Sylvie and Hannah grew up as best friends. Even after they settled in different cities, they remained in close contact.
After Sylvie became engaged, she was so eager for Hannah to attend her wedding that she offered to pay the airfare for Hannah to participate in the celebration. Hannah left for the airport with plenty of time to spare, but a multi-car accident delayed her arrival. When she finally got to the gate, the plane had not yet taken off, but the agent had already bumped her from the overbooked flight. The agent offered to book Hannah on a flight the next day and gave her a $500 gift card as compensation for her delay.
Since the later flight would not allow Hannah to reach her destination in time to attend Sylvie’s wedding, she called off the trip. But who is entitled to the compensation money—Sylvie or Hannah?
Grapple with the Gray
List two or three reasons why Sylvie should get the money.
List two or three reasons why Hannah should keep the money.
Is there another alternative?
Having weighed the options, how would you resolve the question?
Gray Matters
Why do airlines overbook?
It’s a numbers game. They want to be able to allow passengers the privilege to cancel or reschedule up to the last minute. According to one estimate, passengers show up for their reserved seats about 93 percent of the time. That means that if airlines book 107 passengers for every 100 seats, they have a good chance of filling every flight.
Of course, sometimes the odds don’t cooperate. That’s when people get bumped.
Is it ethical for airlines to overbook? That’s a more complicated question.
In one sense, the chance of ending up on an overbooked flight is a price that passengers are willing to pay for the security of being able to rebook or cancel. Then the question becomes: How does the airline determine which passengers get bumped on an overbooked flight?
Common practice has become offering cash incentives to passengers willing to give up their seats to take a later flight. (My wife was delighted when we received $1,400 in prepaid credit cards and a free night at the airport hotel to delay our departure until the next morning; the compensation was well worth our inconvenience.)
That seems to be the critical point here. The airline pays bumped passengers for their inconvenience, calculating that over time it will earn more by filling more seats than it will pay out by paying off passengers to delay their travel plans.
Based on that logic, it seems that Hannah should keep the $500. Indeed, if Hannah would have been able to catch a later flight and still make the wedding, then the money would be indisputably hers, since it was her inconvenience.
However, Hannah was not delayed. Because she missed her flight, she had to cancel her trip altogether. Her inconvenience, as it turns out, was a wasted trip to the airport, which is probably not worth $500. There is also the “inconvenience” to Sylvie, who will miss the participation of her friend in her wedding ceremony.
Needless to say, Sylvie is entitled to recover the cost of Hannah’s ticket. If the airline offers a refund or credit, then a reasonable solution is for the two friends to split the $500. If the ticket is lost, then the price should be deducted from the $500 and the friends can split the difference.