On Sunday, a 69 year-old passenger on a United Airlines flight was dragged screaming from his seat by security officials at Chicago’s O’Hare International Airport after he refused to leave the plane on being commanded to do so. Other passengers whipped out their smartphones and uploaded videos of the manhandling, creating an outcry against the treatment of the senior citizen as well as the system that led to the stand-off.
I heard of the practice of overbooking while in my teens, from American friends and relatives who described making a couple of hundred bucks by volunteering to take a slightly later flight. I know now that overbooking and offloading happens everywhere, but it remains most common in the US. On my first visit to North America, I hoped to get offloaded at least once, but was beaten to the draw by more experienced travellers when the opportunity arrived. In the years since, the compensation offered by airlines has shrunk relative to my means, and I’ve grown more worried than eager about potential offloading. The best way to prevent this is, of course, to fly business or first, since one’s chances of being bumped are inversely proportional to the price paid for the ticket. Mohamed Atta and his fellow 9/11 conspirators obviously took that into consideration, eschewing economy fares on their way to the conflagration. Imagine planning the greatest terrorist attack in history only to get offloaded before take-off. I have a feeling Indian jihadis would have cut corners, but maybe I’m stereotyping.
The attack of September 2001 ended the best thing about flying in the US, which was ease of access. You could turn up half an hour before departure and waltz through security. Now you have to use a TSA compliant lock, or you’ll end up with an unprotected suitcase because they are too stingy to use a two-cent piece of plastic to secure your bag after breaking into it.
Flying unfettered
In every other respect, American airlines sucked before 9/11 and have continued to do so after. Whether you consider price, comfort, quality of service, or condition of airports, carriers from the Asia-Pacific region, the Gulf, and Western Europe do perceptibly better than American ones. Despite higher taxes, Europe offers cheaper flying options than the US, something I’m learning again as I book flights within each continent for a vacation later this year.
Why should this be the case? The primary reason is that the United States is far from the paragon of free trade that some people take it to be (people who, for instance, argue that if GST was a good idea, the US would already have implemented something like it). According to US law, any airline seeking to connect American cities has to be at least 75% American-owned. That’s an absurdly protectionist rule which, along with a long process of consolidation, has led to 80% of the massive US market being dominated by just four airlines: American, Delta, Southwest and United. A few short-haul budget carriers and regional airlines get the crumbs left over from the Big Four’s banquet. The Trump administration’s ban on laptops being carried on flights from the Gulf and Turkey could be interpreted as an extension of US protectionism into the international arena under the garb of national security.
Under Jimmy Carter in the late 1970s, the US took steps to deregulate its aviation industry, but there was little follow up from succeeding administrations, partly because companies were in such bad shape. Airlines lost money in ten of the 20 years after Reagan replaced Carter, including an eye-watering net loss of $51 billion between 2001 and 2011. Warren Buffett called the industry a “death-trap for investors” and joked that a perceptive trader might want to go back in time and shoot the Wright brothers.
The turnaround
The situation has turned around dramatically in the last few years. Low petroleum prices, combined with a reasonably protected and highly consolidated market have proved a recipe for fat profits. Buffett himself thinks that airlines might have put a bad first century behind them, and he has backed his prediction with a $10 billion-bet spread across the Big Four airlines.
Given the demand for seats and the meagreness of available options, I doubt if calls to boycott United Airlines following its offloading fiasco are going to have a long-term impact. After all, other airlines also overbook flights, also force passengers off when inducements do not work, and will also call security should a passenger refuse to disembark when ordered to do so. American security being as brutally efficient as American commerce, the situation in Chicago played out quite predictably. What’s dragging a man a few feet when you’re prepared to shoot people dead on a small pretext?
Does the United Airlines episode tell us anything about the situation in India, where airline staff are in the news for being beaten rather than initiating violence? Not directly, but it does underline how oligopolies lead to customers being short-changed. The deregulation of India’s aviation industry has been an unmixed blessing and needs to go further. Air India continues to drain the exchequer despite low fuel prices and a captive market of public expenditure. On my last government-funded trip, to a seminar in Santiniketan, I was instructed to travel by Air India despite two airlines offering far cheaper fares. I could barely bring myself to click on the “book now” button, knowing I was getting less efficiency for more money. There’s no good reason to keep feeding that white elephant. Let’s offload the company now.
