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Angst and outrage

From viral Internet videos to bluster on Capitol Hill, the airline industry — and United Airlines in particular — has taken a beating.

A series of public relations faux pas by United, capped by the unceremonious removal of David Dao, who was dragged off an overbooked plane in Chicago, set off a torrent of memes, boardroom rants and congressional venting as airlines were put on notice.

In recent weeks, United announced a slew of changes. Among the new policies that already have gone into effect or will this week: Customers will receive up to $10,000 when they give up seats on overbooked flights; passengers will not be removed once seated unless there is a safety or security issue; overbooking on the final flight of the day and on busy routes will be reduced; and crews will be booked onto flights an hour prior to departure.

Other airlines scrambled to get positive press. Delta Airlines gave agents flexibility to offer up to $9,950 in compensation to deal with overbooked flights. Southwest Airlines said it will no longer overbook flights. And American Airlines announced raises for its front-line employees.

Still, when United CEO Oscar Munoz and other airline executives appeared on Capitol Hill this week, they were met with stinging rebukes.

"If airlines don't get their act together, we are going to act," said U.S. Rep. Bill Shuster (R-Pennsylvania), chairman of the House transportation committee. "Seize this opportunity because if you don't, we're going to come, and you're not going to like it."

Yet with all the outrage, calls for legislation and traveler angst, industry observers don't expect the landscape to change.

Seth Miller, a contributing editor for Runway Girl Network, which tracks the air travel industry, argues the industry and culture have been on a collision course for some time.

"There has been a lot of potential for a watershed moment, given the developments in recent years in air travel experience," Miller said.

He points to more seats fit into planes, more people on each flight and the unknowns when travelers arrive at the terminal.

"Passengers are feeling that squeeze, and a lot more pressure," Miller said. "They're not sure about baggage fees when they arrive at the airport, security line lengths, whether they get a snack, is there a TV screen at their seat, or internet, or none of that on the plane."

The post 9/11 security element cuts in multiple directions, Miller said.

"Going through TSA leaves everybody feeling a little defensive and on edge," he said. "There's the uncertainty if they will catch terrorists, while at the same time am I going to get patted down or are they going to take away my lunch."

That angst overlaid on an increasingly polarized country sets the stage for the unseemly to happen.

"More people are convinced of their own position on nearly everything, and that includes travel," Miller said. "It all adds up to an experience that is much more stressful than a decade ago."

The resulting social media, corporate earnings, entitlement and security mix led to an undesirable end — in this case, Dao's removal at O'Hare airport.

"It all combined into a powder keg, where it was only a matter of time," Miller said.

Former U.S. Travel Association Chair and Travel Oregon CEO Todd Davidson said the severity and rarity of the incident on United Flight 3411 seared the moment into the American traveler's psyche.

"This is not a daily occurrence, but it was incredibly severe," Davidson said. 

Airlines are not alone in overbooking, he said. Hotels and restaurants do it as well.

"Obviously there are last-minute cancellations, which is why airlines do that," Davidson said. "We as consumers do have things come up to cause us to cancel at the last minute. So in order to optimize revenue, airlines and other parts of the industries have gone to these overbooking policies."

Ed Perkins, Ashland-based air travel writer, disagrees with many of his peers about overbooking.

"The fact is overbooking rules have worked quite well," Perkins said. "They were stupid when instead of hiking their offer, they called the cops."

Perkins said there are two pain points for travelers that need to be addressed: excessive ticket change fees and the density of seating.

"From a financial standpoint, ticket change fees are the most important pain point, because it's not a one-off deal," said Perkins, a frequent flier to Asia.

He said most airlines charge a minimum of $200 to change routes or flights, ranging up to $700 on some international tickets.

"It's all crept up very gradually," Perkins said.

Decades ago, a doctor's note or funeral home certificate was good enough to trigger a refund, he said. "But when technology came along and desktop forgery came into place, they found out it was totally unpoliceable. So the fees that were originally $25 kept bumping up over the years. When you're talking about families with a couple of kids, that's a lot of money."

Perkins also challenges the airline industry's assurance that a plane with ever-more seats can be evacuated within the mandated Federal Aviation Administration time frame.

"People are concerned, and genuinely so, that cabin density is so high that an airplane can't be safely evacuated in a survivable accident within 90 seconds," he said. "There haven't been too many demonstrations of people in a mock-up airplane to see how fast they can get out, especially when you take panic, fire and smoke into account."

Price-driven consumers have something to do with crowding, he said.

"American travelers who complain about poor seating in coach class demonstrate with their dollars they are willing to put up with anything to knock a few bucks off airfare."

Shareholder pressure to squeeze every penny to the bottom line, pitted against customer desire to spend as little as possible en route to their destination, creates friction from the moment online tickets are secured until the carry-ons are safely stowed in overhead bins.

The conundrum was created when stiffening baggage fees prompted passengers to carry more with them on the plane, Perkins said.

"When you have more carry-ons, it often delays departures," he said. "Oftentimes, overhead bins are 100 percent full when only 60 percent of the passengers are on the plane."

Alaska and Delta are among airlines checking carry-on baggage at the gate on smaller planes to avoid bin wars. Other airlines now charge for carry-on luggage.

Perkins cites an ongoing battle between Southwest Airlines President Gary Kelly and Wall Street investors over the company's two free bags policy.

"Wall Street types say they're leaving money on the table, but he's pushed back with studies showing they are getting more market share," Perkins said.

In general, Perkins argued, the degree of control investment groups have over airlines isn't healthy.

"Wall Street institutions have a big enough investment position they can be heard at the board of directors level," he said. "It's a backdoor monopoly because they can tell the airlines at the board level what they can do, and they tell them all the same thing."

Even though Congress dressed down industry executives this week, Perkins doubts it will do little more than stir the pot.

"I wouldn't be surprised to see an innocuous bill out of Congress," he said. "But airlines aren't going to change their position on ticket change fees."

The perception that airlines are more attentive to Wall Street than passengers has opened the door to alternative approaches.

Rudd Davis formed alternative air service firm Blackbird in California last year, coupling charter companies and municipal airports.

Blackbird now offers flights, beginning at $175, to places such as Palo Alto, Tahoe, Monterey, Santa Monica and Palm Springs. Davis hopes to expand well beyond California, capitalizing on 2,100 charter companies with 10,000 planes.

"We need to move across the country to get where we need to go in order for the economy to grow," Davis said. "But we all fly anticipating the worst possible experience, and that's unfortunate."

He said the industry is hefty enough that it can stand shoulder-to-shoulder to resist most changes.

"There will be a lot of saber rattling and outrage for the next few months, but the sad truth is nothing will really change," Davis said. "The problem is that we've allowed massive consolidation in the airline industry. As as a result, we have no choice — as consumers we can't vote with our wallets because we haven't had good alternatives. It's very difficult to start up an airline in the U.S., or anywhere in the world, because of the capital requirements. The last entrant was Virgin America (which was recently acquired by Alaska Air Group)."

When the final mi culpa has been said and posturing comes to an end, don't look for a transformation.

"Airlines may be a little nicer across the board, but the day-to-day travel experience will be very much like it was," Miller said.

Davidson said time will tell whether the negative attention will bring about long-term positive results.

"I know that people are pledging to do something, and I know there are people who want to hold them accountable, including Congress," Davidson said. "A year from now we will have to look back to see what we think has changed, if anything."

With the Medford airport being a spoke in a hub-and-spoke system, not much will change in the Rogue Valley, Perkins said. Departures will still be timed to fit into the schedules on the other end of the flight, and whatever consumer battles are won or lost will trickle down.

"We're immune to the capacity constraints of large airports," Perkins said. "But small airports all over the country, like Medford, are really the tail of the dog; and we don't wag the dog."

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.

An Alaska Airlines plane prepares for takeoff from the Rogue Valley International Medford Airport on Thursday. With Medford being a spoke in a spoke-and-hub system, not much will change here, experts say. Mail Tribune / Jamie Lusch
Passengers wait to check in at the Medford airport Thursday morning. A congressional committee has threatened airlines to get their act together or 'we are going to act.' Mail Tribune / Jamie Lusch