Should Government Intervene on Airline ‘Re-accommodation’? – UPDATE

Government Intervention not the Solution for United Airline 'Re-accommodation'

United Airplane, Photo credit: Drewski2112 via Visualhunt.com / CC BY-NC

It’s not surprising that some politicians and commentators are calling for more federal regulations for airlines after news broke that a passenger was forcibly dragged off a United Airlines flight because he refused to give up his seat. More oversight might sound good right now, but before we all overreact, perhaps we should remember one little acronym: TSA.

In the wake of 9/11, politicians quickly moved to put TSA under federal control, despite the overwhelming advice from other countries with more experience fighting terrorism to keep it privatized. If you’ve flown much in the last few years, you know how that’s worked out.

It’s not that the federal government shouldn’t run anything, but that in most cases the free market works just fine. And I believe it will work just fine in the United situation.

Airlines are in an industry filled with regulations and procedures, but their success, like the success of most companies, is tightly tied to remembering that their customers are human beings, not just a number.

United Airlines CEO Oscar Munoz no doubt knows this. “Treating our customers and each other with respect and dignity is at the core of who we are,” he said, “and we must always remember this no matter how challenging the situation.”

On the other hand, he defended the decision to drag the man off the plane, saying the employees followed protocol. And he described what happened by using the word “re-accommodate” – as if they were doing the man a favor.

As you might expect, Munoz hasn’t come off well in the media, social or otherwise.

Why? Because he has defended policies over people. He focused on the passenger’s reactions and response (“he raised his voice and refused to comply … and became more and more disruptive and belligerent”) rather than the passenger’s needs or the fallout that would come with using such force in this situation.

Now Munoz and the entire airline is dealing with the inevitable backlash that screams, “Your people should have known better.” And the PR hit will cost them. Some travelers are promising not to fly United, although that’s an easier option in some cities than others. But there’s no doubt the fiasco will affect how customers see United. It also will impact their stock price. By early afternoon Tuesday, in fact, the stock had dropped 3.1 percent, whipping out more than $600 million off its market cap. The airline also will no doubt reach a settlement that compensates the passenger, and you can bet it will far exceed the $400 to $600 that was he was reportedly offered to give up his seat.

Frankly, more governmental regulations won’t help.

What’s that look like in this situation?

Perhaps they should have made an announcement along these lines: “Ladies and gentlemen, we won’t drag anyone off the plane to free up a seat, but we can’t leave Chicago until we get a volunteer. So none of us can leave unless someone agrees to stay.”

Perhaps they should have offered more money to get a volunteer to deplane. Perhaps they should have found another way to fly their employees to Louisville, which was the reason they needed the seat. Perhaps they should have planned better in advance.

The thing is, it doesn’t really matter. The next situation won’t look exactly like this one, so the solution will need nuances that none of us can foresee. With the right training and the right back, however, the employees who face it can make decisions that truly treat their passengers with respect and dignity. And I’ll be shocked if they need more government regulations to tell them that means they shouldn’t drag a passenger off the plane.

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UPDATE, April 27th:

This morning, I received the following email message as a United Mileage Plus member. What do you think about this change in attitude?

Dear Mr Rakowich,

Each flight you take with us represents an important promise we make to you, our customer. It’s not simply that we make sure you reach your destination safely and on time, but also that you will be treated with the highest level of service and the deepest sense of dignity and respect.

Earlier this month, we broke that trust when a passenger was forcibly removed from one of our planes. We can never say we are sorry enough for what occurred, but we also know meaningful actions will speak louder than words.

For the past several weeks, we have been urgently working to answer two questions: How did this happen, and how can we do our best to ensure this never happens again?

It happened because our corporate policies were placed ahead of our shared values. Our procedures got in the way of our employees doing what they know is right.

Fixing that problem starts now with changing how we fly, serve and respect our customers. This is a turning point for all of us here at United – and as CEO, it’s my responsibility to make sure that we learn from this experience and redouble our efforts to put our customers at the center of everything we do.

That’s why we announced that we will no longer ask law enforcement to remove customers from a flight and customers will not be required to give up their seat once on board – except in matters of safety or security.

We also know that despite our best efforts, when things don’t go the way they should, we need to be there for you to make things right. There are several new ways we’re going to do just that.

We will increase incentives for voluntary rebooking up to $10,000 and will be eliminating the red tape on permanently lost bags with a new “no-questions-asked” $1,500 reimbursement policy. We will also be rolling out a new app for our employees that will enable them to provide on-the-spot goodwill gestures in the form of miles, travel credit and other amenities when your experience with us misses the mark. You can learn more about these commitments and many other changes at hub.united.com.

While these actions are important, I have found myself reflecting more broadly on the role we play and the responsibilities we have to you and the communities we serve.

I believe we must go further in redefining what United’s corporate citizenship looks like in our society. You can and ought to expect more from us, and we intend to live up to those higher expectations in the way we embody social responsibility and civic leadership everywhere we operate.

I hope you will see that pledge express itself in our actions going forward, of which these initial, though important, changes are merely a first step.

Our goal should be nothing less than to make you truly proud to say, “I fly United.”

Ultimately, the measure of our success is your satisfaction and the past several weeks have moved us to go further than ever before in elevating your experience with us. I know our 87,000 employees have taken this message to heart, and they are as energized as ever to fulfill our promise to serve you better with each flight and earn the trust you’ve given us.

We are working harder than ever for the privilege to serve you and I know we will be stronger, better and the customer-focused airline you expect and deserve.

With Great Gratitude,
Oscar Munoz
CEO
United Airlines

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Comments

  1. Len McCreary says:

    I think the matter should absolutely be handled by voters. Voters with dollars, who cast a vote every time they choose to spend or retain a dollar.

    Commonly, laws are created in the absence of morality or ethicality. Someone is the victim of an immoral act, and someone else drafts language to make the immoral act punishable. It sounds honorable enough, but there is a fascinating litany of unintended consequences.

    The overarching consequence is that much of the population gradually loses sight of the differences between what is morale, ethical, and legal. Acting in an immoral or unethical way doesn’t necessarily levy a fine or mean a trip to jail. Acting in an *illegal* way carries punishment. The consequence is that morality and ethicality are replaced by legality, and legality is a poor replacement for human decency. People are further confused when they can receive fines for nonmoral infractions, like traffic violations. Worst of all, sometimes the morale thing to do is illegal.

    The manifestation is when you start to hear people say things like, “It’s legal, ain’t it?” …Usually the same folks who say “Well, it’s free country.” I’ve never heard anyone say those things after they held the door for me and I said, “Thank you.” Or if I complimented their shoes.

    For fun, let’s walk through a few government-intervention scenarios.
    – First, let’s say the government prohibited United from ejecting this customer. What would be a “fair” penalty? I doubt it’d be a $600M fine, which is merely the part the shareholders voted for. Customers also got to vote. And will continue to vote for many years. Some for life.
    – Second, same situation, but instead of the $400-600 United was offering the customer, let’s say the government underestimated what was fair. They made it $100 fine; to boot a customer, the airline would have to give the customer another ticket, plus $100. Well, now it got cheaper to boot customers, so expect the booting instances to increase. And now the airline will have even less regard for the customer, because they’re excused by what the law says is “fair.” They’re just being fair.
    – Third, taking the same situation a bit further, let’s say the customer still resists the legal request. What then? Does a militarized SWAT team board the plane like a Somali pirate hostage situation to extract the customer and “neutralize” the conflict? Does the customer who paid for a ticket and sat in the seat assigned to him per his agreement with the airline get charged with a federal crime?

    I don’t mean to sound anti-government, because I’m not. I’m merely suggesting that laws in most consumer affairs can actually lead to worse treatment of consumers. What laws would come next? Would the government start setting fares, schedules, and routes? How would that work? …Oh wait, we know exactly how that’d work.

    ________

    While I’m glad United wants to improve their culture, I have problems with their language, “…how can we do our best to ensure this never happens again?”
    1) Don’t do your best. Either do it or don’t.
    2) Set your goals higher than “never treat a customer so poorly that it makes national headlines and we have to issue press releases and apologies and people start suggesting federal regulatory intervention.” That’s a pitiful bar.

    Rather than confusing your 87,000 employees and forcing them to wrestle an on-the-spot moral dilemma of whether they’ve “tried their best” before enraging a customer, simply make it known and credible that customers *are* the first priority and empower employees to come up with creative solutions consistent with the message. Then reward and make positive examples of those who went above and beyond to thrill now-customers-for-life. United won’t be paying out many $50,000 checks to booted customers before they figure out how tweak the scheduling system and deliver a consistent message to their employees. Inspire your people, United! Take a couple flights on Southwest to see how they’re doing it!

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