tag:theconversation.com,2011:/us/topics/us-airlines-36198/articlesUS airlines – The Conversation2024-03-15T12:10:30Ztag:theconversation.com,2011:article/2258572024-03-15T12:10:30Z2024-03-15T12:10:30ZWhy do airlines charge so much for checked bags? This obscure rule helps explain why<p>Five out of the six <a href="https://www.oag.com/blog/biggest-airlines-in-the-us">biggest U.S. airlines</a> have <a href="https://www.cnbc.com/2024/03/05/delta-is-the-latest-airline-to-raise-its-checked-bag-fee.html">raised their checked bag fees</a> since January 2024.</p>
<p>Take American Airlines. In 2023, it cost US$30 to check a standard bag in with the airline; <a href="https://www.usatoday.com/story/travel/airline-news/2024/02/20/american-airlines-bag-fees-mileage-earning/72669245007/">today, as of March 2024, it costs $40</a> at a U.S. airport – a whopping 33% increase.</p>
<p>As a <a href="https://www.bu.edu/questrom/">business school</a> <a href="https://www.bu.edu/questrom/profile/jay-zagorsky/">professor who studies travel</a>, I’m often asked why airlines alienate their customers with baggage fees instead of bundling all charges together. <a href="https://www.vox.com/2015/4/16/8431465/airlines-carry-on-bags">There are</a> <a href="https://www.usatoday.com/story/travel/columnist/2023/06/21/bag-fees-will-stay-a-while-cruising-altitude/70338849007/">many reasons</a>, but an important, often overlooked cause is buried in the U.S. tax code.</p>
<h2>A tax-law loophole</h2>
<p>Airlines pay the federal government <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D">7.5% of the ticket price</a> when <a href="https://www.pwc.com/us/en/services/tax/library/aircraft-club-nov-2023-air-transport-excise-tax-rates-for-2024.html">flying people domestically, alongside other fees</a>. The airlines dislike these charges, with their <a href="https://www.airlines.org/dataset/government-imposed-taxes-on-air-transportation/">trade association arguing</a> that they boost the cost to the consumer of a typical air ticket by around one-fifth.</p>
<p>However, the U.S. Code of Federal Regulations <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D/section-49.4261-8">specifically excludes baggage</a> from the 7.5% transportation tax as long as “the charge is separable from the payment for the transportation of a person and is shown in the exact amount.”</p>
<p>This means if an airline charges a combined $300 to fly you and a bag round-trip within the U.S., it owes $22.50 in tax. If the airline charges $220 to fly you plus separately charges $40 each way for the bag, then your total cost is the same — but the airline only owes the government $16.50 in taxes. Splitting out baggage charges saves the airline $6.</p>
<p>Now $6 might not seem like much, but it can add up. Last year, passengers took <a href="https://www.transtats.bts.gov/Data_Elements.aspx?Data=1">more than 800 million trips on major airlines</a>. Even if only a fraction of them check their bags, that means large savings for the industry.</p>
<p>How large? The government has <a href="https://www.bts.dot.gov/topics/airlines-and-airports/baggage-fees-airline-2023">tracked revenue from bag fees</a> for decades. In 2002, airlines charged passengers a total of $180 million to check bags, which worked out to around 33 cents per passenger. </p>
<p>Today, as any flyer can attest, bag fees are a lot higher. Airlines collected over 40 times more money in bag fees last year than they did in 2002.</p>
<p>When the full data is in for 2023, <a href="https://www.bts.dot.gov/baggage-fees">total bag fees</a> will likely top $7 billion, which is about $9 for the average domestic passenger. <a href="https://viewfromthewing.com/the-real-reason-airlines-charge-checked-bag-fees-and-its-not-what-you-think">By splitting out the cost of bags</a>, airlines avoided paying about half a billion dollars in taxes just last year.</p>
<p>In the two decades since 2002, flyers paid a total of about $70 billion in bag fees. This means separately charging for bags saved airlines about $5 billion in taxes.</p>
<p><iframe id="88MYD" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/88MYD/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>It seems clear to me that tax savings are one driver of the unbundling of baggage fees because of a quirk in the law.</p>
<p>The U.S. government doesn’t apply the 7.5% tax to <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D/section-49.4261-3">international flights that go more than 225 miles</a> beyond the nation’s borders. Instead, there are fixed <a href="https://www.airlines.org/dataset/government-imposed-taxes-on-air-transportation">international departure and arrival taxes</a>. This is why major airlines charge $35 to $40 <a href="https://www.aa.com/i18n/travel-info/baggage/checked-baggage-policy.jsp">for bags if you’re flying domestically</a>, but don’t charge a bag fee when you’re flying to Europe or Asia.</p>
<h2>Do travelers get anything for that money?</h2>
<p>This system raises an interesting question: Do baggage fees force airlines to be more careful with bags, since customers who pay more expect better service? To find out, I checked with the Bureau of Transportation Statistics, which has been <a href="https://www.bts.gov/content/mishandled-baggage-reports-filed-passengers-largest-us-air-carriersa">tracking lost luggage for decades</a>. </p>
<p>For many years, it calculated the number of mishandled-baggage reports per thousand airline passengers. The government’s data showed mishandled bags peaked in 2007 with about seven reports of lost or damaged luggage for every thousand passengers. That means you could expect your luggage to go on a different trip than the one you are taking about once every 140 or so flights. By 2018, that estimate had fallen to once every 350 flights.</p>
<p>In 2019, the government <a href="https://www.bts.gov/topics/airlines-and-airports/number-30a-technical-directive-mishandled-baggage-amended-effective-jan">changed how it tracks</a> mishandled bags, calculating figures based on the total number of bags checked, rather than the total number of passengers. The new data show about six bags per thousand checked get lost or damaged, which is less than 1% of checked bags. Unfortunately, the data doesn’t show improvement since 2019.</p>
<p>Is there anything that you can do about higher bag fees? Complaining to politicians probably won’t help. In 2010, two senators <a href="https://www.nj.com/business/2010/04/us_senators_present_bill_to_ba.html">tried to ban bag fees</a>, and their bill went nowhere.</p>
<p>Given that congressional action failed, there’s a simple way to avoid higher bag fees: <a href="https://www.cnn.com/travel/article/packing-expert-travel-world-handbag/index.html">travel light</a> and <a href="https://www.nytimes.com/2023/07/08/opinion/carry-on-packing-airlines-lost-luggage.html">don’t check any luggage</a>. It may sound tough not to have all your belongings when traveling, but it might be the best option as bag fees take off.</p><img src="https://counter.theconversation.com/content/225857/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The answer lies in the tax code.Jay L. Zagorsky, Associate Professor of Markets, Public Policy and Law, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2049962023-05-07T12:38:13Z2023-05-07T12:38:13ZCanadian airlines brace for a summer of change as U.S. airlines consider reforms<figure><img src="https://images.theconversation.com/files/524221/original/file-20230503-19-okemwv.JPG?ixlib=rb-1.1.0&rect=399%2C296%2C2510%2C1836&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An Air Canada jet takes off from Montréal's Pierre Elliott Trudeau International Airport on June 30, 2022.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Graham Hughes</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/canadian-airlines-brace-for-a-summer-of-change-as-u-s--airlines-consider-reforms" width="100%" height="400"></iframe>
<p>The United States Government Accountability Office (GAO) recently issued a report <a href="https://www.gao.gov/assets/gao-23-105524-highlights.pdf">on the causes of flight disruptions before and after the pandemic</a>. The report also outlined the challenges airlines faced managing and responding to these flight disruptions.</p>
<p><a href="https://www.gao.gov/assets/gao-23-105524.pdf">The report</a> was the result of requests made by the U.S. Congress to the GAO to examine key changes in the U.S. passenger airline industry resulting from the pandemic.</p>
<p>For those of us who experienced <a href="https://theconversation.com/air-canada-flight-reductions-faqs-about-the-chaos-in-the-airline-industry-185750">the chaotic Canadian aviation environment last summer</a> — especially those that used Toronto’s Pearson Airport and Montréal’s Trudeau Airport — it is difficult to forget the lines of <a href="https://www.cbc.ca/news/canada/toronto/toronto-pearson-airport-delays-1.6481605">passengers waiting in queues for hours</a>, <a href="http://prod-test.thestar.com/news/gta/2022/06/28/you-%20think-you-have-baggage-luggage-is-piling-up-at-pearson-perplexing-travellers.html">mishandled baggage</a> and <a href="https://globalnews.ca/news/8970277/air-canada-pearson-rank-no-1-delays-worldwide-montreal-check-%20in-freezes/">unprecedented flight delays</a>.</p>
<p>For an industry with extensive regulatory oversight provided by the federal government, it has been interesting to examine and contrast the <a href="https://www.ourcommons.ca/DocumentViewer/en/44-1/TRAN/meeting-26/evidence">parliamentary efforts made in Canada to address flight disruptions</a> with similar efforts being made by U.S. Congress.</p>
<h2>Canadian airline reforms</h2>
<p>Canada’s Standing Committee on Transport, Infrastructure and Communities <a href="https://www.ourcommons.ca/DocumentViewer/en/44-1/TRAN/meeting-27/evidence">held a meeting on Aug. 19, 2022 to hear Omar Alghabra</a>, the minister of transport, voice his concerns about flight delays and cancellations. </p>
<p>The meeting focused on the need to better protect air travellers’ rights in the face of such events. </p>
<p>This focus on passenger rights continues to this day. <a href="https://globalnews.ca/news/9646294/air-passenger-rights-changes-compensation-loopholes/">At the end of April, Alghabra announced reforms</a> for the Canadian Transportation Agency’s appeal-handling process and the Canadian Transportation Act. Airlines will be required to handle claims and provide a response to complaints within 30 days.</p>
<figure class="align-center ">
<img alt="A man wearing a suit and glasses speaks from behind a microphone on a desk. A row of Canadian flags stand behind him." src="https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/524217/original/file-20230503-17-n9r1yz.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Minister of Transport Omar Alghabra speaks at a news conference on proposed changes to air passenger rights, in Ottawa, on April 24, 2023.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>The amendments, which are currently tabled in the House of Commons as part of a budget implementation bill, will affect the penalties air carriers face for violating air passenger protection rights. </p>
<p>In particular, the amendments will increase the maximum fine for violations to $250,000 and charge carriers with the regulatory cost of complaints.</p>
<p>The GAO’s analysis and recommendations, by comparison, are much more detailed.</p>
<h2>U.S. airline reforms</h2>
<p>The U.S. Department of Transportation has <a href="https://www.businessinsider.com/flight-delays-would-mean-compensation-for-customers-under-proposed-rule-2022-8">recently initiated passenger protection regulation development</a> similar to the ones Canada has had in place since 2019.</p>
<p>However, the Department of Transportation has yet to address specific compensation levels for passengers that have experienced flight delays — provisions that have already been adopted by Canada and are <a href="https://eur-lex.europa.eu/legal-%20content/EN/TXT/?uri=LEGISSUM%3Al24173">similar to those in effect in the European Union</a>.</p>
<p>An intriguing element of the GAO report is its review of the U.S. Department of Transportation’s awareness of airline scheduling practices and how such practices have impacted flight delays and cancellations.</p>
<p><a href="https://www.gao.gov/assets/820/819136.pdf">In its report, the GAO stated</a> the department of transportation has the authority to “regulate unfair and deceptive practices of airlines, which includes unrealistic scheduling practices.”</p>
<p>The Department of Transportation defines unrealistic scheduling as “the scheduling of flights that airlines cannot generally and reasonably be expected to fulfill.”</p>
<figure class="align-center ">
<img alt="A woman walks in front of a screen displaying flight schedules." src="https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/524216/original/file-20230503-24-1sjo91.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cancelled flights are seen in red on the flight schedules at the Southwest terminal at Los Angeles International Airport in December 2022.</span>
<span class="attribution"><span class="source">(AP Photo/Damian Dovarganes)</span></span>
</figcaption>
</figure>
<p>The report concludes that various stakeholders, including several airlines and worker unions, published unrealistic flight schedules, which carriers cannot reasonably be expected to fulfill.</p>
<p>The Department of Transportation indicated it will make an effort next year to build and sustain its oversight and analysis of airline scheduling practices. This will ensure airlines maintain realistic schedules and minimize the impact of flight disruptions on passengers.</p>
<h2>Lessons for Canada</h2>
<p>It is critical that effort be made to provide fair and meaningful compensation in a timely manner to air passengers that have been subjected to airline delays and cancellations. But it is equally — if not more — important to address the underlying causes of such disruptions.</p>
<p>Effective oversight of published airline schedules must be provided. Canadian air travellers should be able to trust an airline’s published schedule — especially as air travellers often purchase tickets long before their flight. </p>
<p>Should Transport Canada step into this oversight role? It might be time to seriously consider establishing a distinct civil aviation authority, separate from Transport Canada.</p>
<p>Canadians’ patience with the actions of various organizations in Canada’s aviation sector has been wearing thin. At the same time, <a href="https://www.commondreams.org/news/united-ceo-airlines-scheduling-flights">rumblings of a return to regulation is starting up</a> in the U.S. airline industry.</p>
<p>Canada’s <a href="https://www.thecanadianencyclopedia.ca/en/article/transportation-regulation">experiment with deregulation occurred close to 40 years ago</a>, but airline scheduling oversight might be one of several areas ripe for similar scheduling reforms in the face of airline disruptions.</p><img src="https://counter.theconversation.com/content/204996/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Gradek does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While it is critical that air passengers be compensated for airline delays and cancellations, it is equally — if not more — important to address the underlying causes of such disruptions.John Gradek, Faculty Lecturer and Program Co-ordinator, Supply Chain, Logistics and Operations Management, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1990622023-02-06T13:28:10Z2023-02-06T13:28:10ZThe future of flight in a net-zero-carbon world: 9 scenarios, lots of sustainable aviation fuel<figure><img src="https://images.theconversation.com/files/508151/original/file-20230203-26-z6qah6.jpg?ixlib=rb-1.1.0&rect=0%2C7%2C5003%2C3376&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some airlines are already experimenting with sustainable aviation fuel.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/los-angeles-international-airport-royalty-free-image/567874083">Michael H/Stone Collection/Getty Images</a></span></figcaption></figure><p>Several <a href="https://carboncredits.com/airlines-race-to-net-zero-carbon-footprint-2/">major airlines</a> have pledged to <a href="https://www.iata.org/en/programs/environment/flynetzero/">reach net-zero</a> carbon emissions by midcentury to fight climate change. It’s an ambitious goal that will require an enormous ramp-up in sustainable aviation fuels, but that alone won’t be enough, <a href="https://doi.org/10.1038/s41893-022-01046-9">our latest research</a> shows.</p>
<p>The idea of jetliners running solely on fuel made from used cooking oil from restaurants or corn stalks might seem futuristic, but it’s <a href="https://interestingengineering.com/innovation/first-cooking-oil-powered-military-transporter-aircraft">not that far away</a>.</p>
<p><a href="https://earth.org/sustainable-aviation-fuel-companies/">Airlines are</a> <a href="https://www.cnn.com/travel/article/airbus-a380-saf-cooking-oil-scn/index.html">already experimenting</a> with sustainable aviation fuels, including biofuels made from agriculture residues, trees, corn and used cooking oil, and synthetic fuels made with captured carbon and green hydrogen. </p>
<p>United Airlines, which has been <a href="https://www.united.com/en/us/fly/company/responsibility/sustainable-aviation-fuel.html">using a blend</a> of used oil or waste fat and fossil fuels on some flights from Los Angeles and Amsterdam, recently <a href="https://www.prnewswire.com/news-releases/united-tallgrass-and-green-plains-form-joint-venture-to-develop-new-sustainable-aviation-fuel-technology-using-ethanol-301734695.html">announced plans</a> to power 50,000 flights a year between its Chicago and Denver hubs using ethanol-based sustainable aviation fuels by 2028. The airline also <a href="https://www.prnewswire.com/news-releases/united-rallies-businesses-and-consumers-with-new-first-of-its-kind-100-million-sustainable-flight-fund-301751293.html">launched a US$100 million fund</a> on Feb. 21, 2023, with Air Canada, Boeing, GE Aerospace, JPMorgan Chase and Honeywell to invest in sustainable aviation fuel startups to expand the industry.</p>
<p>In a new study, we examined different options for aviation to reach net-zero emissions. </p>
<p>The <a href="https://doi.org/10.1038/s41893-022-01046-9">bottom line</a>: Replacing fossil jet fuel with sustainable aviation fuels will be crucial, but the industry will still need to invest in <a href="https://theconversation.com/these-machines-scrub-greenhouse-gases-from-the-air-an-inventor-of-direct-air-capture-technology-shows-how-it-works-172306">direct-air carbon capture and storage</a> to offset emissions that can’t be cut. Each pathway has important trade-offs and hurdles. </p>
<h2>Scenarios for the future</h2>
<p>Before the pandemic, in 2019, aviation accounted for <a href="https://www.iea.org/reports/aviation">about 3.1%</a> of total global carbon dioxide emissions from fossil fuel combustion, and the number of passenger miles traveled each year was rising. If aviation emissions were a country, that would make it the sixth-largest emitter, closely following Japan.</p>
<p>In addition to releasing carbon emissions, burning jet fuel produces soot and water vapor, known as contrails, <a href="https://doi.org/10.1016/j.atmosenv.2020.117834">that contribute to warming</a>, and these are not avoided by switching to sustainable aviation fuels.</p>
<p><iframe id="JtSL9" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/JtSL9/6/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Aviation is also one of the hardest-to-decarbonize sectors of the economy. Small electric and hydrogen-powered planes are being developed, but long-haul flights with lots of passengers are likely <a href="https://theconversation.com/electric-planes-are-coming-short-hop-regional-flights-could-be-running-on-batteries-in-a-few-years-190098">decades away.
</a></p>
<p>We developed and analyzed <a href="https://doi.org/10.1038/s41893-022-01046-9">nine scenarios</a> spanning a range of projected passenger and freight demand, energy intensity and carbon intensity of aviation to explore how the industry might get to net-zero emissions by 2050.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Nine sets of bar charts" src="https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=606&fit=crop&dpr=1 600w, https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=606&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=606&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=762&fit=crop&dpr=1 754w, https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=762&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/508209/original/file-20230205-19-9oydno.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=762&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Nine scenarios illustrate how much carbon offsets would be required to reach net-zero emissions, depending on choices made about demand and energy and carbon intensity. Each starts with 2021’s emissions (1.2 gigatons of carbon dioxide equivalent). With rising demand and no improvement in carbon intensity, a large amount of carbon capture will be necessary. Less fossil fuel use and slower demand growth reduce offset needs.</span>
<span class="attribution"><a class="source" href="https://www.nature.com/articles/s41893-022-01046-9">Candelaria Bergero</a></span>
</figcaption>
</figure>
<p>We found that as much as 19.8 exajoules of sustainable aviation fuels could be needed for the entire sector to reach net-zero CO₂ emissions. With other efficiency improvements, that could be reduced to as little as 3 exajoules. To put that into context, 3 exajoules is almost equivalent to all <a href="https://www.iea.org/data-and-statistics/charts/global-biofuel-production-in-2019-and-forecast-to-2025">biofuels produced in 2019</a> and far surpasses the 0.005 exajoules of <a href="https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Jul/IRENA_Reaching_Zero_Biojet_Fuels_2021.pdf">bio-based jet fuel produced in 2019</a>. An exajoule is a measure of energy.</p>
<p>Flying less and improving airplanes’ energy efficiency, such as using <a href="https://www.faa.gov/newsroom/faa-adds-fuel-saving-arrival-routes-11-airports">more efficient “glide” landings</a> that allow airlines to approach the airport with engines at near idle, can help reduce the amount of fuel needed. But even in our rosiest scenarios – where demand grows at 1% per year, compared to the historical average of 4% per year, and energy efficiency improves by 4% per year rather than 1% – aviation would still need about 3 exajoules of sustainable aviation fuels.</p>
<h2>Why offsets are still necessary</h2>
<p>A rapid expansion in biofuel sustainable aviation fuels is easier said than done. It could require as much as 1.2 million square miles (300 million hectares) of dedicated land to grow crops to turn into fuel – roughly 19% of global cropland today.</p>
<p>Another challenge is cost. The <a href="https://www.iata.org/en/publications/economics/fuel-monitor/">global average price of fossil jet fuel</a> is about about US$3 per gallon ($0.80 per liter), while the cost to produce bio-based jet fuels is often twice as much. The cheapest, <a href="https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Jul/IRENA_Reaching_Zero_Biojet_Fuels_2021.pdf">HEFA</a>, which uses fats, oils and greases, ranges in cost from $2.95 to $8.67 per gallon ($0.78 to $2.29 per liter), but it depends on the availability of waste oil.</p>
<p><a href="https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Jul/IRENA_Reaching_Zero_Biojet_Fuels_2021.pdf">Fischer-Tropsch biofuels</a>, produced by a chemical reaction that converts carbon monoxide and hydrogen into liquid hydrocarbons, range from $3.79 to $8.71 per gallon ($1 to $2.30 per liter). And <a href="https://doi.org/10.1021/acs.energyfuels.6b00665">synthetic fuels</a> are from $4.92 to $17.79 per gallon ($1.30 to $4.70 per liter).</p>
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<p>Realistically, reaching net-zero emissions will likely also rely on carbon dioxide removal.</p>
<p>In a future with similar airline use as today, as much as 3.4 gigatons of carbon dioxide would have to be <a href="https://www.iea.org/reports/direct-air-capture">captured from the air and locked away</a> – pumped underground, for example – for aviation to reach net-zero. That could cost trillions of dollars.</p>
<p>For these offsets to be effective, the carbon removal would also have to follow a <a href="https://doi.org/10.1038/s41558-019-0415-y">robust eligibility criteria</a> and be effectively permanent. This is <a href="https://carbonmarketwatch.org/flights-of-fancy/">not happening</a> today in airline offsetting programs, where airlines are mostly buying cheap, nonpermanent offsets, such as those involving <a href="https://www.theverge.com/2022/10/11/23398780/european-airlines-mislead-customers-carbon-offset-credits-climate-change">forest conservation and management projects</a>.</p>
<p>Some caveats apply to our findings, which could increase the need for offsets even more. </p>
<p>Our assessment assumes sustainable aviation fuels to be net-zero carbon emissions. However, the feedstocks for these fuels <a href="https://doi.org/10.1016/j.joule.2021.12.013">currently have life-cycle emissions</a>, including from fertilizer, farming and transportation. The American Society for Testing Materials also currently has a maximum <a href="https://www.iata.org/contentassets/d13875e9ed784f75bac90f000760e998/saf-technical-certifications.pdf">blend limit: up to 50%</a> sustainable fuels can be blended into conventional jet fuel for aviation in the U.S., though airlines have been testing <a href="https://www.atr-aircraft.com/presspost/first-flight-in-history-with-100-sustainable-aviation-fuel-on-a-regional-commercial-aircraft/">100% blends in Europe</a>. </p>
<h2>How to overcome the final hurdles</h2>
<p>To meet the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">climate goals</a> the world has set, emissions in all sectors must decrease – including aviation.</p>
<p>While reductions in demand would help reduce reliance on sustainable aviation fuels, it’s more likely that more and more people will fly in the future, as more people become wealthier. Efficiency improvements will help decrease the amount of energy needed to power aviation, but it won’t eliminate it.</p>
<p>Scaling up sustainable aviation fuel production could decrease its costs. <a href="https://www.iata.org/en/pressroom/2022-releases/2022-06-21-02/">Quotas</a>, such as those introduced in the <a href="https://www.easa.europa.eu/en/light/topics/fit-55-and-refueleu-aviation">European Union’s “Fit for 55”</a> plan, subsidies and <a href="https://www.thirdway.org/blog/sustainable-aviation-taking-off-thanks-to-inflation-reduction-act">tax credits</a>, like those in the U.S. Inflation Reduction Act signed in 2022, and a carbon tax or other price on carbon, can all help achieve this.</p>
<p>Additionally, given the role that capturing carbon from the atmosphere will play in achieving net-zero emissions, a more robust accounting system is needed internationally to ensure that the offsets are compensating for aviation’s non-CO₂ impacts. If these hurdles are overcome, the aviation sector could achieve net-zero emissions by 2050.</p>
<p><em>This updates an <a href="https://theconversation.com/the-future-of-flight-in-a-net-zero-carbon-world-9-scenarios-lots-of-sustainable-biofuel-199062">article originally published</a> Feb. 6, 2023, to include United Airlines’ investment fund announcement.</em></p><img src="https://counter.theconversation.com/content/199062/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Candelaria Bergero's research was supported by the U.S. National Science Foundation and U.S. Department of Agriculture.
</span></em></p><p class="fine-print"><em><span>Steven J. Davis's research was supported by the U.S. National Science Foundation and U.S. Department of Agriculture.</span></em></p>Airlines are investing in sustainable biofuel startups and starting to uses alternative fuels, including cooking oil, ag waste and corn ethanol. But biofuels alone won’t be enough, research shows.Candelaria Bergero, Ph.D. Student in Earth System Science, University of California, IrvineSteve Davis, Professor of Earth System Science, University of California, IrvineLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1857502022-06-26T12:11:54Z2022-06-26T12:11:54ZAir Canada flight reductions: FAQs about the chaos in the airline industry<figure><img src="https://images.theconversation.com/files/471893/original/file-20220630-26-ydiymv.JPG?ixlib=rb-1.1.0&rect=25%2C269%2C5583%2C3750&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A passenger looks for his luggage among a pile of unclaimed baggage at Pierre Elliott Trudeau airport in Montreal, on June 29. THE CANADIAN PRESS/Ryan Remiorz</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Ryan Remiorz</span></span></figcaption></figure><p>People around the world are anxious to travel again as pandemic restrictions are being lifted. But those planning to jump on a plane for a vacation have been frustrated by chaos in the airline industry. In both North America and Europe, thousands of flights have been cancelled and hundreds of thousands of passengers have had their trips disrupted. </p>
<p>Things will get worse before they get better. Air Canada has announced it will eliminate more than 150 daily flights for July and August. “Regrettably, things are not business as usual in our industry globally, and this is affecting our operations,” Air Canada president Michael Rousseau <a href="https://milled.com/air-canada/a-message-from-air-canadas-president-gQLU1OsSJMb4j5Fl">said in an email to customers when announcing the flight cutbacks</a>. </p>
<p>So why is this happening? Here are answers to some key questions about the current problems with air travel.</p>
<h2>Why are so many flights being cancelled or delayed?</h2>
<p>The principal cause of the disruptions has been a shortage of qualified personnel at airports to handle the recent surge in passenger traffic. </p>
<p>Airlines have been taking advantage of recent demand for air travel by returning aircraft and flight schedules to close to <a href="https://www.aviationpros.com/airlines/news/21271750/air-passengers-to-reach-83-of-2019-levels-this-year-iata">80 per cent of pre-pandemic levels</a>, with the resulting volume of flights putting significant stress on the capability of the supporting infrastructure — <a href="https://www.dutchnews.nl/news/2022/06/easyjet-to-scrap-more-summer-flights-from-schiphol-klm-limits-sales/">airports, air traffic control and labour conditions</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="The graph shows a major dip in 2020 and a steady climb since 2021" src="https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=437&fit=crop&dpr=1 600w, https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=437&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=437&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=549&fit=crop&dpr=1 754w, https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=549&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/470792/original/file-20220624-26-1uu9fa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=549&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Air travel, as measured by the number of kilometres travelled by paying passengers, has started to rebound as pandemic restrictions have been lifted.</span>
<span class="attribution"><span class="source">(International Air Transport Association)</span></span>
</figcaption>
</figure>
<h2>Are the problems only happening in certain airports or is this a worldwide issue?</h2>
<p>The congestion phenomenon in the summer 2022 travel season is rapidly spreading across a number of European and North American airports. The reason behind this concentration of congestion is quite simple: these are the air travel markets that have experienced the highest volumes of air travellers in recent months.</p>
<p>The rapid elimination of COVID-19 protocols in these markets since March have generated a significant increase in the demand for air travel, with volumes of passengers that haven’t been seen in more than two years. This increase in volume has been highly evidenced in major airline hub airports such as <a href="https://www.businessinsider.com/schiphol-airport-amsterdam-photos-security-staff-shortages-europe-flight-2022-6">Amsterdam</a>, <a href="https://www.ctvnews.ca/world/airport-chaos-european-travel-runs-into-pandemic-cutbacks-1.5959561">London</a>, <a href="https://www.theguardian.com/us-news/2022/jun/19/us-travelers-flight-cancellations-chaos">New York</a> and <a href="https://globalnews.ca/video/8905320/frustrations-mount-over-ongoing-delays-at-toronto-pearson-airport">Toronto</a>, where tens of thousands of passengers are processed every day.</p>
<h2>Are all the problems related to the pandemic?</h2>
<p>When the global air travel market collapsed in March 2020 with the introduction of travel restrictions and border closures, the commercial aviation industry took steps to conserve cash and maintain a minimal workforce. </p>
<p>Hundreds of <a href="https://www.forbes.com/sites/jackkelly/2021/02/01/airlines-lost-over-40000-workers-united-airlines-announced-another-14000-jobs-may-be-lost/?sh=6fa3ff1324b3">thousands of aviation workers were laid off or terminated</a>, with years of experience and technical expertise removed from the ranks of the commercial aviation communities. </p>
<p>With the assistance of governments throughout the world, over US$200 billion of financial support was provided by governments to help the commercial aviation industry maintain minimal service and prevent financial collapse. </p>
<p>When demand for air travel returned this March, the hiring frenzy began, but in a very different labour environment. The people who left in 2020 had, for the most part, moved on to other career opportunities and no longer had much interest in returning to an industry characterized by lower compensation and a higher employment risk. So the staff shortages have their genesis in the pandemic, and will continue to impact employment levels as travel returns.</p>
<figure class="align-center ">
<img alt="A line of people waiting behind a railing in an airport" src="https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/470657/original/file-20220623-56660-dwxs79.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Travelers wait in long lines to check in and board flights at Amsterdam’s Schiphol Airport, Netherlands, on June 21.</span>
<span class="attribution"><span class="source">(AP Photo/Peter Dejong, File)</span></span>
</figcaption>
</figure>
<h2>How many more people are travelling these days compared to a year ago – and compared to pre-pandemic levels?</h2>
<p>The International Air Transport Association publishes <a href="https://www.iata.org/en/pressroom/2022-releases/2022-06-09-01/">air travel statistics</a> relating to the volume of air travel throughout various world markets. It has noted that there is a significant difference in the volume of air travel, when compared to both 2021 and pre-pandemic levels. </p>
<p>The air travel market that has demonstrated the highest rebound has been domestic North America — travel for April 2022 has increased more than 280 per cent compared to April 2021 traffic levels, but remains at slightly more than 30 per cent lower than April 2019 levels. </p>
<p>In the Chinese domestic market, continuing pandemic-related travel restrictions and occasional city lockdowns have resulted in <a href="https://www.iata.org/en/iata-repository/publications/economic-reports/air-passenger-monthly-analysis---april-2022/">traffic levels down by close to 80 per cent</a> in April 2022, compared to April 2021 and 2019.</p>
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<h2>What can be done to prevent delays?</h2>
<p>There are a number of perspectives that can be applied to a resolution of the current level of delays.</p>
<p>European authorities have announced <a href="https://nltimes.nl/2022/06/16/schiphol-press-conference-many-flights-will-slashed-limit-passengers-ceo-wont-quit">specific reductions in flights</a>, while the U.S. government is <a href="https://www.newsweek.com/flight-cancellations-surge-buttigieg-demands-airlines-hire-staff-1717188">threatening to impose flight reductions</a> as a means of minimizing flight cancellations. </p>
<p>The Canadian government has facilitated a meeting with the major aviation organizations in Canada to discuss <a href="https://toronto.citynews.ca/2022/06/21/transport-minister-airlines-airports-delays/">a concerted and effective resolution </a> and <a href="https://investors.aircanada.com/2022-06-23-Air-Canada-Comments-on-Aviation-Industry-Summit-with-Federal-Transport-Minister">Air Canada announced measures</a> it was intending to implement to ease congestion at both Toronto Pearson and Montreal Trudeau airports. </p>
<p>Canadian government officials have also announced <a href="https://www.thestar.com/business/2022/05/25/airport-delays-are-here-to-stay-for-the-long-term-due-to-a-shortage-of-workers-in-airport-security-union-says.html">plans to hire close to 2,000 additional border security and screening personnel</a> to deal with specific congestion issues. Labour groups are not certain that the problems of congestion will be addressed by such actions. </p>
<p>The main issue is the volume of air travellers that are being drawn into the airport environment by the volume of flights operated by the airlines. Airlines have decided to grow their capacity to meet surging air travel demand, but the airport infrastructure is not equipped to handle such volumes. </p>
<p>While such enthusiasm by the airline industry is laudable in times where adequate and experienced staff are available at airports, that is not the case now — and will not be the case for the foreseeable future.</p>
<figure class="align-center ">
<img alt="A blurred photo of people walking back and forth in an airport" src="https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&rect=0%2C10%2C7174%2C4754&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/470656/original/file-20220623-52339-p46ocy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Travellers queue at security at Heathrow Airport in London on June 22. People are likely to face travel disruptions until at least September.</span>
<span class="attribution"><span class="source">(AP Photo/Frank Augstein)</span></span>
</figcaption>
</figure>
<h2>How long will this last?</h2>
<p>The summer travel season is in full flight in the northern hemisphere. Additional airline capacity and greater demand for air service by a travel-starved population will continue through at least September. </p>
<p>Unless actions being contemplated by American, European and Canadian carriers results in a reduction of peak loading of aircraft movements across major airline hubs, in North America and Western Europe primarily, the congestion and delays will continue – and possibly worsen. </p>
<p>Relief will most likely come in the fall, as demand for air travel is reduced with the arrival of the school season. Staffing will also reach required levels by the fall, with the arrival of normal commercial air operating conditions. </p>
<p>Other issues that may reduce demand include <a href="https://www.forbes.com/sites/suzannerowankelleher/2022/05/13/airfare-inflation-cool-demand-summer/?sh=42ae089032c3">higher airfares due to inflation and higher oil prices</a>, which may impact the survival of some airlines. </p>
<h2>What advice would you give to air travellers over the next few months?</h2>
<p>Airport authorities have been providing <a href="https://www.newswire.ca/news-releases/travelling-this-summer-toronto-pearson-and-its-airport-partners-offer-travel-advice-for-passengers-822689624.html">guidance to travellers</a> on how best to prepare themselves for summer travel, including tips on how to avoid delays at security checks.</p>
<p>In this coming summer of disruption, I would recommend travellers embark on their air journey with patience, ensure they are well-rested prior to departing for the airport and remember that airline staff are also experiencing stressful moments during their day. </p>
<p>A smile, a thank you and, above all, a caring attitude for fellow travellers and staff is called for. The air travel experience will get better!</p><img src="https://counter.theconversation.com/content/185750/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Gradek does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What’s behind the chaos at airports across Europe and North America? An airline industry expert explains the problems that have resulted in delays and cancelled flights.John Gradek, Faculty Lecturer and Program Co-ordinator, Supply Chain, Logistics and Operations Management, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1401182020-07-13T11:53:42Z2020-07-13T11:53:42ZAirlines got travelers comfortable about flying again once before – but 9/11 and a virus are a lot different<figure><img src="https://images.theconversation.com/files/346702/original/file-20200709-38-1t8rnkl.jpg?ixlib=rb-1.1.0&rect=71%2C128%2C4674%2C3031&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Chicago's O'Hare and other U.S. airports remain largely empty despite increased mask wearing and other measures to prevent COVID-19 spread. </span> <span class="attribution"><span class="source">AP Photo/Nam Y. Huh</span></span></figcaption></figure><p>The U.S. airline industry has generally faced two obstacles in enticing more people to fly: fear and fares. </p>
<p>Before the novel coronavirus, few feared flying thanks to the <a href="https://blueskypit.com/2020/02/10/trouble-in-the-air-rare-for-u-s-commercial-flights">extreme rarity</a> of airline crashes in the U.S., and domestic inflation-adjusted fares that <a href="https://transtats.bts.gov/AIRFARES/">were about the lowest ever</a>. As a result, a <a href="https://www.bts.dot.gov/newsroom/final-full-year-2019-traffic-data-us-airlines-and-foreign-airlines-us-flights">record 811 million people flew</a> within the U.S. in 2019. </p>
<p>Today, fares are at rock bottom, but Americans’ fear of flying may be the highest it’s ever been, as the risk of sitting in an enclosed space with several hundred strangers – seemingly the perfect <a href="https://www.bbc.com/news/business-52822913">conditions for an infectious disease</a> – is <a href="https://thehill.com/policy/transportation/aviation/502972-fewer-than-half-willing-to-fly-shortly-after-coronavirus">making most people</a> avoid the skies. Passenger traffic <a href="https://www.tsa.gov/coronavirus/passenger-throughput">plummeted 95%</a> in April from a year earlier and remains significantly lower than normal.</p>
<p>As an <a href="https://udayton.edu/directory/artssciences/history/bednarek_janet.php">aviation historian</a>, I feel a bit of deja vu. Almost two decades ago, demand similarly evaporated after the 9/11 terrorist attacks led to a nationwide grounding and fear of flying that persisted for several years. Here’s how the industry overcame passenger jitters – and what lessons it holds for today. </p>
<h2>Overcoming aviophobia</h2>
<p>Although the odds of being on a plane that gets hijacked are extremely slim, the perception of this changed significantly after 9/11. In a <a href="https://news.gallup.com/poll/4909/terrorism-united-states.aspx">poll taken immediately after the attack</a>, more than 40% of Americans said they were less willing to fly. </p>
<p>The U.S. government ordered all airports closed for three days. When they reopened, passenger traffic <a href="https://traveltips.usatoday.com/effects-911-airline-industry-63890.html">was still down almost 30%</a> from the previous year. Simply put, if people were going to take to the skies again, the airports knew they had to provide a level of security that made people feel safe. </p>
<p>That’s why passengers returning to the airports in the days after 9/11 found a much different environment that included armed military patrols, heightened scrutiny of identification and more careful screening of both people and bags <a href="https://www.cntraveler.com/story/how-airport-security-has-changed-since-september-11">before they were allowed on the aircraft</a>. While the soldiers were eventually replaced by uniformed agents of the newly created <a href="https://www.tsa.gov/timeline">Transportation Security Administration</a>, the other measures put in place remain to this day.</p>
<p>Airports and airlines were able to quickly get the new infrastructure into place because much of the basic equipment had been developed in response to a <a href="https://www.vox.com/2016/3/29/11326472/hijacking-airplanes-egyptair">long history of hijackings</a> and other terrorist attacks against aviation. And over the years, they had developed <a href="https://www.britannica.com/technology/airport/Airport-security">X-ray machines, magnatometers and explosive detection equipment</a>. </p>
<p>In other words, they knew just what they needed to do to address passenger fear and already had the tools to do it. It took several years, but the airline industry eventually did recover, and Americans once again were flying in record numbers. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=447&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=447&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=447&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=562&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=562&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346704/original/file-20200709-18-7suhbr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=562&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Heavily armed guards were a common sight at airports in the days after 9/11.</span>
<span class="attribution"><span class="source">AP Photo/Michael Dwyer</span></span>
</figcaption>
</figure>
<h2>A novel challenge</h2>
<p>In 2020, however, the aviation industry is faced with a new challenge: an evolving pandemic that <a href="https://www.washingtonpost.com/health/2020/05/27/coronavirus-endemic/">shows no signs of ending</a> for months if not years. </p>
<p>The coronavirus crisis has not only made people more afraid to fly, it’s taken away most of our reasons for flying in the first place. Why fly if there is nothing to fly to – <a href="https://www.businessinsider.com/major-events-cancelled-or-postponed-due-to-the-coronavirus-2020">no conferences</a>, no in-person business meetings, <a href="https://washington.org/dc-information/coronavirus-travel-update-washington-dc">no or limited</a> open <a href="https://www.forbes.com/sites/tamarathiessen/2020/07/01/us-europe-eu-travel-ban-5-things-americans-must-know/#d9f36756c4c5">vacation spots</a>? </p>
<p>In June, <a href="https://www.tsa.gov/coronavirus/passenger-throughput">passenger traffic through U.S. airports</a> was down about 81% from last year’s levels, only a slight improvement from May and April, when most of the world <a href="https://www.businessinsider.com/countries-on-lockdown-coronavirus-italy-2020-3#new-zealand-has-essentially-lifted-all-restrictions-and-is-now-limiting-the-number-of-citizens-trying-to-return-home-1">was under lockdown</a>. </p>
<p>Unlike terrorism, the aviation world has little history dealing with pandemics and no broadly agreed-upon set of accepted equipment or procedures. Past outbreaks, such as SARS in 2003 and MERS in 2005, had only a modest effect on international travel.</p>
<p>In 2003, for example, the World Health Organization said the danger of SARS transmission on an <a href="https://www.who.int/csr/sars/travel/airtravel/en/.">aircraft was quite low</a>, and the <a href="https://www.cdc.gov/about/history/sars/timeline.htm">entire outbreak lasted only a few months</a> and infected a little over 8,000 people in 29 countries. </p>
<p>In 2015, MERS was recognized as a <a href="https://www.reuters.com/article/us-airshow-france-mers/mers-outbreak-now-no-1-aviation-sector-risk-lessor-idUSKBN0OZ2A720150619">threat to aviation</a> but, even more so than SARS, proved difficult to transmit and was <a href="https://www.medicalnewstoday.com/articles/how-do-sars-and-mers-compare-with-covid-19#Coronaviruses-past-and-present">largely confined to the Arabian peninsula</a>. </p>
<p>That’s likely why the TSA and the industry were rather slow to adopt new policies dealing with the COVID-19 threat. Although the virus <a href="https://www.nytimes.com/2020/05/15/us/coronavirus-first-case-snohomish-antibodies.html">reportedly</a> had been in the U.S. as early as December, the TSA didn’t begin notifying passengers when and where its agents had <a href="https://www.tsa.gov/coronavirus">tested positive</a> until mid-March, shortly before the first stay-at-home order on March 19. The Centers for Disease Control and Prevention issued its <a href="https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/cloth-face-cover.html">first guidance on the use of masks</a> on April 3. It was another month, though, before airlines <a href="https://www.afar.com/magazine/face-masks-now-required-provided-on-these-us-airlines">began requiring passengers</a> to wear masks – and even today, <a href="https://www.forbes.com/sites/advisor/2020/06/19/master-list-of-us-airline-seating-and-mask-covid-19-policies/#1cf6e9216690">not all carriers do</a>. And then it was weeks later before airports <a href="https://blueskypit.com/2020/05/18/pit-sets-new-safety-requirements-for-travelers-staff/">began introducing</a> new cleaning and health procedures, including requiring all employees to wear masks. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346703/original/file-20200709-50-1lvbves.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Back in May, passengers were few and far between.</span>
<span class="attribution"><span class="source">AP Photo/Charlie Riedel</span></span>
</figcaption>
</figure>
<h2>A mishmash of policies</h2>
<p>After 9/11, Washington – the Federal Aviation Administration, Congress and the White House – provided strong and largely consistent action and messaging aimed at facilitating a rapid recovery of air travel in the U.S. The COVID-19 challenge to aviation seems to lack the same response from Washington, leaving most actions to the airlines and local airport officials.</p>
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<p>The result has been a mishmash of policies and procedures with largely empty airports and airlines struggling to balance passenger loads, social distancing and dwindling revenues. As a result, <a href="https://thehill.com/policy/transportation/489259-nearly-80-airlines-cut-capacity-100-percent-over-coronavirus">cuts to capacity</a> mean many planes are once again <a href="https://www.bts.gov/archive/publications/special_reports_and_issue_briefs/issue_briefs/number_13/entire">packed to the brim</a>, even as the <a href="https://www.nytimes.com/2020/07/09/world/coronavirus-updates.html?action=click&module=Top%20Stories&pgtype=Homepage">pandemic worsens in the U.S.</a>. While some airlines have promised to continue social distancing on planes by <a href="https://thepointsguy.com/guide/airline-social-distancing-policies/">keeping middle seats open</a>, others, such as <a href="https://www.wbtv.com/2020/06/28/american-airlines-will-start-booking-flights-full-capacity-again-july">American</a>, are aiming for full capacity. </p>
<p>The novel coronavirus represents a new threat to aviation, and it may take a long time for the industry to develop the equipment, policies and procedures to deal with it. It may be too late for the current pandemic, but hopefully we’ll be ready for the next one.</p><img src="https://counter.theconversation.com/content/140118/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Janet Bednarek does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Airlines and airports reacted quickly after 9/11 to put new procedures in place that overcame passengers’ newfound fears of flying. An aviation historian explains why it may be harder to so today.Janet Bednarek, Professor of History, University of DaytonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/776602017-05-17T00:03:09Z2017-05-17T00:03:09ZWhy banning laptops from airplane cabins doesn’t make sense<p>Recent reports suggest that terrorists can now create bombs so thin that they cannot be detected by the <a href="https://www.bloomberg.com/politics/articles/2017-05-16/race-to-prevent-airline-terror-turns-to-laptops-thin-bombs">current X-ray screening</a> that our carry-on bags undergo. </p>
<p>In an effort to protect against such threats, the U.S is <a href="http://www.chicagotribune.com/business/ct-europe-flight-laptop-ban-20170512-story.html">considering banning laptops and other large electronic devices</a> in the passenger cabins of airplanes flying between Europe and the United States. This would extend a ban already in place on flights from eight Middle Eastern countries. </p>
<p>Given the significant disruption such a policy would cause tens of thousands of passengers a day, a logical question any economist might ask is: Is it worth it? </p>
<p>It is tempting to think that any level of cost and inconvenience is sensible if it reduces the risk of an attack even a little. But risks, inherent in flying and <a href="http://traveltips.usatoday.com/air-travel-safer-car-travel-1581.html">even driving</a>, can never be avoided entirely. </p>
<p>So when weighing policies that are designed to make us safer, it is important to consider both their costs and potential effectiveness.</p>
<p>Unfortunately, whether the benefits justify the costs is <a href="https://www.schneier.com/blog/archives/2011/04/counterterroris.html">too often not the yardstick used</a> by officials determining whether to pursue these types of policies. Instead, as law professors who have researched how the government’s travel policies affect civil liberties, we have found that it is more likely that political considerations motivate the adoption of restrictive policies, which in the end <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2647779">actually do little to protect citizens’ security</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169622/original/file-20170516-11941-l4ex1b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Placards at Casablanca Mohammed V International Airport inform passengers that laptops and other electronic devices must be checked on flights to the U.S. and the U.K.</span>
<span class="attribution"><span class="source">Abdeljalil Bounhar/AP Photo</span></span>
</figcaption>
</figure>
<h2>Expanding a ban</h2>
<p>The current laptop policy regarding some flights from the Middle East was put in place in March apparently as a result of <a href="http://www.cnn.com/2017/05/15/politics/trump-russia-classified-information/">intelligence</a> that ISIS militants were <a href="https://www.washingtonpost.com/world/national-security/trump-revealed-highly-classified-information-to-russian-foreign-minister-and-ambassador/2017/05/15/530c172a-3960-11e7-9e48-c4f199710b69_story.html">training</a> to get laptop bombs past security screeners and onto planes. The U.K. adopted a similar rule.</p>
<p>The Department of Homeland Security <a href="https://www.bloomberg.com/news/articles/2017-05-15/brace-for-chaos-if-u-s-expands-airline-laptop-ban">wants to extend</a> that ban to transatlantic flights. This would cause major disruption and “<a href="http://www.chicagotribune.com/business/ct-europe-flight-laptop-ban-20170512-story.html">logistical chaos</a>.” Approximately 65 million people a year fly between Europe and the United States. </p>
<p>Business travelers are concerned about the loss of productivity and the risk that a checked laptop with sensitive information could be damaged, stolen or subjected to intrusive search. Families worry about traveling without electronic distractions to soothe tired and uncomfortable children. Airlines <a href="http://www.foxnews.com/world/2017/05/15/trumps-expected-widening-laptop-ban-has-european-airlines-worried.html">expect a loss of business</a> as people opt out of transatlantic travel altogether. </p>
<p>Past policies such as limiting the liquids that can be carried on and requiring passengers to remove shoes are a case in point. They have increased burdens on both travelers – who must pay to check baggage and face added inconvenience – and taxpayers – who bear the costs of every policy change – <a href="https://www.theatlantic.com/national/archive/2014/01/tsa-business-security-theater-not-security/357599/">while likely doing little to nothing</a> to improve security.</p>
<h2>Benefits and costs</h2>
<p>Regulators throughout the government typically must rely on <a href="http://www.foreffectivegov.org/node/3470">a cost-benefit analysis</a> to determine levels of acceptable risk, weighing the potential safety gain of a new policy against its costs and added risks.</p>
<p>But when dealing with a fear of terrorism, it is common to find policies that are <a href="http://politicalscience.osu.edu/faculty/jmueller/JATMfin.pdf">not cost effective</a>. And if we subjected the laptop bans (the original and expansion) to a cost-benefit analysis, they would likely fail. The costs are high, the potential security gains are small, and the policy adds hazards of its own. </p>
<p>To make its case, the government seems to be relying on several purported benefits of stowing laptops in the luggage hold. First, checked bags undergo <a href="https://www.bloomberg.com/politics/articles/2017-05-16/race-to-prevent-airline-terror-turns-to-laptops-thin-bombs">additional screening for the presence of explosives</a>. Second, it is possible that luggage in the cargo area could provide <a href="https://www.bloomberg.com/politics/articles/2017-05-16/race-to-prevent-airline-terror-turns-to-laptops-thin-bombs">some insulation</a> from an explosion. Finally, bombs placed in the cargo area require a <a href="https://www.usatoday.com/story/news/2017/03/21/airplane-bombs-carryon-cargo-electronics-ban/99447258/">sophisticated timing device</a>, unlike simpler explosives that could be set off manually. </p>
<p>But these benefits appear dubious as support for a laptop ban. Carry-on luggage could go through expanded screening, for example, while the notion that checked luggage might make an explosion more survivable is speculative – and such gains might in any case be offset by the dangerous <a href="https://cosmosmagazine.com/chemistry/airline-laptop-ban-good-policy-or-poor-science">greater vibration found in cargo</a> cabin. Lithium batteries have, after all, been forbidden from the cargo compartment for a reason – and <a href="https://www.faa.gov/about/initiatives/hazmat_safety/more_info/?hazmat=7">must instead be carried on</a> – to avoid the risk of fire.</p>
<p>And of course, this does little to protect against the risk of an explosive device in the cargo cabin. It just moves the risk to an isolated area of the plane.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=368&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=368&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=368&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=462&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=462&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169625/original/file-20170516-11937-1791yxm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=462&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Lithium batteries were considered the likely cause of a UPS cargo plane crash in 2010 near Dubai that killed both crew members.</span>
<span class="attribution"><span class="source">Kamran Jebreili/AP Photo</span></span>
</figcaption>
</figure>
<p>Moving the devices to the hold could actually make such devices harder to detect if they slip past airport screening. The exploding lithium batteries in Samsung devices, for example, show how even ordinary fire risks can be greater when passengers are not there to <a href="http://gizmodo.com/samsung-galaxy-2-spews-smoke-and-sparks-on-flight-to-si-1786998437">notice a smoking battery</a> in a bag in the overhead compartment.</p>
<p>Similarly, the presence of observant passengers can help thwart terrorist activity when it does occur, <a href="http://www.cnn.com/2012/02/16/justice/michigan-underwear-bomber-sentencing/">as happened with the underwear bomber</a>. One should keep in mind that one of the greatest airline tragedies of all times, the attack on Pan Am flight 103 that exploded over Lockerbie and claimed 270 lives, was caused by a bomb that went off in a suitcase in the <a href="http://www.chicagotribune.com/sns-lockerbie-bombing-pictures-photogallery.html">cargo hold</a>.</p>
<p>On the economic side, the financial costs of the policy change would likely be very high. Based on statistics from the U.S. Department of Commerce, travel industry professionals estimate that the cost of lost productivity alone for business travelers unable to work on flights between the U.S. and Europe is estimated to be <a href="https://finance.yahoo.com/news/u-s-laptop-ban-cost-economy-500000000-year-173629493.html">as great as $500 million</a> a year.</p>
<p>The potential <a href="https://www.usatoday.com/story/news/world/2017/03/29/trumps-travel-ban-could-cost-18b-us-tourism-travel-analysts-say/99708758/">loss of tourism revenue</a> may be even greater, as families avoid vacationing in the United States and business travelers <a href="https://www.bloomberg.com/news/articles/2017-05-15/brace-for-chaos-if-u-s-expands-airline-laptop-ban">choose to meet by teleconference instead of in person</a>. </p>
<h2>Questionable politics</h2>
<p>So if the laptop ban would be ineffective – or worse yet, even make airline travel <a href="https://www.forbes.com/sites/christinenegroni/2017/05/10/in-airplane-laptop-ban-us-discounts-faa-concerns-about-in-flight-fires/#78432a794ace">less safe</a> – and be very costly, why would the government consider it? </p>
<p>The answer is likely politics. And that is because people <a href="https://www.hks.harvard.edu/fs/rzeckhau/overreaction_risks.pdf">overestimate the likelihood</a> of being harmed by a terrorist attack, which lends extreme actions like the laptop ban public support, while they underestimate the risks of more ordinary occurrences like <a href="http://www.businessinsider.com/death-risk-statistics-terrorism-disease-accidents-2017-1">car accidents</a> or <a href="http://www.pennlive.com/news/2017/03/harrisburg_fire_write-through.html">defective batteries</a>. </p>
<p>From 1975 to 2015, <a href="https://www.cato.org/publications/policy-analysis/terrorism-immigration-risk-analysis">fewer than 84 Americans a year</a> died due to terrorism, and that includes the attacks on 9/11. Meanwhile, in 2015 alone a total of <a href="http://www.newsweek.com/2015-brought-biggest-us-traffic-death-increase-50-years-427759">38,300 people died</a> in traffic-related accidents in the U.S. And lithium batteries have been blamed for <a href="http://www.cbsnews.com/news/lithium-battery-fire-risk-samsung-galaxy-note-7/">dozens of aircraft fires</a> and <a href="http://www.businessinsider.com/exploding-batteries-in-mh370-cargo-hold-2015-10">may have been what brought down</a> Malaysia Airlines Flight 370, which <a href="http://www.cbsnews.com/news/malaysia-airlines-flight-370-likely-crash-location-reaffirmed-with-new-analysis/">disappeared</a> in 2014 with more than 200 passengers and crew. </p>
<p>At the same time, officials on whose watch an attack or other disaster occurs <a href="http://sobelrs.people.cofc.edu/All%20Pubs%20PDF/Hurricane%20Katrina%20Public%20Choice%20Analysis.pdf">receive disproportionate blame</a>, something that does not carry over to more ordinary risks. People fear terror attacks <a href="https://qz.com/898207/the-psychology-of-why-americans-are-more-scared-of-terrorism-than-guns-though-guns-are-3210-times-likelier-to-kill-them/">more than the common threats</a> that are actually more likely to cause them harm. Politicians may respond to their voters’ concerns, and may even share the same <a href="http://nymag.com/scienceofus/2017/01/why-americans-are-so-scared-of-terrorism.html">cognitive biases</a>. </p>
<p>As a result, government decision makers have an incentive to overvalue measures taken to prevent terror attacks, even at the expense of increasing more ordinary – <a href="https://www.wired.com/2016/10/samsung-isnt-one-lithium-ion-problems-just-ask-nasa/">yet more likely</a> – safety risks. </p>
<p>While there may not be much we can do about Americans’ misconceptions about the risk of terrorism, public policy on an issue as important as airline safety should not blindly follow them.</p><img src="https://counter.theconversation.com/content/77660/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Burke Robertson is a board member of the 11/9 Coalition, a nationwide, non-partisan, grassroots organization working for the protection of civil liberties and the rule of law.</span></em></p><p class="fine-print"><em><span>Irina D. Manta is the founding president of the 11/9 Coalition, a nationwide, non-partisan, grassroots organization working for the protection of civil liberties and the rule of law.</span></em></p>The U.S. is considering expanding a ban it imposed in March on several Middle Eastern countries to all flights from Europe. A close look suggests the meager benefits just aren’t worth the high costs.Cassandra Burke Robertson, Professor of Law and Director of the Center for Professional Ethics, Case Western Reserve UniversityIrina D. Manta, Professor of Law and Director of the Center for Intellectual Property Law, Hofstra UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/776622017-05-16T01:02:12Z2017-05-16T01:02:12ZWhy United’s culture needs to loosen up to avoid more PR fiascos<p>Is there something wrong with the culture at United Airlines? </p>
<p>A series of recent incidents have reinforced this view, from the horrifying moment when security officers <a href="http://fortune.com/2017/04/10/united-airlines-overbooked-flight-video/">violently dragged</a> a passenger off a plane in April to a more recent incident in which an airline employee <a href="http://fortune.com/2017/05/10/united-airlines-video-navang-oza">canceled a man’s flight</a> after he began taping their heated exchange.</p>
<p>The airline has reacted to its PR debacles by <a href="https://hub.united.com/united-review-action-report-2380196105.html">profusely apologizing and vowing</a> to revise its customer service policies. But changing a few rules won’t be enough. Our research suggests the critical source of United’s failure is its overly “tight” organizational culture. </p>
<p>“Tightness” describes a <a href="http://www.gelfand.umd.edu/Gelfandetal2006b.pdf">specific type of workplace culture</a>,
one that’s filled with rules so absolute that employees must follow them to the letter. In contrast, when an organization has fewer standardized rules, entrusting workers to improvise on the job, it has a culture of “looseness.” Think startups like Airbnb, where employees <a href="https://thenextweb.com/insider/2012/04/09/12-startups-that-offer-their-employees-the-coolest-perks">bring their dogs to work</a> or <a href="http://squarerooms.com.sg/trending/7-reasons-why-working-at-airbnb-doesnt-feel-like-a-job">take impromptu breaks in a spaceship-themed game room</a>. </p>
<p>United is at the opposite end of this continuum. And simply put, if it does not curtail its tightness, we can expect more turbulence ahead. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169400/original/file-20170515-6984-y4k875.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">United CEO Oscar Munoz, left, and United President Scott Kirby testified before Congress on May 2.</span>
<span class="attribution"><span class="source">Pablo Martinez Monsivais/AP Photo</span></span>
</figcaption>
</figure>
<h2>A high-threat industry</h2>
<p><a href="http://www.gelfand.umd.edu/papers/Gelfand%202011%20ScienceMag.pdf">Our research shows</a> that most differences between tight and loose cultures – whether among nations or companies – can be explained by their perception of threat. </p>
<p>When entities face potential danger and require a tremendous amount of coordination, they are more likely to tighten up and establish strict rules. For example, Singapore, with its population density of over 18,000 people per square mile and lack of national resources, needs more rules for survival. It’s one of the reasons why citizens are <a href="http://www.businessinsider.com/things-that-are-illegal-in-singapore-2015-7">fined incessantly</a> for spitting and playing loud music, and why they <a href="http://www.bbc.com/news/magazine-32090420">ban chewing gum</a>. </p>
<p>Countries that have fewer existential threats, like New Zealand, require less coordination and can afford to be more permissive, adaptive and innovative. Those unfamiliar to New Zealand might be bemused to visit and see <a href="http://thewireless.co.nz/audio_articles/on-the-dial-episode-18">people walking barefoot in banks</a>
or witness the “National Wizard,” appointed by a former prime minister to <a href="https://en.wikipedia.org/wiki/Wizard_of_New_Zealand">cheer up the population</a>, chanting spells for rugby games and <a href="https://medium.com/new-zealand-thoughts/new-zealands-national-wizard-e8acf6ed5548">hatching himself from gigantic eggs</a>.</p>
<p>The tight-loose distinction doesn’t just apply to nations, though, the same logic applies to organizations. </p>
<p>United has a tight culture for understandable reasons. It operates in a high-threat industry where mistakes can mean death. Annoying reminders about mundane matters like how to use a seat belt reflect this relentless commitment to safety procedures. And many federal regulations <a href="https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=0bb96b748f2afdcb4dd20a9cc10f5461&tpl=/ecfrbrowse/Title14/14cfr135_main_02.tpl">govern</a> what airlines can do and even say. </p>
<p>Other high-threat sectors such as nuclear power plants, the military and the police have cultivated <a href="http://www.gelfand.umd.edu/Gelfandetal2006b.pdf">similarly tight organizational cultures</a>. And for good reason: We don’t want our surgeons, soldiers or pilots to take a free-spirited approach to their jobs.</p>
<p>But excessive tightness can also be highly detrimental. Left unchecked, organizations can become overly repressive, with employees having very little discretion and blindly following rules. United clearly took its tight culture too far.</p>
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<h2>Following the ‘book’</h2>
<p>Returning to the April incident that sparked United’s problems, why did no crew member step up to deescalate the situation before <a href="http://people.com/human-interest/david-dao-united-airlines-flight/">David Dao</a> was dragged away? From a tightness perspective, the answer is clear: Employees were all following the “book” and too fearful to challenge company protocol. </p>
<p>United workers, <a href="https://www.bloomberg.com/features/2016-united-airlines-struggles/">according to insiders</a>, quickly learn that challenging rules risks getting fired. A former United executive <a href="https://www.wsj.com/articles/behind-united-airlines-fateful-decision-to-call-police-1492384610">told the Wall Street Journal</a> that CEO Oscar Munoz, until this very incident, probably had no idea “how rule-based the employees are.” In other words, the tightness at United became too extreme. </p>
<p><a href="http://www.businessinsider.com/united-airlines-ceo-oscar-munoz-apology-david-dao-good-morning-america-2017-4">Beyond its settlement with Dao</a> and its public apologies, United must grapple with a far deeper challenge: how to create a culture that is adaptively tight. What we mean by this is a culture that balances the need for rules and coordination to minimize danger with the strengths of a loose culture that can adapt when the status quo is not working.</p>
<p>Munoz’s efforts to respond to its problems so far include <a href="https://www.c-span.org/video/?427788-1/united-airlines-ceo-apologizes-breach-trust">testifying before Congress</a> and <a href="https://hub.united.com/united-review-action-report-2380196105.html">publishing a report last month</a> listing the changes the airline will make to company policies. In another reassuring sign, <a href="http://abcnews.go.com/US/united-ceo-oscar-munoz-felt-sham-passenger-dragged/story?id=46746594">Munoz told ABC</a> that he plans to provide employees with “the proper tools, policies, procedures that allow them to use their common sense.” </p>
<p>United also announced that it will create an external “customer solutions team” that specializes in providing creative answers to crew members dealing with challenging situations.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169405/original/file-20170515-7024-g8763w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Airlines have very rules-based cultures because there are so many safety risks in the air.</span>
<span class="attribution"><span class="source">United plane via www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Loosening up</h2>
<p>While laudable, these initiatives are not sufficient to transform United’s organization on a cultural level, something that happened to JetBlue in 2007. </p>
<p>The airline infamously kept passengers on a plane on the tarmac <a href="http://www.nbcnews.com/id/17166299/ns/travel-news/t/jetblue-apologizes-after-passengers-stranded/">for as long as 11 hours</a> due to a weather-related delay, an incident that <a href="https://www.forbes.com/sites/airchive/2014/03/14/jetblue-is-its-jettitude-culture-enough-to-carry-it-into-the-future/#18698da04726">pushed the airline to reevaluate its corporate culture</a>. It began by restructuring to empower low-level personnel. Flight attendants, for instance, are now authorized to solve customer service issues on their own without consulting rules or superiors if they can be easily resolved.</p>
<p>While <a href="http://www.independent.co.uk/travel/news-and-advice/jetblue-family-kicked-off-flight-birthday-cake-wrong-overhead-compartment-new-york-jfk-las-vegas-a7736131.html">mistakes will still be made</a>, introducing looseness into employee training enabled the company to <a href="http://www.jdpower.com/press-releases/2016-north-america-airline-satisfaction-study">better adapt to customer needs and improve services</a>. </p>
<p>Giving up control is a challenge for tight cultures, but luckily, this does not mean United must throw out all its rules. The fact is many of the rules that induce its cultural tightness deliver efficiency and keep passengers safe. </p>
<p>Moderation is key. Where possible, United should assess its protocols and see where it can introduce more discretion, empowering workers to be adaptive.</p>
<p>Introducing looseness into a traditionally tight culture can be fraught with turbulence. But with lasting commitment from senior leadership, it can be done.</p><img src="https://counter.theconversation.com/content/77662/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>United Airlines’ recent stumbles suggest its culture is too ‘tight’ and constrained by rules, leaving employees little room to make judgement calls.Michele Gelfand, Professor and Distinguished University Scholar Teacher, University of MarylandVirginia Choi, Research Associate in Psychology, University of MarylandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/762102017-04-14T00:49:41Z2017-04-14T00:49:41ZHow social media turned United’s PR flub into a firestorm<p>Recent PR stumbles by United Airlines and Uber illustrate the challenges for businesses in an age when citizen activism is amplified by social media. Incidents that not so long ago would have been relatively isolated are inflaming public sentiment at a breathtaking pace, catching companies wrong-footed and significantly raising the stakes of such missteps.</p>
<p><a href="https://www.youtube.com/watch?v=VrDWY6C1178">Videos</a> showing security forcibly removing a United passenger from a flight on April 9 went viral before the plane had even taken off. It <a href="http://www.cnn.com/2017/04/11/travel/united-customer-dragged-off-overbooked-flight/index.html">sparked a furor</a> that caused United’s stock to drop and its CEO to apologize several times and <a href="http://www.latimes.com/business/technology/la-fi-united-apology-20170412-story.html">refund the fares</a> of every passenger on the flight. </p>
<p><a href="http://www.marketwatch.com/story/consumers-lash-out-at-uber-and-turn-to-lyft-after-ubers-immigration-response-2017-01-29">Uber faced a similar PR crisis</a> after it appeared to align itself with President Donald Trump’s <a href="https://www.whitehouse.gov/the-press-office/2017/01/27/executive-order-protecting-nation-foreign-terrorist-entry-united-states">refugee ban</a>. <a href="http://www.theverge.com/2017/2/2/14493760/delete-uber-protest-donald-trump-accounts-deleted">At least 200,000 people</a> removed Uber apps from their phones. </p>
<p>As my research into online social networks shows, these incidents illustrate the challenges for companies in dealing with the fallout of bad publicity as social media amplifies both the reach and range of responses available to concerned individuals.</p>
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<h2>A massive shift</h2>
<p>Social activism has fundamentally shifted in the age of social media. </p>
<p>The main difference between what happened to United or Uber today and what would have happened 20 years ago is the speed, scale and spread of digital activism. </p>
<p>Back then, we would not have the means to either raise awareness or mobilize for a cause at this speed and scale. Outrage over the Exxon Valdez oil spill in 1989, for example, <a href="https://en.wikipedia.org/wiki/Exxon_Shipping_Co._v._Baker">eventually led</a> to an award of millions of dollars in damages, <a href="http://www.nytimes.com/1990/03/01/us/exxon-valdez-the-spill-the-cleanup-and-the-charges.html">but it took months</a> for the scale of disaster to become clear and years of protracted negotiations. </p>
<p>In contrast, United and Uber faced substantial damage within hours of the incidents, resulting in boycotts and <a href="http://www.cnbc.com/2017/04/12/shares-of-united-fall-for-second-day-as-controversy-lingers.html">spooked investors</a>. </p>
<p>While some commentators say the companies’ weak responses <a href="https://www.forbes.com/sites/cherylsnappconner/2017/04/11/united-passenger-dragged-uber-blames-bad-pr-what-to-do-when-the-hits-keep-coming/#2b4284c435bf">reveal a crisis in public relations management</a>, the truth is social media’s fast pace is putting incredible demands on PR professionals.</p>
<h2>How activism goes viral</h2>
<p>As research I and others have conducted shows, there are two main mechanisms that are influential in shaping the virality of digital activism. </p>
<p>The first one involves how social media platforms like Twitter provide a leading opinion-making role to a few key (and connected) individuals, amplifying their voices and allowing videos and memes to spread. For example, the viral #DeleteUber campaign began with a <a href="http://www.chicagoreader.com/Bleader/archives/2017/01/31/the-viral-deleteuber-campaign-began-with-a-single-tweet-from-a-chicago-journalist">single tweet from a Chicago journalist</a> named Dan O'Sullivan. </p>
<p>A <a href="https://5harad.com/papers/diffusion.pdf">study of online social interactions</a> showed that a small set of “seed” users (with lots of followers) account for a disproportionately large share of viral phenomenon on social media. In other words, all it takes is a few retweets by celebrities or news personalities with sizable followings to share almost instantly a “call to arms” with thousands if not millions of users, many of whom will also retweet the video or hashtag. </p>
<p>The second mechanism involves how social media amplifies the visibility of viral phenomenon by turning more individuals into opinion makers as they easily engage with others like them (known as homophily, or a preference for like-minded others). </p>
<p>The resulting activism spirals into a large-scale online movement that is impossible for companies to ignore. In a <a href="http://www.tandfonline.com/doi/abs/10.1080/07421222.2016.1172454?journalCode=mmis20">recent paper</a> I co-authored with business professors Yong Tan of the University of Washington and Cath Oh of Georgia State University, we showed how online conversations spiral into cascades. </p>
<p>As I found in <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1984690&rec=1&srcabs=1934172&alg=1&pos=7">another study</a> with Tan and Oh, once a hashtag reaches a threshold of visibility, subsequent online conversations between individuals only magnifies the influence and spread of the hashtag. This helps turn users from passive sharers into active broadcasters. </p>
<p>While the age of TV makes it possible that one person’s act of protest (such as <a href="http://content.time.com/time/magazine/article/0,9171,2044723,00.html">self-immolation in public</a>) can be broadcast very quickly around the world, it is the opinion-making role of social media, when combined with its reach and speed, that makes digital activism compelling. </p>
<h2>Message for businesses</h2>
<p>So what does this mean for companies? </p>
<p>Because consumers often <a href="http://www.economist.com/node/4008642">consider themselves</a> to be in a “social contract” with businesses in which the latter are interested in their well-being, the biggest problems emerge when companies do something that appears to violate it. That’s what happened when United’s Muñoz <a href="http://www.cnbc.com/2017/04/10/united-ceo-says-airline-had-to-re-accommodate-passenger-and-twitter-is-having-a-riot.html">described</a> dragging a passenger off a plane as “reaccommodating” him. </p>
<p><a href="https://www.forbes.com/sites/geoffwilliams/2015/11/04/can-chipotle-survive-its-e-coli-crisis-pr-experts-seem-to-think-so-and-offer-advice/#7f2b8e663276">Some companies</a>, however, have learned how to manage the power of social media by being proactive in dealing with cultural and political issues that could trigger a backlash from consumers if poorly handled. For example, at the same time Uber’s CEO was scrambling, Starbucks’ chief executive <a href="http://www.reuters.com/article/us-usa-trump-immigration-starbucks-idUSKBN15E05X">was taking to social media</a> to emphasize his company’s support for immigration. This reinforced the social contract that the coffee chain has with its customers. </p>
<p>This, however, might be of little use after an embarrassing incident like United’s. This situation illustrates the importance of being flexible with processes, as well as communications. In <a href="http://www.businessinsider.com/amazon-jeff-bezos-united-incident-pr-fiasco-2017-4">his annual letter to shareholders released this week</a>, Amazon CEO Jeff Bezos hit this on the nose when he noted how “it’s not that rare to hear a junior leader defend a bad outcome with something like, ‘Well, we followed the process.’”</p>
<p>This is exactly what happened to United when the <a href="https://qz.com/956964/the-lessons-of-united-ceo-oscar-munozs-failed-attempts-to-apologize/">CEO’s initial defense</a> of what his crew did on April 9 <a href="http://www.nbcnews.com/news/us-news/united-boss-dragged-passenger-was-disruptive-belligerent-n745031">only exacerbated the problem</a>. </p>
<p>The old adage is that the customer is always right. Today’s fast-paced world means this idea is more important that ever, and companies need to communicate clearly and proactively to keep consumer trust when it’s violated.</p><img src="https://counter.theconversation.com/content/76210/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anjana Susarla does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Incidents that may have been mere hiccups a few years ago today can go viral in an instant, causing a massive backlash and leaving some of the biggest companies wrong-footed.Anjana Susarla, Associate Professor of Information Systems, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/762252017-04-13T11:03:20Z2017-04-13T11:03:20ZHow United Airlines broke two golden rules of marketing<figure><img src="https://images.theconversation.com/files/165200/original/image-20170413-25901-1oxvrvq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/44073224@N04/16763035370/in/photolist-rxhWpd-nkxPFg-6vPmpY-s5pszo-bA6hwf-f3dLaL-qMy2zE-qGsSqp-Fn6L8K-oBzSvh-pcmBmF-95zCt1-oEZonw-byhUVi-pdhQff-qEJe9W-g7ZknR-hu6WwH-dw2Fw5-8R8g4Q-fq3QyX-a3MFwu-nYvP1c-T9LzKM-azQUaP-dw6VwS-dw2Fys-SybBmT-TJkcvy-dvW8qK-6Vme2B-EPfS6N-418gMV-iJupCv-5auNyZ-99rfqW-67cRfM-qgvEAz-ap8WGP-yi6wh-dmnHKc-94BPDP-oAPAG-cKxorW-dw2FrL-9xKQ8L-ab2yq8-5k8tWG-f1iHU8-4DEp8s">Bernal Saborio</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>When they had <a href="https://theconversation.com/how-economics-101-could-have-prevented-uniteds-pr-nightmare-76127">passenger David Dao forcibly removed</a> from an internal flight in the US, staff at United Airlines apparently forgot two golden rules of marketing.</p>
<h2>1. Don’t let your customers get hurt</h2>
<p>Dao was asked to disembark when United discovered that the flight was overbooked. He refused, saying he needed to get to his destination <a href="https://www.thesun.co.uk/news/3323084/united-airlines-video-passenger-dragged-off-flight-dr-david-dao-latest/">in order to work</a>. An argument ensued, and airline staff sent for security guards. A video clip posted by a fellow passenger on social media appears to show Dao being dragged out of the plane, <a href="http://www.bbc.co.uk/news/world-us-canada-39586391">his face streaked with blood</a>.</p>
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<p>Oscar Munoz, chief executive of United Airlines, issued a brief apology. He <a href="http://www.cnbc.com/2017/04/10/united-ceo-says-airline-had-to-re-accommodate-passenger-and-twitter-is-having-a-riot.html">said</a>: “This is an upsetting event to all of us here at United, I apologise for having to re-accommodate these customers.”</p>
<p>But in a private email to staff – promptly <a href="http://www.independent.co.uk/news/world/americas/united-airlines-ceo-oscar-munoz-s-leaked-email-in-full-read-video-incident-dragging-passenger-staff-a7677721.html">leaked to the media</a> – Munoz was more defensive. It said: “As you will read, this situation was unfortunately compounded when one of the passengers we politely asked to deplane refused and it became necessary to contact Chicago Aviation Security Officers to help”. It added that he had been “disruptive and belligerent” and that staff had “followed established procedures”. Munoz commended staff for “continuing to go above and beyond to ensure we fly right”. </p>
<p>On April 11, however, he issued a wider ranging <a href="https://twitter.com/united/status/851875102769721344">apology</a>.</p>
<h2>2. When you apologise to a customer, sound like you mean it</h2>
<p>Airlines have, quite rightly, the authority to ask passengers to leave an aircraft if they are genuinely disruptive or are considered a threat to safety. That is as it should be. </p>
<p>But with power comes responsibility. Airline staff should be trained to use their discretion, and to know the difference between obstructive belligerence and a genuine complaint. Sadly, not all are. I was once threatened with removal from a budget airline flight in the UK when I made a – quite mild – comment about the chaotic boarding arrangements. A member of airline staff shouted at me and told me to “Fuck off back to America” (I am, in fact, Canadian). I’m still waiting for an apology.</p>
<p>These incidents should not happen, ever. Businesses live and die on the backs of their <a href="http://www.morgenwitzel.com/previews/Managing%20for%20Success%20Extract.pdf">reputation with customers</a>. Their brand value is built on the quality of service they deliver and the stories people tell about them. The stories people are telling now about United are largely negative. </p>
<p>The apology eventually issued by CEO Munoz appeared heartfelt and genuine, but it was too late. The damage, across social media and in the press, has been done. For the next little while, at least, anyone choosing an airline in the US and seeing United’s name will be reminded of the man with the bloody face – and that ghastly word “reaccommodated”.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"851875102769721344"}"></div></p>
<p>The buck in this case stops directly with Munoz. In any organisation, the tone is set at the top. His remarks to his staff suggest that United has a culture where the needs of staff are prioritised over the needs of paying customers. In this case, Dao and his fellow passengers were “reaccommodated” to make way for <a href="https://www.usatoday.com/story/news/nation/2017/04/11/united-ceo-employees-followed-procedures-flier-belligerent/100317166/">four members of airline staff</a>. </p>
<p>That must end. Munoz needs to concentrate on building a culture that puts customers first and makes quality of service a key business objective. Reward systems, bonuses and performance reviews all need to start reflecting this. Service standards need to be introduced, and adhered to strictly. </p>
<p>In this respect, United should learn from rival Delta, which was once one of the best-known airlines in America, highly profitable and popular with customers. Then the <a href="http://dl.acm.org/citation.cfm?id=1406135">culture at Delta changed</a>, and customer service suffered. Customers switched to other airlines and Delta went bankrupt. Now, Delta is thriving again, in large part due to its focus on keeping <a href="http://www.adweek.com/brand-marketing/how-deltas-focus-on-customer-experience-created-a-powerhouse-brand/">both staff and customers happy</a>.</p>
<p>Will the same thing happen to United? The damage could be serious, especially if there is another similar incident in the future. In the age of smartphones and social media, any misstep gets blown up and broadcast across the world.</p>
<p>Yet it is also highly possible that United will get away with it. Standards of service across the US airline industry are <a href="http://www.vox.com/culture/2017/4/11/15246632/united-airlines-drag-man-off-plane">already low</a>, and it probably won’t be long before another scandal at another airline is splashed across social media, and the headlines.</p><img src="https://counter.theconversation.com/content/76225/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Morgen Witzel does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>But standards of service are so low across the US airline industry that United may well get away with it.Morgen Witzel, Fellow of the Centre for Leadership Studies, University of ExeterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/761272017-04-11T19:00:47Z2017-04-11T19:00:47ZHow economics 101 could have prevented United’s PR nightmare<figure><img src="https://images.theconversation.com/files/164915/original/image-20170411-26751-b9em9a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The not so friendly skies?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/success?src=70twemYPbO4tYUvNCjQtAA-1-56">United plane via www.shutterstock.com</a></span></figcaption></figure><p>On April 9, a <a href="https://www.nytimes.com/2017/04/10/business/united-flight-passenger-dragged.html">passenger was forcibly removed</a> from a United Airlines flight from Chicago O’Hare to Louisville after the carrier was unable to find volunteers to accommodate four of its employees on standby.</p>
<p><a href="https://www.youtube.com/watch?v=3FbdPQM3JDQ">Dramatic videos</a> of the incident have gone viral on YouTube and social networks, and I reckon the resulting cost of this PR disaster will likely make United’s CEO wish he had sent in a private jet to ferry those employees to Louisville (which the airline could easily have afforded, given its <a href="http://newsroom.united.com/2017-01-17-United-Airlines-Reports-Full-Year-and-Fourth-Quarter-2016-Performance">net income</a> of US$2.3 billion in 2016).</p>
<p><a href="http://www.economist.com/blogs/gulliver/2017/04/when-ticket-not-enough">Many articles</a> have reported that airlines routinely overbook their flights, and sometimes passengers have to accept (voluntarily or not) the inconvenience of getting to their destination later than planned. </p>
<p>As an airline economist, I do not recall, however, such a situation ever escalating to the level it did on that United flight. The incident raises many questions, including why airlines overbook and what the carrier could have done differently. </p>
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<h2>Airline economics 101: Why they overbook</h2>
<p>Overbooking is indeed something that the airlines routinely do, and it represents a rational behavior for a carrier that sells some of its tickets as fully refundable contracts (mostly to business customers who pay the highest rates). </p>
<p>While the last few years have generally been <a href="http://www.iata.org/pressroom/pr/Pages/2016-12-08-01.aspx">good for airline profitability</a>, the brutal truth is that profit margins have been rather low historically. <a href="https://www.iata.org/whatwedo/Documents/economics/profitability-and-the-air-transport-value%20chain.pdf">Airlines rank</a> below most other industries in terms of return on invested capital, according to the International Air Transport Association. </p>
<p>An airline that does not overbook risks finding itself in a situation in which several cancellations from high-yield passengers flying on refundable fares (the most expensive airlines offer) can turn a profitable flight into a loss-making one. Airlines <a href="http://mathemathinking.blogspot.co.uk/2013/05/the-math-behind-overbooking-flights.html">have quite a lot of information</a> on cancellation patterns for different flights, and they decide on how many seats to overbook based on this.</p>
<p>Overbooking has likely contributed to the rising “load factors” in the U.S. airline industry. Load factors – the share of airline seats occupied by passengers – on U.S. domestic flights <a href="https://www.transtats.bts.gov/Data_Elements.aspx?Data=5">have gone up</a> from just under 80 percent in 2007 to almost 85 percent in 2016. Keeping airplanes as full as possible clearly helps airlines stay in the black. </p>
<p>Of the major U.S. and European airlines, only <a href="https://corporate.ryanair.com/about-us/passenger-charter/">Ryanair</a> does not deliberately overbook its flights, to my knowledge.</p>
<p>To the best of my knowledge, the airline industry is the only one that practices overbooking. This is done mostly because it is comparably easy for the airlines to provide their passengers with alternative ways of getting to their final destination. For instance, United provides five daily flights from Chicago to Louisville, giving the airline quite a bit of flexibility.</p>
<h2>Ins and outs of overbooking</h2>
<p>So what happens if a flight is overbooked? </p>
<p>The airline starts by looking for volunteers, offering the passengers travel vouchers or sometimes cash for taking a later flight. U.S. and European airlines are technically not required to offer anything to the passengers for voluntarily giving up their seat (the law stipulates only that the airline and the passenger come to an agreement on conditions under which the passenger volunteers to take a different flight), but most airlines tend to offer travel vouchers. </p>
<p>If not enough volunteers are found, passengers will be bumped off involuntarily, in which case, <a href="https://www.transportation.gov/airconsumer/fly-rights">both U.S.</a> and <a href="http://www.airpassengerrights.eu/en/your-rights-a-summary.html">EU laws</a> require airlines to provide financial compensation to the passengers. </p>
<p>The airlines take your “status” and other factors into account, so you are less likely to be denied boarding if you are traveling on an expensive fare or hold an elite status in the airline’s frequent flier program.</p>
<p><strong>Pro tip:</strong> In both jurisdictions, laws provide for compensation in cash. So if you are offered travel vouchers in return for being involuntarily denied boarding, it is your right to refuse and demand cash compensation instead. </p>
<h2>UA3411 veers off course</h2>
<p>Basically, this is where things went wrong for UA3411. Because United could not get enough volunteers, it started the process of removing passengers from the plane involuntarily, and chose four at random. </p>
<p>Since taking off with more than the maximum allowed number of passengers on board is a serious violation of safety rules, the airline has every right to ensure that there are no extra people on board when the aircraft taxis from the gate. </p>
<p>The issue in this case, in my opinion, is that United did not do all it could to prevent the situation from escalating to the point where it became what will likely be an expensive PR issue, if not a legal and <a href="http://thehill.com/policy/transportation/328196-dem-wants-hearing-after-united-passenger-dragged-off-flight">political</a> one.</p>
<p>Even if just 1,000 passengers decide over the next month to fly with a rival instead of United because of this incident, we are talking about a third of a million dollars in lost revenue, giving the <a href="https://www.rita.dot.gov/bts/press_releases/bts04_17">current average airfare</a> of about $340. </p>
<p>And that’s without factoring in the cost of repairing the airline’s image (which explains why <a href="http://thehill.com/blogs/blog-briefing-room/news/328235-united-shares-drop-after-passenger-dragged-off-flight">its shares tanked</a> on the stock market).</p>
<h2>Simple economics</h2>
<p>What could United have done differently? </p>
<p>From the point of view of economics, the airline’s inability to find volunteers means that the compensation offered was too low. <a href="https://www.nytimes.com/2017/04/10/business/united-flight-passenger-dragged.html?_r=0">Some accounts</a> of the incident suggest that the airline offered $400 for the passengers to volunteer to take a flight on the next day, and the offer was later raised to $800. </p>
<p>While $800 seems like good money for the inconvenience, passengers apparently put a higher value than this on their desire to get to Louisville (recall that the flight in question was on Sunday evening). In fact, I guess your boss would be more sympathetic with you missing a day at work if this were due to the airline bumping you off a flight than you volunteering to spend a night away (especially since you will end up with a travel voucher or cash in your pocket either way). </p>
<p>Regardless, the airline would definitely have found volunteers if it had kept increasing the offer. Whether the airlines’ employees had the authority to do it is another matter, as the company may have put a limit on how much it could offer.</p>
<p>More generally, to reduce the likelihood of involuntarily denying boarding to passengers in the future on oversold flights, airlines could introduce some sort of auction system to look for volunteers. The airlines could either gradually increase their compensation offer or even ask customers to name their own price for volunteering. It seems that <a href="http://www.pbs.org/newshour/making-sense/how-delta-masters-the-game-of-overbooking-flights/">Delta is already doing this, as a matter of fact</a>.</p>
<p>Such a system should not be too onerous to implement. Airlines these days have plenty of ways to contact passengers via text or app. The entire process could be run without creating much fuss in the airport, and even in a way that few even are aware the flight was overbooked.</p>
<h2>A rare problem, big headache</h2>
<p>Fortunately, denied boarding is in general not a major issue for airlines. </p>
<p>According to the Department of Transportation, <a href="https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_64.html">less than one-tenth</a> of 1 percent of all passengers are denied boarding, and only one in 10 of those are involuntary. </p>
<p>Still, airlines are well-equipped with all the data and related technologies needed to make sure that all the passengers on oversold flights are reaccommodated voluntarily – and are not involuntarily dragged off a plane in such a horrifying manner.</p>
<p>I hope the incident on April 9 will make them consider making the appropriate investment into tackling this issue.</p><img src="https://counter.theconversation.com/content/76127/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Volodymyr Bilotkach is affiliated with IATA as an External Instructor for IATA Training. </span></em></p>Videos of a United passenger being involuntarily dragged off a plane went viral, creating a PR disaster for the company – one that could have easily been avoided.Volodymyr Bilotkach, Senior Lecturer in Economics, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/733102017-02-23T13:46:16Z2017-02-23T13:46:16ZWarren Buffett’s latest stock play is a clue for reading the Trump-era economy<p>While political analysts and journalists obsess about President Donald Trump’s executive orders and their constitutional significance, the investor Warren Buffett has made his judgement clear on how the economy could look during the Trump years. In a massive stockmarket move, he has dumped nearly a billion dollars of long-held shares in retailer Walmart in favour of tech and airline stocks.</p>
<p>This demonstrates an <a href="https://news.thestreet.com/independent/story/14006576/1/you-didn-t-think-warren-buffett-sold-out-of-walmart-for-no-reason-did-you.html">astonishing change of heart</a> for Buffett, who as recently as 2013 referred to the US airline industry as a “deathtrap for investors”. He was equally renowned for dubbing Apple’s shares “grossly overvalued”. His perennial faith in retail stocks seems to have evaporated, too, with the world’s most influential investor selling off his entire $900m stake in Walmart. </p>
<p>Buffett’s complete divestment of his Walmart stock, a company he once deemed his <a href="http://uk.businessinsider.com/warren-buffett-drops-walmart-stock-2017-2">safest and most prized investment</a>, comes at a time when America’s traditional retail giant has seen its market share eaten up by Amazon and other online competitors. While Buffett is by no means a short-term trader, his sale of Walmart shares reveals a potential long-term shift in the tide of e-commerce and online retailing. </p>
<p>Former Walmart boss Mike Duke <a href="http://uk.businessinsider.com/warren-buffett-drops-walmart-stock-2017-2">acknowledged in 2012</a> that his greatest regret as CEO was not pursuing e-commerce more aggressively to stave off competition from Amazon. “Right now we’re making tremendous progress, and the business is moving, but we should have moved faster to expand e-commerce,” he said at the time. This is reflected in a declining trend in Walmart’s share price, <a href="https://www.bloomberg.com/quote/WMT:US">which has fallen</a> from almost US$92 in January 2015 to US$71.45 in February 2017. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=216&fit=crop&dpr=1 600w, https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=216&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=216&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=272&fit=crop&dpr=1 754w, https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=272&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/157898/original/image-20170222-6431-1ptrk7z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=272&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Walmart Stores Inc Share Price.</span>
<span class="attribution"><span class="source">https://www.bloomberg.com/quote/WMT:US</span></span>
</figcaption>
</figure>
<p>Even though Walmart has since invested heavily in e-commerce, it remains a niche player compared to Amazon. In 2015, Walmart’s online sales of US$13.7 billion <a href="http://uk.businessinsider.com/warren-buffett-drops-walmart-stock-2017-2">were dwarfed by</a> Amazon’s mammoth US$107 billion. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=448&fit=crop&dpr=1 600w, https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=448&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=448&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=563&fit=crop&dpr=1 754w, https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=563&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/158117/original/image-20170223-24107-18a1ub1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=563&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Walmart has been fighting off the challenges from e-commerce.</span>
<span class="attribution"><span class="source">Mike Mozart</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Moreover, 2017 could prove to be a particularly challenging year for Walmart. Since the last quarter of 2016, the US economy has witnessed increases in gas and food prices, <a href="http://www.forbes.com/sites/judeclemente/2017/01/11/short-term-outlook-for-u-s-natural-gas-prices-january-2017/#65a27c7167c8">pushing up inflation</a>. In addition, <a href="http://fortune.com/2017/01/23/tax-refund-delay-2017/">delays in tax refunds</a> will further crush consumer spending. Walmart’s sales <a href="http://uk.businessinsider.com/warren-buffett-drops-walmart-stock-2017-2">thrive during the tax refund period</a>, with almost 35% of its yearly sales coming from the tax season alone. Walmart’s flagship two-day shipping subscription service, ShippingPass, is also expected to struggle against the more popular Amazon Prime. </p>
<h2>Big bite of Apple</h2>
<p>The sale of Walmart shares enabled Buffet’s Berkshire Hathaway to quadruple its stake in Apple and <a href="http://www.independent.co.uk/news/business/news/warren-buffett-quadruples-investment-apple-american-airlines-delta-united-monsanto-billionaire-a7580786.html">raise its stake seven-fold</a> in the four biggest US airlines. The recent regulatory 13-F filings to the Securities and Exchange Commission reported Berkshire Hathaway owning 57.4m shares of Apple worth US$7.74 billion. This is up from 15.2m shares in September 2016. The investment seems to have raised a few eyebrows since Buffett has always been a <a href="http://www.kiplinger.com/article/investing/T052-C008-S001-3-reasons-warren-buffett-is-buying-apple-stock.html">reluctant tech-stock buyer</a>.</p>
<p>Berkshire took advantage of periodic dips in Apple’s share price during the final quarter of 2016 by amassing its stake in the company when the <a href="https://www.bloomberg.com/quote/AAPL:US">price was fluctuating</a> between $90 and $118 per share. Apple’s share price <a href="http://www.kiplinger.com/article/investing/T052-C008-S001-3-reasons-warren-buffett-is-buying-apple-stock.html">currently stands at $136 per share</a> owing largely to high retention rates among iPhone buyers. In addition, analysts are expecting record sales of the new iPhone later this year, which is expected to push Apple’s share price even further. </p>
<p>Apple is also set to benefit from <a href="http://bgr.com/2017/02/20/iphone-8-rumors-wireless-charging-battery/">Samsung’s misfortunes</a>, due in no small part to the farcical battery problems of its Note 7 and the resulting delay in the Samsung Galaxy S8. In the event of bumper iPhone 8 sales, the projected 16.6% gain in Apple’s share price would leave Berkshire Hathaway with a $1.1 billion profit in 2017 alone. </p>
<h2>High-flyer</h2>
<p>Moreover, Berkshire also reported a $9.3 billion share <a href="http://www.independent.co.uk/news/business/news/warren-buffett-quadruples-investment-apple-american-airlines-delta-united-monsanto-billionaire-a7580786.html">purchase in the airline industry</a>, with investments spread across American Airlines Group, Delta Air Lines, Southwest Airlines and United Continental. His stake in the four biggest US airlines follows his remarkable turnabout on airline stocks, an industry he <a href="http://www.chicagotribune.com/business/columnists/ct-buffett-united-airlines-robert-reed-0216-biz-20170215-column.html">famously detested</a> for two decades after an unhappy yet profitable investment in US Air Group. Buffett’s interest in airline stocks reflects the overall strength of the US airline industry and – from a consumer perspective – the lack of product differentiation in terms of flight quality, air fares and customer service. </p>
<p>The US airline industry has <a href="http://uk.businessinsider.com/warren-buffett-10-billion-airline-investments-reveal-2017-2?r=US&IR=T">experienced astonishing growth</a> since the financial crisis. All four airlines have reported record profits aided by consistent passenger capacity, lower labour costs, cheap oil and expansion to domestic and international destinations. The industry is also set to receive a <a href="http://fortune.com/2017/01/30/donald-trump-paris-agreement-climate-change-withdraw/">significant operational boost</a> following Trump’s announcement of plans to scrap the Paris agreement on climate change, which would otherwise restrict airlines’ ability to expand flight frequencies and new routes. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=492&fit=crop&dpr=1 754w, https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=492&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/158116/original/image-20170223-24077-17kmpma.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=492&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Soaring to new heights?</span>
<span class="attribution"><span class="source">Sergii Kononenko/Shutterstock.com</span></span>
</figcaption>
</figure>
<p>In addition, a wave of airline mergers and consolidations, coupled with homogeneity of air fare and in-flight services, have made the big four airlines a <a href="https://www.bloomberg.com/news/articles/2017-02-15/airlines-rise-to-a-record-as-buffett-s-berkshire-deepens-bet">dominant force</a> in the domestic market. According to Jim Corridore, a research analyst at CFRA, the big four US airlines are following a cost-control and flight demand model, which bodes well for shareholders – as their focus is not to be the biggest carrier, but the most profitable one. The Bloomberg US Airlines Index has witnessed a steady rise over the past five years. The combined share price of the index has surged from US$30.91 in February 2012 to its current price of $131.53. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=216&fit=crop&dpr=1 600w, https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=216&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=216&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=272&fit=crop&dpr=1 754w, https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=272&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/157904/original/image-20170222-6440-vihanx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=272&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bloomberg US Airline Index.</span>
</figcaption>
</figure>
<p>While the jury is still out on Buffet’s astounding investment coup, they highlight Buffett’s favourite investment axiom:</p>
<blockquote>
<p>The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot … And if people are yelling, ‘Swing, you bum!’ ignore them. </p>
</blockquote>
<p>It seems traditional retail companies are no longer palatable to Buffett’s precise investment delectation. The future, according to Buffett’s recent stock trades, lies in industry consolidated, demand-led tech and airlines.</p><img src="https://counter.theconversation.com/content/73310/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hassaan Khan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The billionaire investor has dumped groceries in favour of tech and airline stocks.Hassaan Khan, Deputy Head of Department (Accounting & Finance), Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.