United for competition

AIRLINES in the USA are crap compared to Middle Eastern and Asian ones, as I learned intimately on the occasions I had to fly within the US. Thanks to long- standing protectionist policies, only US carriers may fly within two points in the US; even the EU-US Open Skies agreement signed in 2007 enabled US carriers to fly within the EU but not vice versa, and some analysts suspect that the ban on using large electronic devices on flights from airports including Dubai, Abu Dhabi and Doha has little to do with counter-terrorism and more to do with punishing Gulf airlines offering a superior service.

Today 80 per cent of the US market is dominated by four airlines, with many airports and routes heavily dominated by a single player. I have “savoured” economy class (which they call ‘coach’) on all of them, and my fears of cancellations, delays, late bags and tedious security checks (augmented by my name of Arabic origin) have often come true.

But none of those compare to the case of Dr David Dao, a passenger who was assaulted and removed from a United Airlines f light last Sunday so that staff members could get seats instead. We know this from viral footage of the incident, and the CEO’s initial response added fuel to the fire, appearing to blame the passenger for being belligerent. The CEO has since become more contrite, but United’s stock price has fallen and thousands have vowed never to fly with them, regardless of the policy regarding passenger removals. No doubt many factors contributed to the whole incident, including bad operating procedures, overbearing law enforcement, possible racism and the lack of competition.

It was only the previous week that Pepsi suffered a public relations disaster with a nowpulled advertisement seen to trivialise protests by invoking their imagery, and suggesting that a model could broker peace between protestors and police by offering the latter a drink.

Memorable public relations failures have happened in Malaysia too: airlines have been shamed over their response to disasters or even their nasi lemak, eateries have been closed, and just recently a man lost his distribution business after being caught on video abusing a dog.

Such is the power of social media – and services such as AirBnB and TripAdvisor (which Emirates quoted in its tweet mocking United) deploy the same principle of using public feedback to reward or punish businesses. It is a double- edged sword, of course, because accusations ( like fake news) can be invented: it is easy to verify an incident witnessed and recorded by many people, but in other cases all it can take is several accusers coordinating fictitious complaints about companies – particularly smaller ones – to destroy their reputation. The reliance on social media for information has also meant that possessing accounts has become a form of defence, to the extent that hirers consider Facebook, Twitter and Instagram profiles as the new CVs – and not having them may suggest you have something to hide.

But I have observed that while many are willing to punish businesses for bad behaviour, the same people are less willing to do so when it comes to politicians. Somehow, when it comes to politics, brand loyalty is so strong that what ought to be public relations disasters are excused away, while small successes are portrayed as major triumphs. There is, of course, much selection in what are deemed anomalies and what are deemed as representing the entire party. (A recent example is the suggestion that rape victims should marry their rapist.)

Partly this is because unlike companies offering a particular product or service, political offerings form a bigger package, making them harder to disavow for a failure in just one respect. Furthermore, politics provides identity markers, especially for those who believe that one’s race or religion requires loyalty to one particular party.

But the other reason why bad elected politicians often aren’t severely punished is that, just as with distorted markets, they have manipulated the system to protect them.

Though the customers can only choose one service provider (or perhaps two or three if the country has local and state elections too) once every few years, political leaders can use protectionist policies such as centralising power within their parties, manipulating the electoral system and assaulting check and balance institutions established by the constitution to ensure a limited choice at the elections.

Ideas is embarking on research on the Asean Single Aviation Market (to ensure that we don’t go down the path of US airlines), and we may once again see that achieving economic liberalisation across the region is easier than achieving political liberalisation within its member countries.

Tunku Zain Al-’Abidin founding president of Ideas. is