United Airlines Forgets Capitalism Beats Up Passenger

Social media is ablaze with video taken of a United passenger being forcibly removed from an overbooked flight to open a seat for a United employee.

The video inspired this new United commercial by Jimmy Kimmel:

I understand that airlines need to be profitable and overbooking is a necessary evil. The airlines follow the best solution: pay a passenger to give up their seat. Evidently on this flight United personnel offered $400 + hotel, then doubled that to $800 but no one volunteered. United’s mistake was to stop there.

Offer enough money and someone will take it. There were 70 passengers on the flight. Would a $1,000 + hotel have convinced someone to volunteer? If not how about $1,200 or $1,500? Everyone of those 70 people had a dollar figure they would have accepted for the inconvenience of being stuck in Chicago for another day.The next flight was 22 hours later (why didn’t United offer to book the passenger on another airline? Was that really the next flight or the next United flight?) which is a considerable delay for most travelers but for the right price someone would have taken the cash.

United had an auction on their hands, the staff just didn’t realize it. They quit bidding before hitting the lowest price a passenger was willing to accept for another day in Chicago. Had they raised the offer by $200 increments they likely would have found someone quickly. $800 is pretty tempting to me but offer $1,200 airfare to Italy and I would have been off that plane and in a deep dish pizza restaurant, no beating necessary.

The problem is that United forgot that we live in a capitalist society. Airlines including United have been coddled since 9-11 by the government and have operated as a monopoly that competition is no longer in their DNA. When the capitalist tool of cash appeared to fail the United personnel immediately resorted to state sanctioned force in the form of the police. United is a private corporation and that knee-jerk resort to force over cash is what troubles me most about the incident. United acted like Aeroflot during the Soviet days instead of a competitor in a free market.

Every problem doesn’t need the involvement of Congress, but the problem this incident highlights is due to government intervention in the market. The federal government has limited competition in the US domestic market from foreign airlines to protect US airlines. Since deregulation in the late 1980s the US has gone from dozens of domestic carriers to just three. Foreign carriers are allowed to fly from domestic US airports to foreign destinations but are forbidden to fly from one US city to another. Allowing foreign airlines to fly routes like Chicago to Louisville would shake up Delta, United and American Airlines and discourage such heavy handed behavior as seen on that United flight. UK-based carrier Virgin Airlines bans overbooking so the incident never would have happened on one of its flights.

US airlines have forgotten how to compete. It’s up to Congress to act and allow foreign airlines to teach them in their home market.

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2 Comments

  1. PUMABydesign001:

    Good grief, “Fly the Friendly Skies of United” seems to LONG AGO.

    The airline missed an opportunity that will now cost them 100,000 times more than if they would have offered passengers $1200.

  2. A few more funny United Airlines memes for you to enjoy:

    […] airport security was unnecessarily rough is all bad. As Scott Kirwin said in a must-read post here, as competition amongst airlines has diminished, airlines have gotten careless and unforgivably […]

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