Airline Management – A Case Study in Incompetence

In Which Mrs. Dismal Political Economist Has a Bad Airline Day

Recently Mrs. Dismal Political Economist had occasion to travel from Boston to Knoxville, via a connecting flight in Charlotte.  (In the south if you die and get to go to heaven you have to change in Atlanta or Charlotte.)  She arrived at Logan Airport early, so early in fact that there was a flight leaving for Charlotte before her scheduled flight.  She inquired as to whether or not she could take the earlier flight, was listed on stand-by and got on the earlier flight.

This resulted in Mrs. DPE having a similar situation in Charlotte.  She inquired about taking an earlier flight to Knoxville than the one she was listed on, particularly since the one she was listed on was already showing an ominously unexplained delay.  She was told yes there is an earlier flight, yes there are seats available and she could get on the earlier flight.  And oh yes, there was also a $50.00 charge for changing the reservation – because there were seats available.  Indignant, as she was entitled to be, Mrs. DPE declined to pay the extra $50.00 and decided to stay with her original booking.

Now the economics of the airline industry are not difficult.  The industry sells seats on its scheduled flights.  These seats are one of the most perishable items in existence.  An empty airline seat prior to the flight is worth hundreds, and in some cases thousands of dollars.  After the gate has closed the value of an empty seat drops to absolute zero, nada, nothing. 

So in attempting to switch to an earlier flight Mrs. DPE was actually helping the airline.  It was trading a seat in a later flight for a certain-to-be empty seat in the earlier flight.  The freeing up of a seat in the later flight meant that seat was available for sale, which could generate several hundred dollars for the airline.  The worst case for the airline, that the later seat would stay empty meant that they neither gained nor lost on the transaction.  Either way they had an empty seat on a flight to Knoxville.  Now when the choice in making a decision is between a certain loss vs. taking a potential gain or at the worst, being no worse off than you were before, the obvious decision is to take the second option.  Obvious to all except airline management.

And what happened on the scheduled flight to Knoxville?  Well, the plane was at the gate ready to go but there was no crew to operate it.  So Mrs. DPE arrived in Knoxville many hours past the scheduled arrival time.  She was not happy. 

The concept that a crew must be available for a scheduled flight is not a difficult one.  It is not brain surgery, it is not rocket science, it does not take a Ph. D. in economics, it does not involve complex econometric modeling, simulation and even excessive thinking.  It is basic commons sense a characteristic that is usually required for advancement in management in every industry except apparently the airlines.  

Fortunately there is a solution for the airlines.  Quit having your major managerial recruiting take place at the Annual Meeting of the Association of Village Idiots.

We will withhold the name of the offending airline, since the belief is that any airline would have acted the same way.  We will say that in an earlier incarnation they were known as Agony Airlines by their regular fliers for their lack of customer service.  Apparently things have not changed all that much.