For example, many people have pointed out that United might have avoided the entire fiasco by simply offering the passengers more money to leave the plane. By law, airlines are required to offer compensation—up to four-times the value of the ticket, or $1,350—before booting customers from the flight. But a free market solution would require the airlines to raise the compensation offer indefinitely until somebody accepted the offer. It’s a simple matter of fairness: If airlines are legally permitted to make false promises—and to overbook a flight is, essentially, to promise a service that cannot be fulfilled—they ought to pay market price to compensate people for the unfulfilled promise. Instead, airlines are permitted to practice a kind of bizarro capitalism, in which they can overbook with impunity and throw people off the plane after they reject an arbitrary fee.
Domestic airlines are now enjoying record profits, having flown more passengers each year since 2010. This is in part because the airline industry is sheltered from both antitrust regulation and litigation. Four carriers—United, Delta, American, and Southwest—earn more than $20 billion in profits annually and own 80 percent of seats on domestic flights. Along with cable companies, airlines are the top-of-mind paragon for industries that seem to get worse for consumers as they become more heavily concentrated. Indeed, when fuel prices fell last year, as The Atlantic’s Joe Pinsker (who edited this story and who has a relative who works at United) has written, airlines spent the savings on stock buybacks rather than pass them to consumers.
Meanwhile, if customers are shocked by the fine print of United’s contract of carriage, what recourse do they have against the company? Very little. In the last decade, class-action lawsuits have become endangered thanks to a series of Supreme Court rulings that have undercut consumer rights. Disputes over fine-print regulation are increasingly likely to be settled in arbitration, without a judge or jury, where the deck is stacked against the individual plaintiff and the decisions are practically impossible to appeal.