Note: this post is focused primarily on the US-based airline industry, with which I have the most familiarity. If you have similar experiences with airlines in other countries, please share your story by leaving a comment to this post. Thanks!
Thanks to Delta Air Lines‘ practice of overbooking their flights, my wife and I do not get to go on vacation this year. A little more than a month ago, we had booked a package vacation through Orbitz.com to Jamaica as a self-indulgent reward for what has been a very busy year. The first indication that something was wrong arose when I tried to check us in on-line exactly 24 hours before the scheduled departure. Delta’s website indicated that we were confirmed passengers but would not assign us seat numbers. Instead, we were instructed to obtain our seat numbers at the gate. Having experienced the frustration of being left stranded at the hands of Continental Airlines two years prior, we left for the airport earlier than we normally would have to try and compensate for what we knew was an overbooked flight. There we were greeted by dozens of frustrated passengers and one polite but frazzled member of Delta’s ground staff, who reaffirmed that we had confirmed seats and would definitely receive our seat numbers at the gate. From his look, however, it was plain to see that he had told that lie a thousand times before. At the gate, we were told by a dismissive gate agent to take a seat and wait for our names to be called. When we asked for further details, she simply turned away and started a conversation with her colleague on a completely unrelated topic. So much for the Delta Change promise. Not being strangers to this attitude, we persisted politely until we were finally granted boarding passes. Once on the plane, we realized that one of our seats had already been assigned to somebody else and had another passenger in it – so the airline forced us to get off the plane. I expressed my frustration to the senior crew member as I walked off of the plane and said, “What sort of operation are you guys running? Don’t you see this is a lawsuit waiting to happen?” He just grinned at me, patted me on the back and told me to take it up with the gate agent. The sheer arrogance was unbelievable. It took another two hours before the paperwork had been sorted out and we were in a cab on our way home, frustrated and disappointed by what should have been our first vacation together in nearly two years and with our check-in baggage firmly en route to Jamaica.
Overbooking – also known colloquially as “overselling” or “bumping” and technically referred to as “involuntary oversales” – occurs when airlines sell more tickets than available physical seats on a given flight. This practice regularly causes people to miss vacations, miss seeing their loved ones over the holidays, or simply miss getting from point A to point B. In at least one case, it even led to death. To get a sense of the scope of the problem, just search for the terms “airline overbooking lawsuit” on Google and review the trove of results.
Overbooking is not a new problem. 426 US 290 Nader v. Allegheny Airlines Inc represents a landmark case that was argued and decided in 1976 and appears to be partly responsible for the minimal set of rights that affected travelers take for granted today. If you’re surprised that little seems to have changed in more than thirty years since then, join the club.
From a legal point of view – and I freely disclose that I am not a lawyer, so please view these comments as the interpretations of a layman – this practice, shameful and unethical though it may be, appears to be supported by current legislation that grants the airlines certain protections from consumer action. If you are interested in further research of the legal dimension, the Airline Deregulation Act of 1978 and the Federal Aviation Act of 1958 appear to be most relevant.
The body that is supposed to oversee the behavior of the airline industry, the Federal Aviation Administration (FAA), is well aware of the problem. On May 20, 2009, Nancy Lobue, Acting Assistant Administrator, Aviation Policy, Planning, and Environment, testified before the House Committee on Transportation and Infrastructure, Subcommittee on Aviation. In her testimony, Lobue cited statistics on involuntary oversales: “In 2008, the involuntary oversales (“bumping”) rate was 1.10 per 10,000 passengers, compared to 1.12 for 2007. For the first quarter of 2009, the bumping rate was 1.31 per 10,000 passengers, compared to 1.37 for the first quarter of 2008, and 1.46 for the first quarter of 2007.” At first glance, these statistics may appear to suggest a trend in the right direction. To my untrained eye, comparing statistics within a 2-year time frame must be wholly misleading considering that this practice has been going on for decades. It also provides no perspective on how these figures change during busy holiday periods or as a result of inclement weather conditions. In my opinion, the FAA should be required to publish historical metrics and trend analyses that provide real insight rather than sugarcoating the issue (if they already are and I just missed them, please leave a comment with the appropriate references).
The economic argument for overbooking is that airlines lose money when they cannot fill a flight to capacity. Academic research appears to acknowledge this claim as legitimate; I was able to find an excerpt of an article on the subject published in Operations Research back in 1985. The excerpt cites the claim of industry executives that “without overbooking, the planes would often depart with empty seats for which there was a demand and the “load factors” (fractions of seats used) on many of the flights might fall below break-even.” I didn’t pay the US$22.00 to purchase the entire article, so I do not know the author’s conclusions. The stated industry claim, however, seems to ignore completely the idea that seats lost to no-shows can be assigned to standby passengers or to people left stranded due to a previously canceled flight.
Since there are virtually no penalties that accrue to the airline from overbooking, the incentive for the airline is to say, “Fuck the consumer. The bottom line is more important that the consumer relationship or even good old-fashioned ethics, especially since consumers can’t really go elsewhere.” The dimensions at play here are compensation and timeliness, and the way the airline industry works today is that only the first dimension is typically addressed satisfactorily in an involuntary overbooking incident.
To explain what I mean, here’s an analogy. Imagine that you and someone else make a reservation at a restaurant for the same date and time. You both show up only to find out that the restaurant can seat only one party. An argument ensues and the restaurateur decides to offer a gift certificate worth a nominal amount to a volunteer that essentially represents a free meal at a later date. Mollified, the party less interested to dine at that particular establishment at that particular point in time decides to accept the gift certificate and heads out the door. Up until this point, the analogy parallels more or less what happens with airlines. From here on forward, however, the analogy breaks down. In the restaurant example, the party that walked out the door can go just about anywhere else and have a meal. Sure, it’s not the same restaurant, but the overall experience of dining out is not diminished substantially. In contrast, an airline customer has no such choice. When Delta decided to fuck us and some thirty-odd other disenfranchised customers on the same flight, we were compensated per current regulations – essentially the cost of the ticket plus cab fare to go home. However, we could not simply walk over to the counter of a competing airline and buy another ticket at a comparable price that would get us to our intended destination in more or less the same time frame. In fact, because of the double-whammy of a snow storm the previous day and the busy holiday season, there were no seats available on any airline to our destination until a week later. The dimension of timeliness simply could not be addressed satisfactorily and forced us to spend the day on the phone trying to get our money back and research alternate vacation dates.
So what’s a hapless customer to do? The angry part of me wants to file a class action lawsuit against the airline industry and sue them for everything they’ve got. The more level-headed part of me points out that the airline industry is financially bankrupt and that in and of itself would make it difficult to find a capable team of lawyers to go after the airlines. Instead, that part of me wants to channel my anger towards making overbooking illegal, or at least align incentives more closely with consumer interests. It would also be nice to see U.S. airspace opened to foreign competition and make America eat its own dog food as far as its preaching about free markets is concerned.
Immediate next steps are probably along the lines of the following:
- Letters to the CEOs of Delta and other major airlines
- Letter to Ray LaHood, current U.S. Secretary of Transportation
- Letters to consumer advocacy departments of media outlets such as NY1 For You
- Complaints with the Better Business Bureau (BBB) and the FAA
If you have other ideas, please leave a comment. Admittedly, this feels a little bit like Andy Dufresne’s repeated attempts to build out his prison library in The Shawshank Redemption. The lesson there was about polite but firm persistence and above all, patience. With topics like the global economic meltdown, national healthcare, wars on multiple fronts, global warming and other issues competing for attention, that is a lesson I had best take to heart.
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