As I’ve been reading the mass media and PR trade journal articles on the recent United Airlines fiasco, I’ve noticed a consistent theme: people have critiqued how United and its CEO have responded–and I agree, it’s been pitiful–but what’s missing from these stories is that at the end of the day, it doesn’t matter what United does.
In other words, a company like United can treat its employees and passengers however it wants, it can completely whiff in responding to crises and it can continue to offer horrible service, but subsequently, it will still remain in business. That’s because United, American, Delta and Southwest are essentially an oligopoly of U.S. air travel. Consumers have few options, and these airlines know it.
It’s no surprise that consumer complaints against the airlines increases each year. Still, airlines can make flying even worse than it already is–for example, reduce seat sizes by half, charge for water and ban carry-on bags–but as soon as they dangle a special discount on a flight, consumers always will grudgingly come back.
Think about other industries, such as cable providers and cellular providers. They, too have large amounts of complaints, but with little competition, there’s no incentive for these companies to have a customer-centric focus (despite what they say publicly).
And that’s exactly why United won’t suffer any long-term damage.
Update: April 17
The New York Times published an op-ed that mimics my points, stating “an industry that is not naturally competitive … (became) an unregulated cartel. This restored profitability, but at awful costs both to customer convenience and to economic efficiency as well.”