It is not a surprise that an airline CEO like Scott Kirby of United Airlines is not in favor of a cash-based European-style compensation system for flight delays and cancellations. I was a bit surprised, however, at his use of a false dichotomy of safety versus cost to make his point.
Why United Airlines CEO Is Against European-Style Compensation For Flight Delays + Cancellations
Touting United’s expansion in Denver, Kirby made his media rounds on Tuesday, appearing on several TV and radio programs. Kirby was asked repeatedly about the Biden Administration plan to introduce consumer protections for delays and cancellations similar to EU261/2004, which protects consumers traveling to/from the European Union or on a European carrier.
In short, such protections obligate carries to provide cash compensation for delays within their control, including crew scheduling and mechanical delays. The compensation amount is based upon the length of they delay in reaching a passenger’s final destination.
Speaking to NPR’s Morning Edition, Kirby attempted to pin the blame for most operational mishaps on air traffic control or weather:
I saw the secretary of transportation two weeks ago, and I’ll tell you exactly what I said to him, which is we have every motivation to run a reliable operation because that’s what’s best for our customers, which means that’s what’s best for our business. And we are doing that. By far the biggest issue that we have is the weather and air traffic control delays. I mean, every day it’s chronic. Every day we wake up to restrictions in the amount of capacity that we can have, and that bleeds through the rest of the system.
I think we can stipulate that is the case. Indeed, the weather causes far more problems than does mechanical issues. The stressed air traffic control system and shortage of air traffic controllers also exacerbates matters.
But that’s not what this delay compensation is about. In those sorts of situations, the obligatory cash compensation would not apply. Where it would apply is in the case of the mechanical delays Kirby suggests are so rare.
Then Kirby takes an odd turn.
But I think the most important point is safety. We start from Day One with every employee — we drill it into them that safety is No. 1. You don’t think about costs. And if you all of a sudden start saying, well, there’s a big expense associated with delaying or canceling this flight – I don’t want to chip away at that safety foundation with the pilot or mechanic in the back of their minds saying, “Well, this is a close call and it’s going to cost a lot of money” – we shouldn’t do that.
I find that to be a rather startling admission.
Sure, most things in life, including mechanical delays, may be a cost-benefit analysis. A flight may take a delay if the engine won’t start, but may not if two of the onboard lavatories are out of commission provided two others are functioning.
But I’d like to think that whether there would be cash compensation due or not, safety would never be comprised. In other words, whether a plane is safe or not to fly is a unique and different calculus from the financial impact of a delayed flight.
Perhaps that’s naïve. Perhaps whether delays occurs always involves some sort of balancing test, even for more serious matters.
On CNBC, Kirby was also asked about the potential new consumer protections and said:
We already take care of our passengers for things within our control and United is at least running the best operation we’ve ever run in our history. We’ve got 10% more pilots per block hour, double the amount of spare investment this year, 25% more spare aircraft, the biggest issue with us is air traffic control. Every day we wake up to air traffic control delays.
The more important issue on this is safety. We’ve built the safest system in the world. We shouldn’t chip away at that foundation by asking our employees to balance safety with cost. We have a culture where we just don’t do that.
Yes, I think that last sentence is true and I think I speak for all of us in hoping that the introduction of an EU261-style compensation system in the USA would not change that at all. The only right answer is that any malignant safety issue is addressed before the aircraft takes off.
And no, United does not always “take care” of passengers for delays within its control. A recent flight was delayed nearly three hours due to a crew scheduling issue and there was no compensation offered. Certainly, when there is compensation offered it is in the form of miles or future flight credit, not USD.
It is of course not surprising that Kirby is averse to obligatory cash compensation for delays and cancellations in the USA. But am I the only one who is troubled by his hint…some might even call threat…that such a system would actually jeopardize the safety of flights?
I’d say Kirby’s messaging is off here and he would be better served implementing protocols to protect passengers in case of these delays and cancellations that make any sort of government-backed mandate superfluous.
I’ll be completely honest with you, it freaked me out the moment I heard him make that statement. So what does that mean exactly ?? Does that mean that EU carriers already fly unsafe aircraft and have a safety issues in their everyday operations because of their compensation policies ?? Does that mean that EU carriers are OK flying while compromising safety and obviously it’s not OK here in America?? Does that mean that since the airline will now have to compensate generously it can’t afford both a safe operation and passenger rights and will now be forced to choose ?? Or was that just a dirty dumb threat by this guy and a total cheap shot. I think he should reconsider his language and set the record straight, he’s truly smarter than that. Food for thought…
Scott frequently speaks off the cuff, and his candor is often refreshing, but this is one instance where his on-the-fly thoughts really don’t make much sense.
I think of last night at EWR, where a number of widebody international flights were delayed (and cascaded throughout the evening) due to gate availability issues because United didn’t have enough Move Team members available to shuttle airplanes around the field, like from Terminal B to C, the “ballpark” holding area to departure gates at Terminal C, or to/from maintenance. This is a fairly common occurrence at EWR, where everything is run to the hilt, and delays tend to snowball into a debacle.
Totally United-controlled, totally unrelated to safety, and something that United would likely have to compensate for under a 261-style regulation in the US. I can see why he is against it!
Seems like he isn’t really addressing the issue, but using “safety” as an excuse to avoid paying people compensation.
I was literally eating breakfast sausage as I read this so I’ll make the quip that Kirby gave us an ugly overview how the sausage is made in corporate America.
Consider Boeing CEO Dennis Muilenburg who walked away with 62 million after 364 people died due to the transformation of Boeing from a cost-cutting company that put safety first to a defense-contractor style aviation firm that emphasized cost-cutting to increase stock price. I did the math and he could fill 364 body bags with 50 dollar bills.
NOBODY went to prison. Those deaths were simply allowed to happen, some money paid out, and that’s that.
If someone actually served some hard time, particularly CEO’s, for putting profits above safety or a direct hit to their bonuses, then they’d care. Bruce Schneier, a cybersecurity expert, observes: “Security Breaches Don’t Affect Stock Price”.
So the sausage is made this way: If there’s going to be someone whose going to pay for reporting safety issues, it will be the customers or maybe even the employees who will get punished for doing so, but NOT the CEOs and sometimes not even the shareholders.
Something should be done about that.
Interesting that yesterday was the anniversary of AA 191, in which the engine separated from the wing because of a time(money) saving procedure that damaged the connection points of the engine and wing.
Almost surprising he didn’t bring that up with a “it would be unfortunate if something like that happened again”
He has a PhD in bullshit. This guy is so egocentric and is absolutely out of touch with the real world.
“Certainly, when there is compensation offered it is in the form of miles or cash, not USD.”
Is cash not USD?
Credit. Future flight credit.
he always opens mouth and inserts foot..with shoe attached. That said, he’s not going to campaign for imposition of more regulations on him, no mater the reasonability. Jeffy predicted a near armageddon of cancelations when ‘tarmac delays”…sometimes known as hostage taking, fines were imposed. It didn’t happen. And Scott is not going to send out a plane with people aboard because the OCC has determined the expense of the mechanical delay might be excessive.
UAL may be running a better operation now, but that does not mean Frontier, Spirit and jetBlue are.
Set the standards where they should be, and penalize them when they don’t meet it.
Since United has just greatly devalued it’s MileagePlus program, any “compensation” offered in the form of miles needs to be adjusted upwards – a LOT – to compensate for the (now) extremely low value of a United mile. I think one can make a case that the program was devalued by a large percentage (most people haven’t realized the scale of the devaluation, and I’m not talking about how the prices for awards went up…there are much bigger, more significant devaluations that they imposed at the same time which nobody seems to have noticed…the price increase was relatively minor compared to the other damage they did to the program, but that has distracted everyone from the extend of the wider devaluation).
I’d say United miles are only worth a fraction of what they were 2 weeks ago, less than 25% of their previous real-world value. So if United is going to “compensate” passengers with miles, they need to quadruple the number of those miles.
Kirby is spewing so much garbage he should consider running for office. There are too many inaccuracies here to even address.
When I read Kirby’s statement that you described
as an odd turn-my visceral reaction was he was making a veiled threat tocompromise safety in lieu of having to compensate passengers for delays. Very troublesome comment.
Kirby doesn’t understand customer service. He has come from American Airlines where CEO compensation maximization is primary goal. We were delayed coming from Australia because of United’s operational issue and we were forced to miss our connection (all within United’s control), United dumped us to cattle class in a middle seat from a paid Business class even after I talked to the 1K desk, didn’t give any compensation even after writing to Customer support. I wrote to Kirby and am still waiting for a response. Hence, what is saying is pure BS. He is a big con artist. Don’t believe what he says.
And Republicans complain about why there is so much regulation in the United States…..a perfect example of why there needs to be more. Just like in Europe…..
The guy needs a dump truck to handle all the bull manure he’s shoveling. I’ve never thought very highly of Kirby but I gave him more credit than to try such a dimwitted argument as this. He’s effectively saying that the EU airlines are inherently unsafe because the passengers have rights. Or you could argue that he’s saying that his airline is so inept that they can’t manage to be safe and punctual. Either argument is ludicrous.
I take it as he’s just simply implying that tech ops are going to pressured into doing a rushed, shoddy job to keep the airline from having to pay compensation. I don’t even think he’s necessarily even saying the EU airlines are this way, just that United would be.
I think that’s an extremely generous read on what he’s saying since the Europeans have managed for many years without any notable sacrifice in safety, even by ULCC’s. If Ryanair can manage to fly safely with these constraints, surely the “Best airline in the world” – his words, not mine – can do the same.
EU261 will be twenty years old next year, there isn’t a shred of evidence that it has led to airlines flying whilst unsafe just to avoid paying compensation. Airlines may not like it and some such as BA with their regular IT collapses pay out a lot but the courts appear to always find in favour of the consumer since the law is seen as a consumer benefit.