United Airlines Set to Lose Millions, Maybe Billions

United Airlines Set to Lose Millions, Maybe Billions

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Last week United flight 3411 was scheduled to travel from Chicago to Louisville. The full flight was completely full and loaded with passengers. Just before takeoff, a United flight ticket agent said the flight was overbooked and asked 4 passengers to voluntarily leave the plane. In exchange, the airline would offer $400, a hotel room and status on a flight the next day. No one budged. The next offer was similar, but the compensation was doubled to $800. Still, no one budged.

The next voice was that of a United manager. She said 4 passengers were going to be selected at random and asked to leave the plane. Following some algorithm, 4 passengers were randomly selected. Three of them got up and exited the front of the plane.  The 4th passenger, David Dao, refused. He said that he was a medical doctor and needed to see patients the next day. TSA Security Agents were called and away we go.

One of the agents grabbed Dr. Dao and forcibly pulled him out of his seat. He was then dragged off the plane by his arms. According to Dr. Dao’s lawyer, he suffered a concussion, a broken nose and lost 2 teeth.

Facts: There are a few facts to consider here.

  • The flight was not overbooked. United wanted 4 crew members to get on the flight so they could meet a scheduled flight out of Louisville the next day.
  • The United manager did not increase the voucher up to the $1,400 that is allowable on any flight to entice passengers to voluntarily leave the flight.
  • The passengers were not truly randomly selected. The algorithm rank-orders passengers based on loyalty status and how much they paid for the flight.  The four passengers were among the non-frequent flyers who paid the least amount for the flight.
  • Airlines do frequently overbook flights and engage in this process of compensating volunteers for voluntarily choosing to take a later flight.
  • In the fine print, it does say that airlines have the right to give your seat to someone else. In actuality, we, the public, are not buying a seat on a flight.  They just can’t forcibly remove a passenger against his/her will.

Joe’s Perspective: This one is simple – it’s a slam dunk. Just put yourself in the passenger’s perspective and ask yourself the following questions:

  • Would you give up your seat voluntarily as a paying customer?
  • Is it fair or right that a company can make you give up your seat because they overbooked or they want their employees to make another flight?
  • Do you have the right to be treated fairly and respectfully by a company that pledges to get you to a certain destination in a timely manner for an agreed-upon fee?
  • Does a security officer have the right to man-handle passengers to get them to leave when they have done nothing wrong?

If you are like me and the billions of people who watched this video, you probably come down on the side of the passenger. This will cost United millions and maybe billions. David Dao will ask for millions in court. United’s stock has gone done 28% in just a few days. The CEO made half-hearted apologies and he will probably lose his job just so United can save face. Passengers will choose other airlines whenever possible. This is very bad for business. Other airlines should pay attention.

The Other Side: I read a Facebook post from a pilot’s wife who explained the other side. In essence, she argued that Federal Law states that pilots and crew need to make their scheduled flights. If not, the entire system will break down. For example, if that crew did not make their scheduled flight the next day, 150 or so people would be inconvenienced. This would set off a chain reaction, affecting other flights. We would essentially have chaos in the skies. The other fact she pointed out was that no United employee ever laid a hand on any passenger. The followed the regulations and notified TSA. It was the TSA agent who roughed up the customer. She has a lot of other arguments that you can read below that made me question my point of view.

Hmmm… I hate it when people make logical arguments in the face of my righteous emotions. With that being said, I still say United ran the playbook on how to lose billions and piss off customers. If United needed those seats, they should have offered $1,400 or $2,000. Someone would eventually get up and dance their way to the front of the plane. They could have parted with an additional $2,000 (4 passengers x $500 additional) instead of the billions they will lose in court fees, stock prices and future customers. Seems like an easy choice now.

Your Turn: What are your thoughts on the whole scenario? What would you have done as a passenger in that situation? If you were the CEO of a airline company, what changes would you make to ensure this never happens again?

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