Here's the explanation:
2016 Passenger mile yield
Delta 15.85¢
United 13.65¢
2016 Passenger revenue per available seat mile
Delta 13.41¢
United 11.31¢
So Delta passengers pay around 16-19% more than United passengers on average, there's where the extra DB money is taken from. It's not that it's not economically rational. It just requires raising prices or lowering costs to match the predicted costs of DB compensation, and as there's a limit to how low costs can go (UA's costs are already lower than DL). So let prices go up for UA too so they can afford it: afford to let their aircraft collect dust on the tarmac for a whole morning and besides the cost of opportunity incur extra airport fees, afford to pay for the costs of delaying 5 or 6 flights an aircraft had to do that day, afford the extra labor costs of rebooking dozens of passengers, the extra costs of sending baggage that won't make the connection, the extra cost of hotels for those passengers that will require so... All of that because they will be unwilling to shuffle crew lest some random doctor be inconvenienced.
Let's consider the other side of this: UA has arguably weakened their brand to the point that they're getting 16-19% less for a similar flight. Even ascribing some of this to differences in route systems, it suggests that pax are not exclusively price conscious.
And I'm back to my point from elsewhere: UA is already pulling in less than DL on its seats. There are plenty of people who will take UA for a deep enough discount, but how much further down can UA let RASM fall? Somewhere not far below $0.11 they start running into trouble.
Originally Posted by
robinhood
I think UA would have to be extremely shortsighted to be focusing on WHERE the IDB occurs rather than keeping them from occurring in the first place. Fair or not, if one more youtube video comes out of someone getting dragged away by security after being bumped, whether it's off the plane or from the gate podium, that will be the nail in the coffin. And they must be aware that there are plenty of opportunists out there itching to be the next Dr. Dao.
I don't think it will be the only change...but I think it is rational for UA to adjust policies so that they'll never be IDBing anyone after they're onboard. Deboarding for a safety reason, sure, but not IDBing.