DOA
3 months ago
 

A perspective on the United Airlines story

Like many people, I have watched with somewhat sad feelings the giant mess that has been United Airlines and Dr Dao’s removal in Chicago recently.

Rather than just throw more rocks at the poor folks at United I would like to comment on the issue in a dispassionate way, look at some of the underlying causes and perhaps find a way to address these in a positive manner.

For perspective, I have been in the industry for many years, occasionally working for an actual airline or two. But in my group’s consulting practice and software businesses I have to deal with the operational sides of what the airline does, from an IT perspective.

This unfortunate issue could have occurred on a regular or a storm related day. The occasion should not matter – so in my view there were few to none mitigating circumstances.

Full time

With current global load factors in the 80%+ range, airlines are operating on very tight margins and must accept the consequences of when things go wrong.

Load factor is gauged on actual fare paying passengers. In the United case, the aircraft in question was an EMJ-170, a 72 seat aircraft. Thus four passengers (the deadheading flight attendant crew) coming on at the last moment was a 6% differential. My point is that if you assume that number on average then published load factors under-report how full a plane might be.

System error

I have to say that those who try to defend United are wrong for multiple reasons. Here is an example from “The Street

This assessment and others was not taking into consideration the failings of an already flawed system.

But that doesn’t excuse the behavior nor will it let United off the hook.

Why? Allow me to explain.

Airlines (who are my customers as I am theirs) have for years (particularly in the US where regulation is a mishmash of contradictory and overly complex points) hidden behind the assumption that, for safety reasons, they are all-powerful and passengers must comply with anything the airline says.

A careful read of the FAA regulations (not something I recommend particularly) reveals the following FAA document.

This would illuminate the issues regarding the now infamous Rule 35 removal.

The term “belligerent” that has been used – including in United’s CEO’s pronouncements is quite specific –  the only reason a passenger can be removed, according to these FAA rules, is if they are being belligerent.

Interestingly when challenged on television, Munoz stated that no fare paying passenger would ever be removed from an United flight. He has set himself up for failure. He should have added that this is subject to clear security concerns.

What has happened here is a mainstream exposure of just one of the many issues in the airline industry that are not good for passengers. Specifically, airline relationships known as codeshares.

Cracking the code

This is the arrangement whereby one airline allows another airline to use the same codes. For clarification there really are two forms of codeshare arrangements. One where there are two operating brands – for example Lufthansa and United – the other where one airline (such as United) contracts out some of its flying to a smaller carrier for economic reasons (in this case, Republic).

These two types of codeshare should not be lumped together but they are.

Allow me to get specific.

It could be argued that United was not legally responsible for the fracas that happened – details to come. The management of United could have hidden behind their legal position, but not owning up to that could actually be worse than admitting that something wrong happened.

Why? Because it would expose the dirty secret that codeshares are not the same as the service offered by the airline selling your ticket.

The regulators have tried for years to address this problem and in the face of the complexity have demurred. Perhaps now it should be dealt with it.

In regular business, the person who sells you the product is on the hook for the product liability. That is business and contract law 101. Airlines in codeshares skirt that issue. For the passenger it should make no difference. But legally it does.

For the consumer –  if it looks like a duck (its painted in the parent carrier’s livery) walks like a duck (operates on routes that are on a parent carrier’s flight number) and quacks like a duck (the flight attendants and pilots speak and wear the same uniforms like they are from the parent airline) then it is a duck.

Paper trails

The binding document that governs what happens to us passengers is contained in the Conditions of Carriage (CoC). This is something that we all agree to and it has a legal disclaimer in all cases. But airlines are not great in disclosing the legal terms.

For example, there are two contracts relevant to website bookings. One for the website use and sales conditions (whether direct or indirect via a travel agency) – the other is for the conditions on which you as a passenger agreed to fly, the CoC.

United, just to make things even more complicated, has another agreement for online sales.

I would defy even the most arcane lawyer to figure some of this stuff out.

Here are the relevant documents that are supposed to explain this all to you in legalese. For reference I am including both the United ones and the CoC for the actual operating airline who was responsible for the flight: look at the section marked codeshare

United Airlines legal agreement for US passenger traffic (look at the section marked codeshare)
United terms and conditions
United Conditions of Carriage
United list of code share commuter carriers
Republic Conditions of Carriage:
(check out Rule 35)

In this case, in my view legally, United is off the hook because it was a Republic-operated flight.

My assessment (and I am not a lawyer) is that United did do something wrong – failing to adequately disclose that formally, it was Republic’s conditions of carriage that would have superseded its own. For this transgression it is likely to get fined.

I note this because United doesn’t list Republic as one of the carriers whose conditions might supersede United’s, at least not in the formal legal disclosure part. It does list a predecessor airline but DoT will find that a transgression.

Full disclosure is required even if it’s buried.

United is not the only airline which does this and, if nothing else, all airlines’ CoC should be monitored. Failing to keep it up to date should be regarded as a legal failure and subject to a regulatory disciplinary action.

Lawyers will have a field day with this as they can now bring a case against both United and Republic (in addition to the other parties involved in this case).

Captain speaking

The only person who could legally authorise the removal of the passenger was the captain. There are a lot of things that went wrong here. But we know that safety is not supposed to be compromised  –  in the air but also on the ground. When the aircraft is active and the pilot has to be on board he or she has the responsibility. That is a cast iron rule.

United and Republic both failed to consider the safety of the passenger in question. We have not heard anything from Republic on its responsibility in this matter. Dr Dao had a legal right to be there. United and Republic only had the right to remove him if he failed to meet certain conditions. Those conditions didn’t seem to have occurred here – something that everyone seems to agree on.

Next steps

Rather than say United and other airlines are all bad – let’s look for things that should be fixed and reasonably so. Here is a partial list of actions that FAA, United and other airlines should undertake for the future.

1.    Each airline should have a clear line or responsibility for the actions on the plane. If the aircraft is painted in United colours, if the aircraft is under contract to United then the responsibility should be 100% United. No exceptions.

2.    There should be a clear differentiation in the codeshare world as I noted in the introduction. There needs to be a distinction for contract (typically commuter) carrier flights versus a major partner branded flight such as a United flight operated by Lufthansa. When this is a contract relationship such as the Republic case –  the parent selling carrier must accept full responsibility for the actions of its staff – any disclaimer for commuter flights should not be allowed.

3.    All airlines should have a new policy that permits the correct authority to compensate up to the legal domestic $1350 cash not the current authorized $800 (in credit NOT cash) that the many airlines operate under today.  That authority should be delegated to the gate agent or an instantly available supervisor. I note that in the wake of this incident Delta modified its policy and raised the amount. Just don’t think they did so without throwing in some extra conditions!

4.    Once the aircraft is loaded passengers should have a clear right to know what can happen. Paying passengers should never be offboarded. (I will make some exceptions which is airline non-essential personnel or any standby passenger) except for legitimate security concerns.

5.    Offboarding should be regarded as an FAA transgression for which the airline should be fined. Note that this is different from overbooking (actually more accurately overselling) where the problem occurs before the flight is fully boarded.

6.    All airlines should improve the operations implementation that could have prevented this from happening in the first place by having the four flight attendants go to where they had to go by car or other means.

7. The  captain must personally come out of the cockpit and deal with the issue, as he is legally required to do so. It does not appear that he did so in this case. Either way either the clear policy needs to be available and the decision maker should be the captain.

8.    Airlines do have differing policies on removing people from aircraft. This should be standardized. That is a matter of safety and consumer protection as well as common sense for the airlines.

9.    United’s PR department and those who recommended that the CEO’s correct response was to defend the employees first should rethink their crisis communications. This was clearly mismanaged.

10.    United’s response to these incidents needs to be documented and an immediate response to the situation be clear but accept the customer is right as a principle.

Passengers, right

One lesson learned from this whole episode for passengers; read the documentation and know your rights. Know what clicking that little box online actually means to your rights when flying.

One lawyer I know recommends a few simple rules.

1.    Don’t antagonize the airline staff. Whether they are right or wrong – they don’t necessarily know what is right but they will act as if they do

2.    Be clear and calm when dealing with an airline representative. The entire process leading up to boarding an aircraft can be stressful. Try and avoid becoming too agitated.

3.    If the airline insists that you deboard or denies you boarding in the first place– ask for the formal rules that require you to not get to your destination as you assume you contracted. In Europe there are specific requirements which are much clearer.

Earlier this week the DoT updated its “Got Flights? Know your rights” page.

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Timothy O'Neil-Dunne

About the Writer :: Timothy O'Neil-Dunne

Timothy O'Neil-Dunne is the managing partner for venture firm VaultPAD Ventures– an accelerator devoted exclusively to Aviation Travel and Tourism.

VaultPAD also is the parent company for consulting firm, T2Impact. Timothy has been with TNooz since the beginning, writing in particular aviation, technology, startups and innovation.

One of the first companies to emerge from the accelerator is Air Black Box. a cloud-based software company providing airline connectivity solutions and in production with airlines in Asia Pacific.

Timothy was a founding management team member of the Expedia team, where he headed the international and ground transportation portfolios. He also spent time with Worldspan as the international head of technology, where he managed technology services from infrastructure to product.

He is also a permanent advisor to the World Economic Forum and writes as Professor Sabena. He sits on a number of advisory and executive boards

 

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  1. Timothy O'Neil-Dunne

    Is all’s well that ends well? United is trying to do its damage control. New policies new processes.
    US Congress trying to get into the act and the airlines demonized. Its actually good to see that some of my recommendations are included. This will go away eventually but on the web everything lives forever. Now UA will forever be the guitar loosing, legging banning, pax dragging airline.
    Cheers

     
  2. jbelkin

    This the main issue with this scenario.

    Imagine this scenario in a restaurant. They seat you and take your order. Then they come and tell you it’s employee meal time and and employees need your table to eat their meal. You have to get out. What would you think of this restaurant?

    This was United’s policy.

    It’d be one thing if you got bumped at the gate – wee hate it but we accept it but it’s another to be told to get out because an employee is more important than you.

    It’s CHICAGO. It’s not the south pole where you might have to accept being bumped.

    THERE are literally dozens of way to get to Louisville – based on the amount of UNITED will be paying and has already paid – they could have charterd a orivate jet … not to mention, paying even FULL FARE on another airline (is there relationship so bad with other airlines, no one in CHICAGO will fly a UNITED employee at a discount?) or rent them a car? Hell, a LYFT would’ve cost them less than the $10 million they will pay plus the millions in bad PR and lost business?

    Basically, the default setting was – WE NEED 4 SEATS, we will hold you hostage on the ground until we get 4 SEATS – not 3 but 4 and WE WILL F-ING DRAG YOU OFF by calling the cops.

    The cops are idiots for just following orders BLINDLY, What is the gate agent ordered them to punch a toddler, would they do it? Its the old, he said so.

    This was just idiotic in EVERY WAY – and it turns out it was nit even a normal overbooked situation but UNITED employees needing 4 seats for TOMORRW NIGHT – 24 hours is not enough time to get to Louisville from Chicago.

    And the CEO comes off as a witless wonder also.

     
    • Timothy O'Neil-Dunne

      In the heat of the moment – people make good and bad decisions. The bad process drove the bad decisions. The lack of empathy cannot be trained however.

       
  3. Timothy O'Neil-Dunne

    As a postscript to this story…
    Huffington Post published a story a few days that sounds similar. But its very different. Here is the original story. http://www.huffingtonpost.com/entry/my-mexican-husband-was-accused-of-trafficking-our-daughter_us_58f4adade4b01566972250cf The contributor was the wife/mother of the passengers in question. The story was spun obliquely at United. However – in this case United was doing the right thing and following protocol. Actually the parents in question at this time should be better armed with the information they need. Airlines do not do a good job in handling how things are addressed with all regards to the various regulations. If the father had the full documents he should have been able to show them and that would have been the end of the matter.
    Simply following good guidelines put out by the US embassy would have solved this issue. If you are travelling with a child as a single parent particular across state and national borders you have to be careful. Hardly anyone cares to know these things but you should. http://www.minitime.com/trip-tips/Single-Parent-Think-Passport–Paperwork-article is a good article to read. Formally the US embassy in Mexico has the following advice. https://mx.usembassy.gov/implementation-of-mexican-regulations-regarding-minor-travel/
    Moral of this story – know what you are supposed to do BEFORE you go. Oh yes going back to US State lines, there are regulations about transporting minors. You had better know the answers. https://forum.freeadvice.com/juvenile-law-90/crossing-state-lines-minor-284320.html Ignorance is no defense.
    And the person who reported the incident – they should be tutored in what to be involved in and what not. But that is everyone’s responsibility. Were they right or wrong? You be the judge and see if you could have done the same thing the pilot and crew could have done.
    Cheers

     
  4. Ian Tunnacliffe

    Some important points here and I am particularly pleased to see you draw the distinction between the two very different meanings of “codeshare”. Both are frauds perpetrated on consumers by cynical airline management but regulators have been too spineless to do anything about them. That said, there is a world of difference between an arrangement where two (or more) airlines choose to market a flight that is operated by one of them and the kind of service that Republic and others provide to United. This is much more like a franchise operation such as is common in many industries. When you go to buy your Big Mac the business that sells it to you is not likely to be the McDonalds corporation. Rather it is a franchisee, an independent business that nevertheless identifies as McDonalds and is required to strictly follow McDonalds’ standards and processes. It seems to me that this is the relevant model to consider when determining the responsibilities and liabilities of the players in this and other cases.

     
    • Timothy O'Neil-Dunne

      Ian – thank you. In doing the research on the story seen through United’s eyes – they in fact did not/do not discriminate between the two forms of code share. If one looks at the links then it is hard to find any differentiation. The customer is left having to figure it out. As I noted – that is really hard if not impossible. There is no customer service desk for Republic. The Franchise business has a degree of responsibility as do hotels and other forms. It is actually amazing how many services are provided not by the company who delivers the product or service to you. Does that make the brand all the less responsible? I believe the answer should be no. IE The selling brand must be responsible.
      Cheers

      Timothy

       
  5. Timothy O'Neil-Dunne

    Thanks for these comments.
    The topic is very dry. As a frequent flyer of all types of flights around the globe, I can assure you that there is a lot information are not revealed to the consumer. Much of that is obfuscated in ways that are not obvious. What I hope is that the situation changes as a result of this unfortunate incident. I could write a lot more on failures of process that Mr Munoz has already indicated has to change.
    Cheers

    Timothy

     
  6. Larry Hall

    Great article, Timothy! I appreciate your very thorough perspective.

     
  7. Prakash Patel

    Thanks Mr. O’Neil-Dunne for the interesting article that explains in simple language with examples.
    Even if the rules are presented to the passengers it won’t help as long as it is fair and not one sided.Just like when we get on internet we click to agree not knowing what is in there because who wants to read the lengthy document and who would understand the legal wording of the agreement.
    America has done very poor job of protecting the consumer compare to Europe because the politicians are under obligation by the big businesses due to the lobbying which in other countries it called BRIBERY.
    Bullying the passengers is common now. The laws does not say that one has to act ruthlessly but that is how everyone is resorting to instead of defusing the situation with cool head and some common sense. Me being a minority I am always on edge and travel with anxiety.

     
  8. Mark Lenahan

    Thanks for that Timothy. The media coverage has so far been depressing for a number of reasons, including:
    * misrepresenting this as overbooking.
    * ignoring the distinction between denied boarding vs removal.
    * interpreting CoC as overriding all consumer protection (ridiculous) and UA’s action as valid under their CoC (clearly not)
    * describing the whole incident as a PR error, and providing 20-20 hindsight vision on how to apologise, as if that was the issue.
    * in some cases, demonising Dr. Dao.

    No business should be at war with its own customers. Why is that hard to understand?

     
 
 

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