The Root Cause of the United Airlines Incident is a Govt Pricing Regulation

Posted on April 12th, 2017 (0 Comments)

While there are varying opinions about the actions of the passenger who was dragged off a United Airlines flight on Sunday, his defiance highlights an injustice regularly practiced by airlines: involuntary bumping. 

My latest digital article for the Harvard Business Review discusses why overbooking makes sense, but when airlines lose on their bets (more passengers show up than available seats), they need to solve their problem using the free market. A key problem is the U.S. Department of Transportation has put in place regulations that curb an airline’s responsibility for overbooking and in the process, actually encourage airlines to involuntarily bump passengers.