel a whole flight full of passengers in the morning, and possible even further flights that would use the same aircraft.
- But there were no takers for involuntary denied boarding compensation of $800 in travel credit plus a hotel night.
- Since the airline isn’t required to pay more than 4 times the one way fare, capped at $1350, for involuntarily bumping passengers that’s what they did next. It’s standard procedure not just at United, and it’s what the gate agent following procedures was supposed to do.
- The doctor, who was one of the passengers chosen, refused to get off. United called the airport police. He wouldn’t budge, and he was dragged off the plane.
United’s livery of my youth. By Torsten Maiwald, GFDL 1.2, via Wikimedia Commons
This was a terrible incident, with several failures along the way. (This Atlantic piece citing my post arguing the airport police sympathizes with both passenger and gate agent.)
Most people have focused on United being unwilling to pay more compensation to get passengers to volunteer. As long as the government caps the amount the airline has to pay, at the same time limiting customers’ ability to sue airlines for most anything beyond explicit breaches of their contracts of carriage, we aren’t likely to see more compensation.
Instead if United had just decided to stick it to passengers already in Louisville and cancel their flight no one would have been the wiser. Plenty of people would have missed important business meetings and urgent life events, but it would have been just a cancelled flight and not a defining cultural moment.
Airlines are too quick to call the cops on customers, customer service challenges — arguing with an airline employee — has become a risky proposition with law enforcement involved in our post-9/11 world. That has to change, and United CEO Oscar Munoz — after initially bungling the airline’s response — now says that it will. At least, the airline won’t call the cops on customers with valid boarding passes for a flight.
What will they do instead if a passenger refuses to give up their seat in a similar involuntary denied boarding situation? Involuntary denied boarding is already rare (down about 75% since deregulation), and bumping passengers after they’re seated is rarer still. But if it comes up again, a passenger is asked to leave the plane, and they don’t… the airline is likely to simply cancel the flight.
Had they done that they would have avoided the media firestorm, and they would not have even paid out each passenger involuntary denied boarding compensation.
- United’s contract of carriage says they won’t even provide a hotel to passengers when a flight cancellation is “due to circumstances outside UA’s control.”
- They provide snacks and meals only “in the event of an extensive delay caused by UA”
You might argue that the situation was within United’s control because they could have offered more denied boarding compensation.
You might even argue that by cancelling the flight United involuntarily denied boarding to everyone. These would be novel arguments that, given recent media attention, could even get a positive hearing before Elaine Chao’s Department of Transportation. Or not.
Airlines need overbooking, as Matthew Yglesias explains in a Vox piece that cites my writing on the United incident,
The economic case for it is, however, fairly ironclad. It’s simply not that uncommon for a ticketed passenger to not show up for a flight due to illness or some external change of plans. Customers also value the opportunity to reschedule flights for less than the full price of buying a brand new ticket. Meanwhile, the profit-maximizing strategy for first-class seats is generally to price them so high that they don’t sell out, and then offer a few lucky passengers free upgrades — immediately freeing up space in apparently overbooked economy cabins — as a privilege of their advanced frequent flier status.
An airline could, of course, refuse to overbook as a matter of policy. This would result in flying planes that were substantially less full, on average, without meaningfully reducing operating costs. Ticket prices would need to be higher as a result. No airline has seen this as a winning strategy in the marketplace, and regulators haven’t tried to impose it on them.
Given the PR risk in confronting a passenger, airlines are more likely to take operationally costly measures to prevent a situation like the doctor being dragged off the plane. That means pricier tickets over time, too — and as Tyler Cowen explains “[t]he more you complain, the more you are redistributing wealth — through the medium of preferred price-quality configurations — away from lower earners and toward the wealthy.”
Airlines are less likely to increase compensation payments unless DOT guidelines and liability shields change (both of which also would ceteris paribus raise price). And I’m not confident we can reverse the paranoid security state where customers disagreeing with an employee aren’t placed in legal jeopardy by police — except perhaps in the narrow case of a passenger with a confirmed seat that has boarded a plane and who is asked to leave.
In other words, I’m afraid things really won’t get better.
If I were in charge of policy, I’d acquiesce to those who are adamant about flying. Keep going down the IDB list. You’ll eventually find someone who is not so adamant, and will take the compensation.
if they offer 400 voucher and over sell never flight, i am sure they can get people.
if they offer 400 voucher to an alternatr airport, and taxi back on the same night. they can get people.
the problem is the alternate is 22 hrs later .
i did VDB long time ago by going to alternatr airport and intended to pay my own bus ride back.
So is the maximum compensation amount determined by a United policy or FAA rule?
Raise it!! Everyone has a price.
Oh and also legislation should force IDB payouts to be on the order of $10,000, not $1,000. And it should be a wire transfer into my bank account — not a voucher.
Would this law raise price, ceteris paribus (only an economist, eh)? Yes. Would it raise price by much? No, given the rare incidence of IDB.
I don’t follow? What would they have to gain by cancelling the flight?
My fear is that the backlash from this incident may embolden seat poachers. Let’s say you’re assigned aisle seat 9C and when you get to your seat a dude is sitting there and says “Oh I’m sitting next to my friend/wife here you can have my seat 28B.” He refuses to move; you call the flight attendant.
What is she going to do? Will she still have the guts to call the police to have him removed from the plane? Will the police have the guts to remove him? Or will she tell you to just take his seat?
I don’t want to fly in a world where airlines won’t remove unruly passengers or those who don’t follow legitimate commands.
I don’t understand why it was so important for United to get the crew on this particular flight. As you noted days ago, a car service could take them to Chicago for far less than what they were giving out in compensation for the VDBs or IDBs. Is it in the pilot contract that they have to fly under these circumstances?
UAL failed Econ 101, they have no price takers @ $800 so they went with the Mob. The involuntary DB compensation should based on the average fare or even the highest fare.
They(UA/republic) had total control they screwed it up.
#oscarneedstogo
@Ted max liability for IDB compensation is set by DOT, and your ability to sue an airline is limited
@Jason at 10k per there wouldn’t have been any IDBs on this flight, they wouldn’t have sent crew on to Louisville. Is that better or worse [the police response that made this go viral aside]? I don’t know that I know.
@MichaelP – the most United is liable for is set by DOT. United could pay more than they legally have to.
@ Daniel – exactly my question. Your logic doesn’t make sense to me Gary. I have to imagine the costs of “reaccomodating” 100+ passengers would have to exceed the costs of increasing a voucher to $1500.
@jphripjah – What he said. “No one’s making me move. Just try it.”
@jphripjah : i had similar thoughts.
the lesson that many will get, but TOO COWARD to admit in public, is that whenever you can’t get your way, regardless of what the policy and law says, and regardless of your own behavior, just kick and scream like a 3 year old baby, then the public will BLINDLY rally behind you against the “evil corporation”, and win millions in the settlement lawsuit.
“I don’t want to fly in a world where airlines won’t remove unruly passengers or those who don’t follow legitimate commands.”
perfectly well said. i can GUARANTEE you this behavior will get more often, and fearing PR backlash, the corporations will simply bend all rules regulations and logic just to shut those losers up.
and the sad thing is that most of those holier-than-thou losers screaming for justice on the internet yet haven’t done a SINGLE thing about Syrian refugees throughout this incident are the one religious ones. but that’s not unexpected because they’re so incapable so independent thought they’ve allowed someone else to brainwash them using religious propaganda.
@jphripjah @Patrick — Most passengers are not such massive d-bags, but those who are could be told that if they didn’t move their mileage balance would be zeroed out and they would be banned from the airline
The problem is that the law is anti-consumer.
Here in Australia, if you over-sell a product – including an airline ticket – you break the law. It is theft to sell something that you have already sold to someone else.
So Qantas, Virgin, Jetstar and Tiger executives would risk a criminal conviction by doing what United did – they would be viewed by the law exactly as OJ Simpson was when he used force in Las Vegas to try to recover his former possessions.
The law in the USA is an ass if it allows a vendor to use law enforcement to try to recoup a product that it has already sold and should no longer own.
@Fernando – Yes – Union contract states crew has to fly. Besides, they needed to work in the morning. Driving wouldn’t have gotten them there fast enough to have the required crew rest time.
Now for the passengers that were kicked off, they could have given them a car service. But that is not required by the rules, they just have to be accomodated on the next available flight. I have been bused by an airline when the entire flight cancelled but that was for a short distance.
@DavidF – one exception to the rule you describe is fractional reserve banking. A bank takes in a deposit, it loans out the money, now you have more than one customer entitled to the same money 🙂
So, the argument is that an airline will take the extremely operationally costly option of canceling the flight entirely rather than the marginally operationally costly option of increasing offered compensation?
I’m somewhat skeptical
To be precise, United failed to offer even $1 of financial compensation.
They could have offered up to $1350 in cash.
They instead offered only highly restrictive vouchers which could only be redeemed on themselves and required travel within 365 days in a country – the USA – which is notorious for its people having less than half as much time off each year than people in any other advanced country.
Which is rather like a rapist saying that the only compensation for his victim is a Night with him. Redeemable within seven days.
Just a few things….
I thought the crew they sent (as “must carry” by the airline and the F/A contract resulting in the need for volunteers) was supposed to work SDF-EWR not SDF-ORD. The only way UA could be certain that the crew makes it there in time to get their mandated FAA rest is to fly the crew themselves. If they rely on another method to transport, there’s risk involved that they don’t make it in time.
Second, the voluntary was maxed out at $800 before they went to designating the IDBs. Could they have raised the compensation? Yes. Are you absolutely sure someone would take it? No. They were trying to get the flight out and didn’t expect a passenger to resist. How long should the “auction” take place before getting to IDB? Again, the crew that was being put on the flight had a mandatory rest period that needed to be met.
Honestly, I think they made the right decision factoring in that if the crew doesn’t make it on Sunday night in time to get their rest a Monday flight goes out delayed significantly or cancelled. Based on my Monday UA flights, they’re packed and people would be pissed. Better to piss off four than 70.
Why do you insist on mentioning the max compensation set by law? The reality is united never even tried to offer the max compensation and resorted to the police and violence all to save a few bucks. They could have done more to avoid this and they elected not to.
In the case of a no-show, doesn’t that customer forfeit the money paid for the ticket? How then would that empty seat trigger a cost to the airline? (Unless you count the lost opportunities of gouging the passenger with other fees.) I’m genuinely asking.
i support another solution – give into the demands of the unruly passenger just to avoid PR storm (since losers blindly rally behind the “victim” anyway), then secretly place him/her onto a perpetual no-fly ban list.
this incident is eerily similar to the mcdonalds loser who doesn’t know that coffee is hot and won how many millions or billions ?
One thing that I don’t see mentioned anywhere is why United didn’t know that they needed to get crew to Louisville until minutes before push-back? After all passengers had already boarded and were seated?
That screams scheduling incompetence to me.
If they had known that they would have to bump four passengers before boarding, they would have avoided this scenario. Stopping someone from boarding a plane is very different than hauling them out of their seat.
Gary you have done a good job of pointing out what regulation needs to change. If an airline cancels a flight or IDBs someone they should have to pay the walkup full fare for the route so the passengers can walk up to a competitors flight and buy a ticket. Problem solved.
As this would mean a large number of people buying last minute walk up fares all airlines would keep a few seats free rather than oversell and VDBs and IDBs would not be needed anymore and there would always be place to put in an operational must fly crew.
Gary’s argument is valid in general but interestingly, not in this case. Here cancelling the flight would have served no purpose. You have to reaccommodate the people on the flight and the crew then still don’t get where they need to go. Better off just not having the crew go and cancel the morning flight. Gary’s logic would have them cancel both flights.
Now, the next time an airline has this type of situation where the plane is boarded due to straight oversell and cannot get enough volunteers, you could see them cancelling the flight. Just say we missed our tax off window due to capacity issue and now we are done. as long as no police are involved it all works out fine for airline
IDB just should not be a thing that exists. if overbooking (parsing words about whether or not bumping passengers for airline employees counts as “overbooking” notwithstanding) helps your bottom line in the long run, so be it and feel free. on the rare (so rare! seriously, look at the numbers, this like never-ever happens!) occasions that you have more butts than seats, you pay enough to make some people VDBs.
@Gary
I understand the max IDB is set by the DOT, but I piece that is too low … need to adjust to the 4x the average fare or highest fare.
The airlines have too much power. If that guy just got up and walked away, how much additional compensation do you think he will get?
Everyone should use their seat as Leverage to get more $$.
@henry LAX: A quick Google search will show you there was a lot more to the McDonalds case than a “loser who doesn’t know that coffee is hot”.
I predict they will offer up to $1500. More than IDB, but not so much more that it would make a difference in the bottom line, but huge improvement in customer opinion
@ted
there is no “max” IDB amount. United can offer whatever they want. $1350 is in fact the opposite of a maximum, it’s a minimum. If you paid $337.50 or more for your flight, 1350 is the minimum United (or any other airline) is required to offer you.
@graham
fare x 4 =min IDB compensation.
I believe they need to change the “fare” portion of that calc.
What if it a $99 one way fare or a miles ticket?
The “fare” portion of that formula should be based on a higher fare class (min average fare of the flight)
Give airline the “incentive” to not IDB. Just like how the airlines give “incentive” for not buying basic Econ.
This post is so much hyperbole
So an airline can’t get one person or group to voluntarily leave. They will cancel whole flights?
Sure they will… not
Come on we need to all get a grip here. All AV geeks on this board know that a full boarded plane with late shows that HAVE to be on the flight is a rare event.
All airlines will probably realize though if they don’t want to make a Billion dollar mistake. They might want to consider their customers first. (neat idea no?)
NO NO NO all airlines will probably realize that between the numbers $800 and $1 Billion there are a whole host of dollar amounts that could have made everybody happy in this situation.
Unlike the poor Doctor, there were probably a slew of people willing to get $10,000 or so to give up their seat that night. 40k is a whole lot LESS than 1 Billion, methinks.
But the real reason why Airlines do this nonsense is because until social media and smart phones they could get away with it. In the past this would be a page 10, 100 word newspaper story. NOW it’s the bloody doctor pic seen round the world. It could not have happened to a nicer bunch of bung holes frankly.
@ted
I would agree if I accepted the premise that IDB is an unavoidable thing that airlines must have the right to do.
I don’t accept that premise, but in a world where IDB is statutorily protected, I agree that the calculation should be based upon something other than fare actually paid or else, like I’m sure happened here, a big fat metaphorical (in this case literal) target gets put on the folks who got a good deal. double the last price publicly offered would be my back of the napkin answer.
@Dan
I’m very sure in hind sight, Oscar would have rather cancelled 2 flights rather to deal with the media storm going on right now
@DavidF your comments are spot on. Thank you!
So many problems with your logic:
1. If united cancels a flight because it couldn’t get its crew to the airport in time. It is 100% their fault, so all those passengers should be compensated.
2. The DOT mandated $1350 limit does not say that the airline can’t pay any more than that.
3. The word ‘denied boarding’ should mean to deny it before boarding has happened. Can you deny me from eating my cake if I have already eaten it? If they stopped the passenger to board the plane, that would be one thing. But here, they allowed him to board, then deboarded him. Where is the ‘denied boarding’ part?
4. What would united have done if they realized that their crew won’t reach in time AFTER this flight has already taken off? Would they call it back, deboard 4 passengers? My guess is no, they would have found other solution. They should have done the same here.
This post raises the issue that has concerned me. That it is the rest of us that will have to pay for this mismanaged incident. Sure, UA needs to manage its flight staffing better to avoid having the need to IDB people to accommodate deadheaders in the first place.
But sometimes stuff happens. So maybe they will cancel the downline flight now, instead of doing IDB to get the crew there. Lots of people inconvenienced at a significant cost, but losing millions in market cap averted. Or we may see them hold more boarding until any deadheaders are accommodated, causing delays. Or we may see them deboard the plane, tell everyone to stay at the gate, then reboard after bumping the last four to check in, And if as an FA you are confronted by a belligerent passenger, ignore it if possible and don’t call the police. I can just see a lot of ways the result could be bad news for the frequent flyer.
The compensation for voluntarily giving up your seat should be allowed to rise until there are enough takers. What the buyer of the seat paid for it shouldn’t even enter the equation. The value of the seat at the time of the offer of a buyout is all that matters. Three months out I have the choice of different airlines, different modes of transportation, I have made no plans that can’t be adjusted. When I am at the airport getting ready to board, all those choices are gone and that seat may be worth ten times what I paid for it to me now. It is not unfair for someone to expect to be compensated for the current value of the seat to give it up.
I am okay with overbooking. Economics says the airline won’t overbook more than they can afford to if they have to pay market price for the seats at the times when the overbooked flight has more passengers present than seats. The customers that take the airline’s offer when it becomes high enough have made a rational choice that they have better value from the compensation than from that seat. That if fair and would completely resolve these issues.
Airlines should be required to offer compensation that is high enough to empty the seats they need, not have their liability limited to an artificial number that can never be known in advance for a particular instance. The airlines are good with statistics. Over thousands of flights they could make the numbers work just fine and still pay market price for the seats they need on an individual flight. They should do that.
There’s an easy fix to this: like Polaris, lift the service standard to international norms:
“I, Oscar Munoz, commit United Airlines to the following standards:
1. We will no longer oversell any flight, ever. If Qantas can do it, we can do it.
2. Any passenger displaced for operational reasons will receive an immediate wire transfer of cash at ten times the purchased ticket price.
3. Any passenger displaced on a sector of less than 500 miles will also receive an immediate Uber to complete the journey.”
Turn this into a commercial opportunity!
Unless I’m misreading things, there was another United flight (albeit a different partner airline) going to Louisville from Chicago later that evening. Couldn’t they have put the crew on that later flight and, if necessary, denied boarding to people who hadn’t yet boarded? Rather than hauling off people who were already on the plane.
An unruly passenger NOT entitled to a seat he has poached is entirely different from a sedentary one in the correct location being evicted for the airline’s own operational reasons, caused by bad management. As others note, the airline has plenty of options apart from brute violence – zero out and cancel the MileagePlus account, put the poacher on a permanent no-fly list, and, yes, offer more compensation. If their alternative was to cancel the flight in the Louisville situation, they would have offered more. They thought, instead, that they’d be the mafia and the passengers would meekly submit. It is clear that United never came close to offering the compensation they could have. I think Congress will need to up the maximum liability for IDB, and indeed make it the standard payout. That will stop the airlines from playing these games.
“Most people have focused on United being unwilling to pay more compensation to get passengers to volunteer. As long as the government caps the amount the airline has to pay, at the same time limiting customers’ ability to sue airlines for most anything beyond explicit breaches of their contracts of carriage, we aren’t likely to see more compensation.”
You need to stop with this entirely fake argument and conflation.
Nothing stops United from offering more compensation. Nothing.
If they needed the crew there, they needed the crew there.
If they wanted to keep the fares paid by everyone else on board, they needed to fly.
What was that worth to them to re-obtain 4 seats they had no right to?
It was worth more than $3200. In fact, it apparently was worth millions given what ensued.
Even if you use expected value and think “multi-million-dollar PR fiasco is only a 1-in-1000 chance” we can do some quick math.
$10,000,000 PR disaster (this was worse)
0.1% chance
——————-
$10,000 expected value on typical flight to get the plane in the air w/o a PR disaster
4 (seats needed)
——————–
$2,500 — Amount a “rational”, calculating, un-feeling, un-thinking United should have been willing to pay per seat
It’s easy to show that in this case, the value per seat was actually millions.
It’s impossible to believe that a seat-by-seat effort (or PA announcement) where they offered $1000, then $1200, then $1500 wouldn’t resolve this situation in forciblynowhere near$1,350.
And there is no reason not to empowering gate agents to go to $2,500 in any situation where people need to be removed from the plane. In fact, it feels actuarily low.
So please stop Gary.
Gary,
I don’t think casual travelers (or a majority of regular travelers), differentiate between the distinct business entities that are regional carriers vs their bigger name brand airline.
Some expert flyers might realize the difference. But a regional carrier represents the brand the same way the mainline service does.
How many time does Gary refer to articles that quotes him(self)? Classic case of narcissism and anchoring one’s views. Gary – you have gone way beyond ‘staying true to yourself’ and quickly moved to entrenching further into your own beliefs and way you view the situation (even quoting yourself – good lord – I am guessing you only read things that agree with your point of view too). Many have made career defining mistakes this way – CEO’s included.
You’d likely learn a bit more if you were more willing to read and consider (not necessarily accept) different views, perspectives and opinions . This is more of the same nonsensical logic that you’ve been posting for the past 3 days – you literally haven’t expanded your opinion one bit – despite the fact there are more and more bits of news coming out that pain this picture worse than it is (have you redacted your comment about the Doctor having a criminal record – no one is sure it’s the right guy – same first and last name but different middle name – look it up). LA Times just released a story of a first class passenger getting kicked off his flight from hawaii also after getting in his seat. You are covering up a rampant problem with United that stems from them not caring about their passengers/customers anymore, with the priority being $$$.
United Airlines Promised Federal Regulators That All Ticketed Passengers Are Guaranteed Seats
BY DAVID SIROTA @DAVIDSIROTA ON 04/11/17 AT 6:07 PM
Less than three years before a passenger was forcibly removed from one of its aircrafts, United Airlines assured federal regulators that all ticketed passengers are guaranteed seats on flights. The promise was delivered in federal filings reviewed by International Business Times.
In September 2014 comments to federal officials, the Chicago-based airline outlined its opposition to proposed rules that sought more disclosure of the fees airlines charge to customers. One of the rules at issue was designed to compel airlines to more explicitly disclose fees charged for reserving specific seats.
“Including advance-seat-assignment charges among the ‘basic ancillary service’ fees that must be disclosed as part of initial fare displays makes no sense,” the airline wrote to the Department of Transportation. “Every ticket, of course, guarantees a passenger a seat on the plane, with no additional mandatory seat-assignment charges.”
Later in the filing, United Airlines expanded on its promise to regulators that it guarantees every ticketed passenger a seat.
“Importantly, every passenger who buys a ticket on a United flight or a flight on any of United’s partners or competitors in the United States will be assigned a seat at no additional charge (though in some cases this will still happen at the gate),” the airline wrote. “Therefore, the rule does not need to prescribe how carriers must disclose charges concerning advance seat assignments because passengers need not purchase this service to receive a seat assignment.”
Sorry, Gary, but you are wrong.
1: A passenger offered to exit the plane for $1600. UA GA laughed at the passenger.
2: As many have pointed out, the DOT “minimum payment” for IDB is a MINIMUM, not a maximum.
3: Does DOT require they pay cash, not a “travel voucher”?
4: This wasn’t IDB, because he wasn’t denied boarding. He was kicked off the plane, which is different. So I’m not sure your “IDB on requires x” is even relevant here.
5: Personally, I’m glad he threw a fit, and I hope more people do in the future. Airlines want to overbook? Fine. But they should completely lose their ability to “involuntarily” deny boarding to a ticketed and paid passenger.
It’s their money maker, it’s their problem. They can damn well just keep on increasing the compensation offered until they get takers. Heck, maybe they could even offer actual money, not just travel vouchers
United made tons of money last year, they should have increased amount until someone took it.
Well said @DavidF, @Mark.
It’s corporate greed.