A Note on a Private Property Society and the United Airlines Passenger Forcibly Removed

By Robert Wenzel

In the comment section to my post, VIDEO United Airlines Solves Overbooking Problem: Has Cops Drag Bloodied Passenger Off Plane, a number of readers suggest that United had the "right" to evict the passenger from the plane because the plane is United's property.

I agree partially with Dr. Walter Block's comment on this:

 Some people think that private property rights give United the right to remove any passenger from any flight for any reason since they owned it. Not so. Of course, they may do so to an unruly or threatening passenger, but that was not true in this case. The passenger in question did not become violent until the authorities tried to remove him forcibly, and improperly. In effect, this passenger “rented” a seat on that plane, and, as long as he abided by the contract (sit quietly, behave, etc.) they had no right at all to expel him from the plane. 

This I agree with (except for the "improperly" part), but Walter also said:

 In my view, United had no right to remove any paying customer to whom they had issued a ticket, merely because they were overbooked. 

This I disagree with.

I take the opposite view and it goes back to Walter's comment about contract.

The ticket purchase contract has a clause which states a person can be removed from a plane because of overbooking. The great Bob Roddis even found the clause online: RULE 25 DENIED BOARDING COMPENSATION.

Now just because a clause says you can do something doesn't necessarily mean you should do it.

Stopping a person at the gate is one thing but after the person is seated it is another to toss him off, It's a terrible thing to do. If you are offering people $800 and a hotel room to get off the plane and no one is budging that tells you all the passengers were very serious about getting to their destinations.

I generally don't pay attention to the announcements when they offer money or vouchers to get off a plane but if I heard $800 and I wasn't in a hurry I would take the $800 and the hotel room.

To actually call the police and muscle a guy off is pretty insane and not good customer relations as United now surely understands. In the wake of the public relations disaster, in trading on Tuesday United stock lost $255 million in market capitalization.

That cell phone cameras have been around for a few years with users very comfortable recording anything that goes on around them, clearly, this was an unusual event. I have never seen it on video before.

In other words, we live in a world of disequilibrium where not all possible outcomes can be considered in advance. This was an outlier event.

That said, I guarantee you that United and every other airline is having meetings right now on how to handle such situations in the future. Airline shareholders are not big on $225 million in market capitalization declines.

In a Private Property Society, such an event would be fixed by the markets. If it was a major problem that was persistent and passengers were concerned, airline(s) would offer "guaranteed seating" where you would never get bumped.

You know, a revenue generator for an airline, sell both non-bumpable and bumpable seats at different prices.

But involuntary bumping really doesn't happen very often.

According to the Bureau of Transportation Statistics, a total of 613 million passengers were carried by the largest U.S. airlines for domestic flights and there were only 46,000 involuntary bumps. That's 0.0075%. Pro tip: Involuntary bumping is a very rare event, don't buy the higher priced non-bumpable ticket of the future unless you absolutely positively have to be somewhere on time.

Taking this discussion a bit further, in a private email, Rick Miller writes:

I have noticed a theme among libertarian commentators that the proper procedure from United should have been to offer more money until someone volunteered to leave the plane.

I wonder why so many are honing in on the airline upping the ante as the Right thing to do?  Though that approach is fine, it is merely one of several possible responses that are available for the property owner to employ from the libertarian perspective- including bumping the passenger involuntarily per United's agreement.  Suggesting that someone other than the customer and the airline should set the terms of the agreement cannot be seen as libertarian. 

At the root of this is a misunderstanding about how the libertarian should feel about coercion- it is only disallowed upon an innocent.  Ejecting a passenger can get ugly, indeed- but the terms were agreed to by the passenger.  United was not in the wrong to deny the flight to the passenger, who should have left at once.  United, having determined to eject the person should be allowed to do so on their own terms.

Miller is technically correct here. But in a PPS you are generally going to see peaceful resolutions to problems. No one is going to want to deal with bullies (except maybe other bullies). So while I don't see government setting any rules for private property (or doing anything) in a PPS, I don't expect the world to turn into a mirror image of San Francisco's Tenderloin district.

The United incident was an oddity and you can be sure at future flight attendant 101 courses a better way to handle such situations will be taught. Businesses don't want problems and escalations (unlike government police) it is not good for business. Hotel employees, for example, are very skilled at defusing situations. They are trained to do so.

If there is a problem with United, it is that since this terrorist scare and the birth of the TSA, United has gotten much too comfortable with the belligerent government backup whenever there is any passenger gripe.

I personally would like to see the TSA gone and flight attendants back to looking young and being pleasant.

And I really would love to see a PPS because that is when businesses will really respond to customer desires.

Robert Wenzel is Editor & Publisher of  EconomicPolicyJournal.com and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics, on LinkedIn and Facebook. The Robert Wenzel podcast is on  iphone and stitcher.