Magazine ArticlesPerspective

Change of Policy: Has United Airlines Missed the Point?

Change of Policy: Has United Airlines Missed the Point?

When you revisit the sequence of events before and after the brutal removal of Dr. David Dao from United Airlines Flight 3411, you would agree that there was perhaps a triple fiasco. The first instance happened at the pre-boarding when the airline failed to secure enough voluntary denied boarding and yet allowed passengers to board the plane.

The second instance was the decision to resort to law enforcement to remove a paying passenger who did not cause any safety nor security threats.

Finally, the third instance was the first PR attempts by United to justify the forcible removal instead of recognizing the gravity of the fact that a paying and seated customer was seriously hurt, ‘’ publicly’’ humiliated and horribly mistreated.

To his credit, Oscar Munoz, the CEO of United did manage to correct the PR mistake and promise to take appropriate measures to prevent such unacceptable events happening again in the future. As a result, many positive things have indeed followed at least in this specific case. Firstly, United did settle the matter with Dr. David Dao. The amount of the settlement is said to be confidential. Dr. Dao’s lawyer publicly praised United for taking responsibility for what had happened. And that too is a positive credit for the airline.

Secondly, United has released a 10-point commitment to improving its customer service “to ensure that United always put customers first.”

One may argue that such policies should have been in place a long time ago. Nonetheless, the airline’s leadership has walked their talk to do the right thing and that is what should matter most.

With that said, there are however two specific points, which tend to suggest that United Airlines has probably missed the point about what had happened on flight 3411. The first point is related to the ‘’ increase of customer compensation incentives for voluntary denied boarding up to $10,000 ‘’.  And the second point pertains to the commitment to ‘’reduce the amount of overbooking’’.

Increase of customer incentives up to $10,000

Maybe this amount was announced to match and slightly surpass what Delta Airlines has promised immediately following the incident involving Dr. Dao. However, such an announcement may make things even harder than before, contrary to what this change of policy anticipates. The reason being that this public knowledge could encourage passengers to reject lower value incentives and wait until the stakes are as high as $10,000. Furthermore, what economic sense does it really make to offer a $10,000 perk to passengers who may have bought a ticket worth a few hundred dollars?

Reduce the amount of overbooking

Why not bite the bullet and stop overbooking once and for all? Why didn’t United leaders take the courageous decision to end a practice, which makes absolutely no common nor economic sense?

The right opportunity was there and United appeared to have missed it. That would have been the most courageous, powerful and effective message to have sent to customers, employees and the general public alike. After all, the overbooking incident has cost United almost a billion dollar in share value and that in addition to the confidential compensation given to Dr. David Dao, in order to avoid an otherwise damaging lawsuit.

The most important lesson to have learned

And that is not over, the most important lesson United appears to have missed from this unfortunate overbooking incident is about customers of the type of Dr. Dao. No incentive in the world and one might add that no threat as well, could have convinced him to give up his seat and voluntarily change his flight plan or leave that plane. Some observers, including United, mistakenly read in that an act of defiance. Although it might have appeared so, Dr. David Dao was focused on one thing and one thing alone: reach his destination on time in order to honor and serve his customers. And to his defense, that is what he reportedly explained to the United crew. Indeed, it was probably too late for him to possibly try to rebook some or all of the appointments he had with his patients, probably many days, weeks or months in advance.

So, in final analysis, this whole issue was not about the inadequate level of incentives to voluntary denied boarding, it was, in reality, the failure on United Airlines part to recognize, honor and truly connect a customer to what mattered for him most in that moment of time. Therefore, by maintaining the practice of overbooking, United cannot be sure to live up to its publicly claimed, shared purpose of ‘’ connecting people to the moments that matter most.’’

In a nutshell, the practice of overbooking which led to this costly saga is clearly inconsistent with United Airlines shared purpose and values. In our opinion, the airline’s decision-makers should have done the right thing to stop overbooking altogether. By not doing so, that is where they have missed the point. And guess who jumped on that golden opportunity?  JetBlue Airways was the only airline that rightfully rejected overbooking a long time ago, so this opportunity does not make much of a difference for them. So the airline, which appeared to have recognized and seized this momentous opportunity is Southwest Airlines, by committing publicly to stop overbooking and especially by citing the United fiasco as their reason to do so.

Click here for reuse options!
Copyright 2017 Airline Profits
Previous post

Will AirAsia X Succeed at Conquering the US Market?

Next post

Is Overbooking a Cost-effective Airline Business Practice?

Kofi Sonokpon

Kofi Sonokpon

Managing Editor of Airline Profits, the first aviation magazine devoted to improving airline effectiveness and profitability, Kofi Sonokpon has more than 20 years of international experience in aviation. Kofi holds an IATA sponsored Master of Business Administration (MBA) in Air Transport Management from the John Molson School of Business at Concordia University in Montreal. Kofi Sonokpon is a speaker, an airline business thought-leader, and author an innovative book series intended for the 21st century airline, namely Airlines for Business and Airlines for Technology.