By now, many of us have viewed the disturbing video of a bloodied man being dragged off of United Airlines flight 3411 from Chicago to Louisville on Sunday. To accommodate four crew members who had to get to Louisville, United claims it offered $1,000 per passenger to relinquish their seats (other reports claim United offered $800). When not enough people volunteered, instead of raising the bounty, United opted to play hardball by involuntarily kicking customers off its plane.
Airlines Like United Can Underpay Bumped Passengers Because of a Government Rule
Let the market rule instead.
April 12, 2017
Summary.
A disturbing video of a bloodied man being dragged off of United Airlines flight 3411 from Chicago to Louisville has thrust the common airline practice of overbooking into the spotlight. Some have even called on the government to ban the practice. But overbooking allows airlines to keep fares lower and serve passengers more flexibly. The problem is really with a Department of Transportation rule that puts a cap on what passengers can be paid for their trouble; this rule encourages airlines to bump the flyers who paid the least for their seats, and also distorts the market forces at work when an airline is trying to get people to voluntarily give up their seats.