The 6th Floor: Nate Silver, Guest Ethicist

Not long ago, the magazine published an article about how to avoid paying full price for air travel . Several readers wrote in to say the proposed method amounted to lying, and asked what I thought about the ethics of such an approach.

I write the magazine’s Ethicist column , but Nate Silver wrote the article that ruffled so many readers’ feathers, so I put the question directly to him.

Is it unethical to deceive an airline? Do passengers have an obligation to use their tickets in the way  they were intended to? Or is all fair when it comes to price wars?

Here is his response:

Let me start by saying that I’ve never actually taken advantage of this “trick” myself. It’s rarely worth the headache when you’re flying out of New York, which is served by all the major carriers as well as by JetBlue, Virgin America and Southwest. If a passenger can’t find a decent airfare in New York — without bending the airlines’ rules — he’s usually not looking hard enough.

Other cities, however, offer the passenger much less choice. And this, I think, is where the ethical debate turns.

There is unambiguous evidence — both from my my own studies on this topic and from those conducted by academics and industry experts — that airlines charge passengers a significant premium when they dominate a route or an airport. When another airline like Southwest begins to fly a route that they hadn’t flown before, fares on all carriers drop significantly. Of course, this is all perfectly in line with economic theory.

These “hidden-city” ticketing opportunities arise, with few exceptions, because the airline is charging the passenger a premium to fly a route over which they exercise monopoly power.  By booking a ticket into a more competitive market instead — but one which happens to have a layover in the hub city — the passenger can substitute a competitive fare for a noncompetitive one.

When a consumer is disadvantaged by monopoly pricing, I think there ought to be a strong presumption — legally and morally — that he or she is entitled to recourse.  In theory, a citizen might have some alternative means of recourse in that he could choose to vote for elected officials who would pledge to ensure that the free market is functioning properly. There’s no doubt that much progress has been made in this area since the airline deregulation efforts of the 1970s and 1980s; the rise in airfares has been slow relative to the rate of inflation. At the same time, the major carriers have a lot of lobbying power, and they receive taxpayer subsidies of various kinds. And questions about which airlines fly which routes often turn on decisions made by local airport authorities, who are rarely elected to their positions.

Airline Ethics | rami Mag

Airline Ethics

Introduction

Ethics are essential in the Airline industry because they are the framework that guides individuals in the process of making business decisions. They usually encompass three features i.e. an application of one’s professional skills, incorporation of one’s personal values and lastly, good judgment. Codes of ethics are formal declarations of the moral values that guide various companies. Therefore, in the field of ethics, one can analyze an industry such as an Airline industry through its practical implementations and also through its formal declarations.

Ethical guidelines

Conflict of interest as part of ethical guidelines/code of conduct

Almost all Airline companies have formal declarations of their codes of ethics. Usually, this can be categorized under a series of topics such as conflict of interest, asset protection and working together. Conflict of interest refers to those scenarios where employees or company representatives have to decide between their interests to their employer or their personal/investment/ relationship obligations. Usually, most Airline companies have highlighted some of the issues that can be labeled conflict of interests in their ethics code of conduct. (Frontier airlines, 2004)

For instance, conflict of interest comes about when Airline personnel receive gifts or rewards from suppliers/ consumers/ stakeholders for doing their job. Usually, most Airlines prohibit gifts especially when those gifts seem excessive. The reason behind this is that when a client gives an attendant an expensive piece of jewelry for receiving very good customer service, that attendant may be obliged to meet the consumer’s demands the next time the client reports even when those demands are not procedural. This is because by accepting lavish gifts, one puts himself/herself in a position where they feel obligated to meet the gift giver’s needs and this eventually compromises their moral obligations.

Conflict of interest may also occur when a member of staff finds that they have to work extremely hard with certain clients and they request those suppliers/clients for rewards for their services. This is a conflict of interest because an employee finds that they have to choose between maintaining a good name for their Airline or meeting their personal financial interests. Consequently, it becomes necessary for Airlines to clarify that this is a wrong thing.

Encyclopedia of business ethics and society

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