Why should a company be allowed to sell the same product of value to 2 people?
While it's convenient to think of what airlines sell as a product, the fact is that they don't sell a product; they sell a service -- transportation. "Seats" serve as a surrogate for what they sell, and in the vast majority of instances its perfectly fine to consider what airlines sell as a product. As goes overbooking, its challenges and the possible ways to overcome them present one instance in which the distinction between products and services becomes manifest.
Let them settle these things before boarding.
Failing to discover and resolve the service availability conflict before boarding started is the mistake that United made.
I'm not following that story closely, but I seem to recall that the other individual needing to fly on the plane was a United employee. I would not be surprised to find that the employee was essential for the operation of another flight somewhere, for that would explain why United was willing to give up the revenue associated with the man who was removed from the plane. I'm just speculating in that regard; it could be something else that motivated the airline to forgo the man's fare.
While I agree that overbooking is a terrible practice, realize that if it were to go away, so would refundable fares and change fees will skyrocket.
??? What? Are you aware that airlines, economically speaking, among businesses that routinely sell a fundamentally -- and economically speaking -- commoditized "product" at well advertised prices, the closest thing to a perfect monopolist?
Put another way for those who aren't economics savvy [1], airlines are among the most effective/efficient profit maximizers in the realm of perfect and monopolistic competitors because they can and do sell their service -- transportation from point A to B -- at such a wide range of prices. What that means is that they are able to collect revenue from (sell tickets at prices acceptable to) the guy who is only willing to pay $100 for it and from the guy who'll pay thousands for the very same service. That is how a perfect monopolist maximizes revenue. [2]
(Yes, though there are not a lot of folks who can buy the $100 -- or less -- ticket, and though there are only a few folks who willfully pay full fare for their tickets, there are people in both groups on every flight.)
Refundable fares are not going anywhere. Within a given class of service, refundable fares (Y-class, A-class, B-Class, etc.) are the highest sums one can pay for a plane ticket. What on Earth makes you think airlines will dispense with them?
Note:
- Click here to see the "math" that makes that so. Careful analysis of that math will make it clear why, in practice, profit maximizing perfect monopolists will sell their "goods" at a wide range of prices. Common sense, even if one doesn't care to "get" the "math" of economics, tells one that among the several market exchage structures, the unfettered monopolist is able to earn the greatest profitability. Awareness of that fact is why so many businesses operate, to as great a degree as they can, as monopolistic competitors rather than as perfect competitors. What makes that possible? Branding.
- In the U.S. one doesn't get to actually observe the price maximizing behavior of perfect monopolists because (1) for industries/"products" that aren't most efficiently delivered under the model of natural monopoly, monopolies are not permitted to exist, and (2) where a natural monopoly is allowed to exist, it's regulated so as to prevent the supplier from acting as a profit maximizing perfect monopolist.