Tuesday, May 09, 2017

Come fly with me, let’s fly, let’s fly away! Or, maybe not!


U.S. airlines have been attracting enormous amounts of negative, but well-deserved attention recently.

The most notorious of these outrages is the dragging of a paying, seated United Airlines customer off an airplane so that an employee could take the seat, instead. United CEO Oscar Munoz finally got it together, backtracked on his lame initial statement, and told a Congressional committee that he realized how badly his airline had screwed up and explained what it was doing to repair its policies. Time will tell about that.

A Delta flight more recently had an incident where a customer was told that a seat he had purchased for one of his children, but that was occupied by a different child, was no longer his, and he and his wife were threatened with jail time and losing custody of their children for breaching a federal law if he did not comply with the airline’s demand to give up the seat he paid for to another flyer.

And then there were the thousands of stranded passengers and many cancelled or delayed flights because Delta‘s mid-20th century communications system failed.

The airlines are within their “rights” in the first two of these incidents, by virtue of their passenger agreements that cover aspects of flying on their planes.

Passenger agreements run to dozens of pages and contain all the fine print necessary to allow an airline to pretty much treat the people it depends upon for survival any way it pleases. United’s Contract of Carriage Document, for example, takes 37,531 words covering 63 normally formatted Word document pages to explain what it can do with/to you.

That’s as long as two or three chapters in a good book. How many people actually read these things? Is this document even easily available to people booking a flight?

Located online, United’s document says, in part: “Each United Carrier reserves the right to … change or modify any of its conditions of contract with or without notice to ticketed passengers.” If you have read this tiny piece of those 35 thousand words, you have been forewarned that United can have its way with you, and you have apparently no recourse, no matter how stupid, violent or unfair its actions may be.

While airlines have the right to do what their agreements state they can do, they first and foremost have an obligation to treat their customers with respect and deference and bend a little sometimes, because it often makes more sense to treat people well than to strictly follow the rules, especially with passengers that airline personnel have allowed to board a plane. A good rule to follow is: Just because you can do something does not mean you should do it.

The United and Delta incidents demonstrate that some airlines tend to view their customers more as cargo than as customers. How did this idiotic situation come to be?

The “Economic Letter” of the Federal Reserve Bank of San Francisco from January 2002 provides some insight into how the airline industry has changed from 1975 to 2000.

When airline deregulation began in 1979, it started an increase in passengers that tripled by 2000, while average fares dropped by about two-thirds. So, in 2000 there were three times as many passengers as in the 70s paying a third the price per ticket (in 1983 dollars).

With more people flying at fewer dollars per ticket, filling every seat became important. To address this factor airlines adopted the practice of deliberately over-booking seats, so that there are more passengers with tickets than seats on the plane, meaning that even no-shows don’t prevent every seat from being filled, maximizing revenue per flight. The need for revenue may also explain the explosion of fees and crazy rules.

However, over-booking also means that lots of people don't get on their chosen flight, unless some passenger fails to show up, or is dragged off a plane. Perhaps ticket holders are aware of that going in, being placed on standby status, or some other similar situation.

As bad as it may be to not be allowed to board the flight you paid for, it is far worse to have bought a ticket and be seated on the plane with your luggage also on the plane and be asked or told to vacate the seat because the airline needs it for an employee.

If the airline needs seats to move employees from place to place, they should reserve them prior to letting paying customers be boarded. That’s just common sense. If they can’t do that, the employee should wait, not the customer.

Perhaps turning a profit in the airline industry is particularly difficult because of the highly competitive nature of that market. Even so, taking paying customers out of a seat on a plane they have paid for and already occupy is not what you would call a smart business plan.

Inexpensive airline tickets certainly attract passengers, but many flyers are able and willing to pay a little more for better accommodations, and knowing they will not be beaten into submission and dragged from paid-for seats to make room for an employee.

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