STATUS SYMBOLS

United Airlines has exposed the moral dilemma behind rewarding customer loyalty

Obsession
Getting There
Obsession
Getting There

A few years ago I was booked on a flight from Kansas City to Newark that was running a few hours late. Shortly before we boarded, the reason for the delay trickled out: Our plane was leaking fuel. All requests to switch flights were denied.

But then several passengers’ names were called, mine included. We were placed on another flight due to leave around the same time, to reduce the weight on the leaky plane. And I wasn’t randomly selected—I got picked because of my 1K frequent flyer status.

As I boarded the new, non-leaky plane, I got a glimpse of what the first class passengers on the Titanic must have felt like (though the leaky plane landed just fine in the end).

I thought back on this story when news broke about the United passenger who was violently dragged off an overbooked flight on Sunday. The scandal, driven in part by the airline’s ham-fisted PR response, has exposed a significant division between hardy road warriors and more infrequent flyers.

Virtually everyone, business class and coach class alike, agrees that the male passenger—recently identified as Vietnamese doctor David Dao—was treated abysmally. No one deserves to have their face bloodied.

Beyond that, there’s a parting of the ways: Many infrequent travelers are outraged that purchasing a ticket does not give a customer to right to actually fly on their chosen flight—even, in rare cases like Sunday, after boarding has taken place.

Many elite fliers, on the other hand, are more sympathetic to United. They argue the airline business is complex and only works if everyone follows the rules. If someone asks you to get off the plane, it’s unpleasant but you have to do it. Of course, that’s easy for the elites to say—they’re the last ones forced to give up their seats.

But they have a point. It is true that airlines are cutting corners and cutting back on services. But they also charge less. The average inflation-adjusted airfare fell 30% in the last twenty years.

Even after you account for add-on fees, it’s still cheaper to fly than it’s ever been. Still, most passengers haven’t lowered their expectations accordingly. Of course, it is not too much to expect that no one will physically drag you off the plane. The way Dao was treated was horrific and inexcusable.

But even if the situation was handled terribly, United was within its rights to demand the seat. Overbooking—or in United’s case, bumping passengers for flight staff—is one reason why fares are low in the first place. The current system allows airlines to reduce delays and charge lower prices overall.

About 40,000 ticketed passengers were involuntarily bumped off US planes last year. The denial rate has been fairly steady over the last twenty years.

United accounted for 3,765 of passengers denied boarding in 2016, out of more than 86 million fliers—roughly inline with the industry average, as it has been for years.

The sad truth is that airlines single out passengers they think are more expendable and less valuable as customers—the people who have discounted ticket and no frequent flier status. Airlines make most of their money off their loyal business fliers. They are less price sensitive because someone else (their employer or clients) pays for their travel.

Higher fare classes and frequent fliers pay more, but they also are treated with more courtesy. In that way, the economics of airlines are a reflection of the entire modern economy: Consumers are offered more than ever before, often very cheaply, but at the price of cruel indignity to many.

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