Monthly Archives: April 2017

Anyone Want to Fly United?

Gotta capture this one for the books. This week started off with a viral video clip of Dr. David Dao’s violent removal from Flight 3411 because, though the flight was NOT overbooked, 4 airline employees needed the seats to get to Louisville for other flight duties. So after an unsuccessful attempt at offering up to $1000 per passenger to voluntarily deplane, flight attendants arbitrarily picked 4 people, including Dao and his wife, to be ejected from their ticketed seats.

You probably know the rest. Dao refused. Airport Security / Chicago PD was called. They grabbed him, apparently clocked him in the mouth, and dragged him off the plane.  He’s now believed to have lost 2 front teeth and suffered a broken nose and concussion.

Not helping the situation has been United Continental Holdings’ Chief Executive Officer Oscar Munoz. In his first 2 responses to the PR crisis, he’s gone from behaving like a cold, legalese-spouting robot to even blaming Dao for being “disruptive and belligerent”. At the time of this writing, Munoz has made several additional attempts at apologizing in public and also to Dao directly. He’s announced that all passengers on Flight 3411 will be reimbursed for the flight. And United has promised never to call the police on its passengers again.

All that you probably knew. What I wanted to capture here was the surprising reaction I’ve been seeing from friends and total strangers on social media to the situation. But to start, I’ll summarize my personal take on it.

When you make a purchase from a business to provide a service, you are entering into an agreement. In fact, by accepting payment, the business is creating a POSITIVE RIGHT for me. (See my previous post on the differences between Positive and Negative Rights for more details.) There’s no need to have a formal, notarized contract ratified to legitimize our agreement. I give you some money. You promised to deliver a service. It used to be that we did things on a handshake because our word was our bond.

An agreement can have several conditions included in the exchange – some are explicit, others are implicit. For example, if I order a pizza to be delivered and it shows up next week, technically the business met the WHAT part of our agreement, but they certainly failed to meet the HOW or WHEN.

When it comes to the airline industry, it’s a hot mess. As consumers, we’ve grown so accustomed to receiving appalling service, getting molested and robbed by TSA agents, enduring abysmal on-time service level agreements, and begrudgingly stomaching an overall customer satisfaction rating that rivals most used car lot interactions.

So how shall we think about the events of this week? Well for starters, let’s look at the fact that city police were called to intervene on behalf of a business when no laws were being broken. Judge Andrew Napolitano said:

“By dislodging this passenger against his will, United violated its contractual obligation. … [Dao] bought the ticket, he passed the TSA, he was in his seat, he has every right to stay there.”

The Judge went on to say “If the reason for their call is not a crime, [CPD] should leave. … They have no right using violence to resolve a civil a dispute. … If the passenger is politely or reasonably sitting there, waiting for the flight to take off, he’s not committing a crime, he’s not engaged in violence, he’s not doing anything that justifies police force.”

Couldn’t agree with the Judge more. For those that are defending the authoritarians and touting the “Romans 13 / always obey the man with the badge” line of thinking, consider the dangerously slippery slope this creates. What’s to stop business owners from calling the police if you complain that you didn’t get the food you ordered at your favorite restaurant? They can now call the cops to just have you punched and dragged out? What about when you put money down to have a builder create your dream home? During your final walk through, you notice they used the nickel faucets instead of the copper that you had ordered. Cops will be called to force you at gunpoint to take delivery?

Again, these are civil matters. Not criminal. That’s exactly why the Judge states police have no business intervening. And these are obviously extremes, but in today’s crazy times, I’ve learned never to say “never”. Once the precedence is set, the door only swings open wider. Pandora’s box never closes.

Then you have the ad hominem attacks on Dr. Dao’s character. I haven’t seen any of my friends specifically justify UAL / CPD’s actions because of it, but they’ve felt the need to regurgitate the ‘background’ juicy details that have surfaced by digging into Dao’s past. So let’s think about this. Did the CPD know anything about his past when they assaulted him? Did UAL? Of course not. So anyone that’s actually taking even a second’s notice of anything that has to do with Dao’s character is basically playing a game of Statist Russian Roulette.

Put another way, when your moral evaluation of an attack hinges on whether the victim’s history warranted an arbitrary, unrelated, random (almost karmic) dispensation of justice today, then your argument is contrary to the ‘sanctity of the Rule of Law’ most of you also spout from the other side of your mouths. You can’t have both. You can’t support the “follow the rules” mantra and at the same time say “well regardless, he deserved it because he’s a jerk”.

Lastly, there’s the matter of the fine print. I’ve read over and over that the “fine print” on our tickets basically signs away all of our civil rights, constitutional protections, our first born, and part of our 401ks for the privilege of being stuffed into a can and shipped like cattle. (It’s very similar to the case of the Social Contract I often hear about whenever I protest the government stealing from us through taxation or waging wars we don’t support.) To this all I say, “is this fine print set in stone? We, as consumers, can’t demand more for our business? Are we completely powerless and simply have to take it?”

And yet again, the FREE MARKET is the solution to all of the airline industry’s problems. Why do we have such horrible service? It is not because of the lack of government intervention. It is directly CAUSED by government preventing competition from entering the US air carrier marketplace.

Marc Scribner of the Competitive Enterprise Institute notes that domestic airlines are protected against foreign airlines that want to fly domestic routes in the U.S.:

Since the Air Commerce Act of 1926, federal law has imposed ownership and control restrictions on U.S.-flag airlines. These restrictions were tightened under the Civil Aeronautics Act of 1938. Under current law, the maximum foreign ownership and control share of U.S.-flag airlines is 25 percent (see 49 U.S.C. § 40102(a)(15)(c) for the relevant definition of “citizen of the United States”). This is why Richard Branson only held 25 percent of Virgin America prior to its sale to Alaska Airlines. The rest was owned by a New York hedge fund.

The Air Commerce Act of 1926 also prohibited cabotage (see 49 U.S.C. § 41703 and 19 C.F.R. § 122.165), whereby foreign airlines service U.S. domestic routes. There are extremely narrow emergency exceptions to this broad ban on foreign airline competition along U.S. routes and these typically are only granted when a remote domestic route in the Pacific loses all U.S.-flag carrier service—which has occurred in Guam, for instance.

Have you ever flown Virgin America or Emirates Airlines? I’ve flown VA. Still waiting for the chance to fly EA. I can tell you that VA was one of the most pleasant flying experiences I’ve ever had. And I wasn’t flying 1st Class or Business. Just regular coach.  (I’ve heard that Emirates is the stuff of legend.)  Competition in the marketplace forces businesses to offer better service, more reliable departure/arrival SLAs, friendlier staff, and competitive pricing. Take away the competition (i.e. Cronyism) and you reduce incentives for businesses to improve. They get lazy. They get complacent. And they aren’t as eager to keep your loyalty.

It will be interesting to see what changes take place at United and the US airline industry in the next few months and years coming out of this debacle. The cynic in me thinks the public will lose interest in less than a month and Dr. Dao’s violation will become a distant memory in the Hall of Memes. The realist in me believes opportunistic politicians will see this as their clarion call to further regulate which keeps out competitors from entering the marketplace. I hope for our sake that sanity will prevail and the public will keep the pressure on businesses like United to change. I also hope we embrace competition and freedom rather than control and regulation to energize the airline industry.

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