After a nine hour delay and an unexpected visit to the Ramada Inn at JFK, I've reached the promised land of Buenos Aires. Having arriving a mere three hours ago, I can't speak much to the city—San Telmo, the neighborhood in which I'm staying has pretty buildings; narrow, poorly maintained sidewalks; a lot of trash; and a very good, English-style pub.
However, after nearly 24 hours in the airline ringer, I feel more than qualified to give those guys a few ideas about how to run things. First off, American Airlines is something of a disaster. When I flew Virgin America out to California a week and a half ago, I was pleasantly surprised by the excellent personal entertainment system and the mod purple and red lighting, which was a nice contrast to the death white glow of most carriers. It almost made me forget that the air conditioning went out for most of the trip from LA to New York.
American, in contrast, flies a rickety old 767 on their New York–Buenos Aires route that's full of that death white glow. We were delayed because the plane we were supposed to take "broke"—yes, that was the official reason—and the new plane they brought in 9 hours later was not much better. The bird could fly, but instead of personal entertainment systems we got alternating episodes of Cheers and Fraiser played on small communal screens. How much Kelsey Grammar can one take?
Entertainment systems, though, are a very small part of flying. How an airline deals with the unexpected is much more important. On this count American failed miserably. Once the "broken" plane proved irreparable, American delayed the flight until they could get a new plane in, which wasn't 7:30 a.m. the next morning. They had 250 or so pissed off Argentines and Americans on their hands who all needed a place to stay until the plane could get off the ground.
American chose a classic queue system to solve the problem. Everyone on the plane exited the gate area, lined up at the main ticket counter, and waited on line as American handed out vouchers for a night at the Ramada Inn, and two meals. Had I been one of the first to hear about the delay, I could have rushed to the front of the line and been in my hotel bed by about 10:00, I suspect. As luck would have it though, I was watching the Yankee game at an airport bar, and discovered the delay only after almost everyone on the flight had already left the gate. I wasn't the last in line, but I was certainly in the later half, and it took two hours from the time I entered the line to my tired flop into the creaky Ramada bed after midnight.
The line at the airport took about an hour and fifteen minutes, and when I arrived at the Ramada I was, unsurprisingly, greeted by another long line that took nearly half an hour. As a University of Chicago man, I feel a certain affinity for the free market, even if I'm often skeptical about it's applications. In his justly famous Intro to Micro Econ class at Chicago, Allen Sanderson likes to recount an airline example of why an auction system works better than a queue system for allotting goods. It has a lot of resonance with last night's case.
Until fairly recently, Sanderson recounts, airlines dealt with overbooked flights by merely kicking off the last few people to check in. If the airline booked 260 on a flight of 250 and you were number 251 to check in, you could start making other travel arrangements. This probably pissed a lot of people off. "Why me?" I was delayed in traffic, I just got in from another flight that was late, etc. The system wasn't making people happy, and unhappy people don't make good costumers. So the airlines wised up and switched systems.
Instead of apportioning seats on a first-come-fist-serve basis, the airlines offered a reward for giving up your seat. Through a sort of reverse auction, the airlines found the people with what economists would call the "lowest opportunity cost," in other words, the guy who would give up his seat at the lowest cost to the airline. The people who took the deal got something out of it, and the airlines could run their operation efficiently. As a good Chicago economist would say, they introduced choice into the equation and the system became more efficient.
Now, for my suggestion for long flight delays and cancellations. Don't make people wait in line for well over an hour just to send them all to the same hotel where they have to wait in another long line. That's bureaucracy at its worst, and it's plain un-American. Here's what the airlines should do. Figure out how much they're willing to spend on a passenger and just give them that money in cash. When I finally got to the front of the line, I was told that I needed to hurry because there were only 29 rooms left. I don't know if everyone on that flight ended up getting a room. I suspect not. But it didn't have to be that way.
I, along with many other New York–based passengers, would have gladly accepted, say, $100 to take a cab home and get some sleep. I didn't really want to sleep in the Ramada, but I didn't want to spend over $100 on cabs just because the airline couldn't get its act together.
I suspect others on the flight, and I would have been tempted to join this group also, might have just pocketed the $100, forsaken the five hours of Ramada Inn sleep and dreamed of just how much steak $100 could buy them in Argentina (I haven't been to a steak house yet, but my impression from the tour books is that it could buy between 7 and 10 good steaks). The Ramada room shortage would have been solved, and handing out $100 to every passenger would have been much simpler than ordering up three separate kinds of vouchers while worrying about placing families together, etc. American could have sent a bunch of workers home sooner and would have had happier customers. Of course, they could have solved this whole problem in the beginning by having a plane that didn't "break," but problems do occur in the airline industry, and this is one way they could solve them more artfully.
I don't imagine that many entries to Type and Tonic will read as much like pseudo-Freakonomics, but I figured that I might as well rant on this while it was still current. More from el Sur later on in the week.
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