USE UNITED DEBACLE TO WIN CHANGE
Cellphones and social media give today’s passengers enormous power.
United Airlines and its still unfolding “reaccommodation” debacle remind me of the day I was denied boarding by Allegheny Airlines in April 1972 for a Washington, D.C. to Hartford, Conn., flight. Arriving at the ticket counter with a confirmed reservation, I was told that the 10:15 a.m. departing plane was full. Scheduled to address a large outdoor citizen action rally in downtown Hartford, I protested vigorously against what I thought was a flagrant breach of contract. At first my protests did little. The boarding supervisor came in and confirmed the clerk’s decision. I wasn’t going anywhere that day.
But I asked a public interest lawyer, Reuben Robertson, to take my case against the airline. And we took it all the way to the U.S. Supreme Court where his brilliant arguments won a 9-0 ruling in 1976 that bumped passengers can pursue a case against the airlines’ fraudulent misrepresentation. And that decision shaped what happened in Chicago on Sunday.
After a number of legal steps, the Civil Aeronautics Board, the nominal federal airlines regulator back then, issued a rule requiring airlines to post a notice at ticket counters stating that passengers whose reservations could not be accommodated on overbooked flights may be entitled to compensation. Just how to implement this general directive was left to the airlines, which auctioned off seats of seated passengers with vouchers, gift cards or cash, plus a seat on the next departing flight.
UP THE ANTE
This market approach has worked like a charm. Airlines often overbook in anticipation of passengers who don’t show up on the date of the flight. On flights where there are more passengers than seats, in almost all the cases, a rising amount of compensation attracts the requisite number of seated passengers, who are in no special hurry, to give up their seats and end up with an unexpected windfall.
However, a bump in the road occurs when no one wants to give up seats on the first round of offers. The simple solution is to up the ante. United Airlines tried this approach with travel vouchers, expiring in one year, reaching $1,000. Cash would have worked better, of course, but for some reason, the airline stopped raising its offer before all four passengers agreed to give up their seats. And we have all heard about what happened from there.
United Airlines believed it could take any passenger off the plane for any reason because of the autocratic nature of the fine print “contract of carriage” written unilaterally and rubberstamped by the obeisant Federal Aviation Administration (FAA). This is a remarkable one-sided document, worthy of a corporate dictator. Running around 64 pages (single-spaced) and containing 37,502 words, you can squint at its language on United.com. A few years ago, our Faircontracts.org project tried to convince the FAA that its regulatory authority allows requiring a fairer, more consumer-friendly contract. To no avail.
PASSENGER POWER
This arrogance has been fueled by many mergers in the airline industry, leaving only four major carriers — United, Delta Air Lines, American Airlines and Southwest Airlines — operating out of hubs where they have overwhelming market dominance. In Chicago, for instance, United controls 43% of the flights from O’Hare Airport (together with American, controlling over 80% of flights).
As a result of that market power and weak-kneed regulators, well-behaved, seat-confirmed airline passengers today have no assurance against being disturbed and arbitrarily evicted. But consumers today enjoy powers that were not at my disposal when I took on the airlines in court. Ubiquitous cellphones give consumers the ability to record video of horrible customer service, and social media connects consumers by the millions so they can organize and unite.
Faced with a shaky stock price, social media rebellion in important foreign markets like China and growing anger among its customers in the U.S., United has capitulated. It has agreed not to use security police to remove ticketed passengers from flights in the future, and to refund the airfares of every passenger forced to witness the bloody events at O’Hare on Sunday.
The question now is whether passengers can stay united long enough to demand that other airlines match the Southwest model — no charges for reservation changes, no baggage fees for the first two bags checked, no charges for extra leg room or for using the upper baggage bins, or for buying your tickets over the phone or at the ticket counter. Tell these airlines, directly and on social media, to stop their irritating and irksome race to the bottom.