Issue link: https://industrialengineer.epubxp.com/i/826827
12 ISE Magazine | www.iise.org/ISEmagazine From the wall-to-wall media cover- age of a United Airlines passenger get- ting dragged off his flight kicking and screaming, people might not realize that the flying industry had its lowest-ever recorded rate of involuntarily denied boardings in 2016. The day before the United incident, Wichita State University's business school and Embry-Riddle Aeronautical University released their Airline Quality Rating report. In 2016, airlines denied 0.62 boardings per 10,000 passengers in 2016, down from 0.76 in 2015 – the lowest since the AQR started in 1991. To report co-author Dean Head- ley, associate professor of marketing at Wichita State University, the news about United points toward poor practices in customer service, not the much-blasted – but common – policy of overbook- ing. Headley said things went badly the minute the airline turned things over to security officers who didn't understand the situation. "They were told this person needs to get off the airplane, and they were go- ing to do that no matter what," Headley said. "United should have been in the middle of that and said, 'This is not how we treat customers.' … But they abdi- cated their responsibility, and that's the most egregious part of this." The AQR report uses four metrics: on-time performance, involuntarily de- nied boardings, baggage handling and consumer complaints. Overall, the in- dustry improved in every category, also hitting its best-ever rate in mishandled bags. Alaska Airlines topped the rating, moving up from fifth last year. United was eighth out of the 12 leading U.S. airlines. This year's rankings, with the airline's previous ranking in parentheses, are: 1. Alaska (5) 2. Delta (3) 3. Virgin America (1) 4. JetBlue (2) 5. Hawaiian (4) 6. Southwest (6) 7. SkyWest (7) 8. United (8) 9. American (10) 10. ExpressJet (9) 11. Spirit (13) 12. Frontier (11) But Headley said the United scuffle has a silver lining if it wakes the pub- lic up to how overbooking is a com- mon best practice. According to his calculations, out of 2.925 million people flying each day, only 181 get involun- tarily bumped. And flights need to be 75 percent to 83 percent full for airlines to profit, depending on fuel prices and other factors, Headley said. Overbooking didn't become so prev- alent overnight. But between 1979 and 2009, it saved the U.S. economy $100 billion, economist James Heins told the University of Illinois News Bureau in 2009. Decades ago, airlines would arbi- trarily bump passengers and create the kind of ill will generated by the United incident. So companies overbooked at a minimum and flights often fell short of capacity, Heins said. The late economist Julian Simon theorized that airlines could earn more money by increasing overbooking. If too many people showed up for a flight, the companies could offer cash or free airfare to passengers who would volun- tarily deplane. Although Simon started pushing his idea in the 1960s, it wasn't until a decade later that it finally clicked, according to the University of Illinois. The average ticket price last year was $344, down 9 percent, Headley said. If lawmakers ban overbooking, consumers should expect to pay a lot more, Headley said, "guaranteed." "Without [overbooking], the cost of the overall system will go up," he said. "Once that airplane takes off, that's a gone inventory piece. If you book a flight and it takes off half-full, you've lost half a plane full of revenue, and you will never be able to get that back again. Not on that flight. It's gone. It's a perish- able product." News from the field The front line Despite bad press, airline quality is up Industry posts best-ever results in annual report from Wichita State and Embry-Riddle Dean Headley of Wichita State University said overbooking is a common airline tactic that keeps ticket prices low while rarely causing problems.