April 11, 2017 3 Comments
So, this happened
— TheJournal.ie (@thejournal_ie) April 10, 2017
And so, United unleashed a pretty good Twitter Storm worldwide. And they deserve it for simple stupidity.
Sure they overbook, and it’s understandable why they do. Sean Davis gave us a pretty good explanation of how it works. An empty seat is decidedly lost revenue, never to be recovered. Although JetBlue, the low-cost carrier doesn’t, never has, and say they never will.
Mollie Hemingway at The Federalist had a bit to say about it yesterday.
United has confirmed that they overbooked the flight and dragged a passenger off when they didn’t get enough volunteers. United had previously offered money — up to $800 — for passengers to voluntarily get off the flight. The passengers who needed to be seated were United employees who needed to get to another destination in order to work a flight there, apparently. But when $800 wasn’t enough to get volunteers, they chose to take a man seated on his flight with a ticket he paid for and remove him forcibly. Now they’re facing a social media backlash as a result.
People already are upset with how undignified air travel has become, even if it is relatively cheaper than air travel decades ago. United was also recently embroiled in a (frankly stupid) public relations problem for enforcing its employee dress code on girls who were flying on employee passes. Now this. Being dragged off a plane by brutish security guards for the crime of purchasing a ticket and taking your seat when the airline boarded is something that just doesn’t look good.
But why didn’t United just do the simple thing of understanding that the money it was offering was insufficient and needed to be raised? Laura Begley Broom just wrote in Forbes, “Why Delta Air Lines Paid Me $11,000 Not To Fly To Florida This Weekend.” She was caught up in the recent storm-caused travel delays. While Delta tried to take volunteers for lower amounts, she and her husband negotiated a better deal for their first flight delay. Then they did it again for a second delay. Then they negotiated an additional $1,000 per family member to cancel their trip altogether.
Each step of the way, according to Broom, Delta understood that giving this family nearly $4,000 cash money was cheaper than dealing with an untenably complicated situation.
United should have simply started offering more money. If $800 wasn’t enough, what about $1,000? If $1,000 wasn’t enough, how about $1,200? They were receiving real-time information about price setting and they weren’t responsive to it. Now they’ll suffer much more through negative public relations and earned bad media. A bit of knowledge of economics might have helped them.
She’s right, that’s a free market solution to the problem, at some point, some passenger would have decided that the price would have been sufficient for the inconvenience. Instead, they managed to look stupid (which undoubtedly whoever decided this is) to thousands of people all over the world, who will henceforth do their damnedest NOT to fly the once ‘friendly skies’. Yeah, I remember when it was a pleasant experience, but I’m old, the planes were 707s and Convair 880s. Seen one lately?
Instead, they forced the issue, removing a passenger for “for the crime of purchasing a ticket and taking your seat when the airline boarded”. It’s really hard to see how they could be this stupid, especially so that they could move some employees to work another flight, so probably not even a paying passenger.
Not the first time I’ve compared air travel in the United States to emigrant class in the old west, and I doubt it’ll be the last, you’ve also heard me refer to it as “cattle class”.
Why is this so stupid? One the passenger they removed surely has a bad taste in his mouth from the experience (likely a lawsuit pending as well). But the real cost of this is in the thousands of people who will try their best to avoid United at all costs, or even flying, which has become almost more of a hassle than the time saved is worth. That’s not all down to the airlines, the kabuki theatre of security bears a lot of blame as well. But the airlines get plenty of blame as well. Interestingly, last night I was listening to BBC Norfolk, a local station in Norwich, England. This was one of their lead stories. Real good job there, United.
UAL managed to save a few thousand bucks here at the cost of untold thousands, perhaps millions. And being held up as a horrible example, worldwide. That’s a cost of flouting the free market by a very stupid corporation. And they deserve every bit of it.
And an update: United’s market cap has fallen $830 million, with a 3.7 percent drop in share price, according to MarketWatch.