Freeman

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A Mad Scramble at 30,000 Feet

Airlines Should Consider Well-Known Solutions to Their Tragedy of the Commons Problem

FEBRUARY 01, 2000 by EDWARD LÓPEZ

Edward Lopez is an assistant professor of economics at the University of North Texas (elopez@econ.unt.edu, www.econ.unt.edu/elopez).

Airlines have been taking it on the chin lately. Travelers are busier, delays are likelier and longer, airports are bursting at the seams, and FAA complaints have doubled. Last summer Andy Rooney stood up for all travelers on his 60 Minutes commentary when he raged at the airlines, “we’re sick and tired and we’re not going to take it anymore!” The airlines aren’t sitting on their tail fins, either. On June 29, 1999, the industry announced its Air Traveler’s Bill of Rights, with gems such as declaring the passenger’s right to access the court system. Then in August 1999, American Airlines and United Airlines publicly apologized to passengers for severe delays at busy airports.

This is a difficult situation for the airlines because passengers are partly responsible for delays. Excess carry-on baggage, in particular, costs the airlines a lot of time and money. In December 1998, United installed baggage templates at X-ray machines to prevent passengers from carrying on bags larger than 14 inches long or 9 inches tall. American Airlines did the same thing a year later. Their thinking is that less time will be wasted scrambling for overhead bin space, which will get passengers to their seats sooner and help eliminate delayed departures. Sounds good in theory. But will it work?

A healthy dose of economic analysis promises an efficient solution to this problem that will suit everyone involved.

First the problem. Most people do not like to check their bags because it adds time and the risk that the airline will misdirect, damage, or lose the luggage. Airlines figured this out long ago and recognized that without some restrictions, most passengers would try to carry on all their bags. This would be a problem (not enough space) as well as a safety hazard. In response, airlines began to limit the amount of luggage passengers may carry onto the plane—typically two pieces of a certain size. These restrictions are meant not only to ensure passenger safety, but also to create an equal amount of carry-on space for all passengers.

Anyone who has taken a flight recently knows the system doesn’t work. Airplanes have two areas for you to place carry-on baggage: the small space beneath the seat in front of you and in the overhead bins. Most passengers prefer to put their bags overhead so they can have more legroom. People who get on the plane first tend to stow both bags up there. Soon the bins fill up and people who board the plane later cannot find overhead space. Passengers become frustrated as they scurry up and down the aisle looking for an open bin. Flight attendants get flustered and often have to gate-check extra bags. As a result, the departure is usually late by a few minutes, and if it isn’t, it’s because the airline has factored this wasted time into their schedules. In short, no one is happy.

People Differ

Airlines need to recognize that people are not all the same. When you spend time at the baggage carousel, you’re giving up some other use of that time. You could be in the airport lounge having a drink, or looking for the friend who is picking you up, or making your way home in the comfort of your own car. Every traveler values that time differently. Similarly, people may evaluate the risk of checking their bags differently. Some infrequent flyers might be uptight about turning their valuables over to blue-collar baggage handlers with reputations born of Samsonite commercials. Others might not give too much thought to it because they’ve checked bags a hundred times and never had any problems.

It is an obvious point: people value time and risk differently. But that point can help us to understand the problem and to find a solution. In other words, when no one is happy, economics can help.

This problem has long been understood as the “tragedy of the commons.”* Whenever a valuable resource is commonly owned, every individual “owner” tends to use more than his “fair share” because, while enjoying the benefits, he does not absorb the full cost of doing so. When most people act this way, the result is a general overuse of the resource and an overall unhappy ending for everyone involved. Similar tragedies occur everyday: congestion on interstate highways, overhunting of elephants in Africa, overfishing in the north Pacific. Because of airline policy, overhead bins, too, have become a tragedy of the commons. But there are workable and well- known solutions to commons problems. Reconsidering the airlines’ situation in this framework should help us figure out what would be the best way to make travelers and airline personnel happier.

ASSOCIATED ISSUE

February 2000

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