Airlines Bumping Far Fewer Passengers From Flights
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With your money briefing, I'm J.R. Whelan at The Wall Street Journal in New York. Getting to the airport on time to make your flight is stressful enough, but the possibility of being bumped off a flight can drive somebody up a wall. We'll explain in a moment how airlines are drastically reducing the number of passengers they bump from flights. First, these money in market stories you should know. In its latest economic report, known as the Beige Book, the government says that rising interest rates appear to be putting the brakes on the housing market and other sectors of the economy. The average interest rate on a 30-year fixed rate mortgage in October was 4.83 percent. That's up from 4.03 percent in January.
The Federal Reserve found that new home construction and existing home sales tended to decline or hold steady in recent weeks. Also, the strengthening employment picture appeared to be adding to business uncertainty as well, as employers found it increasingly difficult to find and retain qualified talent. Business contacts in many of the Fed's districts around the country said the labor market had tightened further in a broad range of fields. The Chicago Fed district, for one, reported a number of businesses had been ghosted. That's a situation in which a worker stops coming to work without notice and then is impossible to contact. And to many people, Florida sounds like a good place to visit in the cold days of December.
How common is passenger bumping today compared to 2017?
For a lot of others, Florida is a good enough place to pick up and move there altogether. A new report from LendingTree says that of all the mortgage requests made by out-of-state movers in 2018, the top destination was Florida, and South Carolina was a close second. LendingTree also says that Texas had the highest percentage of residents, about 93%, looking to move within state lines. By contrast, Alaska had the lowest percentage of residents looking to stay in state, at 75%. The top destination out of Alaska was Washington State.
Remember that incident back in 2017 when a passenger was dragged off a United Airlines plane after he was bumped to make room for airline employees? Well, that incident has resulted in airlines bumping a lot fewer passengers, and Wall Street Journal middle seat columnist Scott McCartney is on the line with us to explain. So, Scott, bumping passengers used to be fairly common. Now, by comparison, it's much more rare.
Yeah, it really is. We looked at the numbers for the first nine months of the year so far, and overall for the industry, involuntary denied boarding, which we more commonly call bumping, was down 69%. Some airlines, large numbers. Last year, the same period of time, Southwest bumped 11,000 people involuntarily. This year, only 2,000. American dropped from 7,000 to only 1,000. So, across the board, there's been a lot of change in how airlines approach this.
And some airlines have gotten good at running the numbers to nearly eliminate altogether the possibility of bumping passengers.
Yeah, they're really the best at it now are Delta and United. Delta, for example, they had already started before last year at really curbing this practice. They bumped only 912 people last year. But in the first nine months of this year, only 22 people. I mean, it's about as close to zero as you can get these days. United had had similar results down 97 percent. They only bumped 70 people in the first nine months of the year. They actually had two months where they carried 30 million people and only bumped six of them.
Oh, wow. And, you know, people see this as being very frustrating and sort of, you know, some might say evil on the part of the airlines to bump passengers, but they're doing it to account for the possibility of no-shows or cancellations. And that's a business decision.
Well, it is a business decision. I do think there's an inherent unfairness to it. When you buy a ticket, particularly a non-refundable ticket, you're entering into a contract with the airline. They're essentially selling you a seat on the airplane.
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