JetBlue Founder Backs Overbooking After United Flight Fiasco

  • No-shows make it necessary to sell extra tickets on flights
  • United plans to review polices and procedures by April 30

Overbooking is a necessity for the airline industry, according to Azul SA Chief Executive Officer and JetBlue Airways Corp. founder David Neeleman.

United Continental Holdings Inc. is struggling to contain the spiraling fallout over a passenger’s forcible removal from a flight, recordings of which have spread across social media around the world, sparking outrage. They showed officers pulling a passenger from a flight Sunday evening after he refused to give up his seat and then dragging him down the aisle as travelers yelled at them to stop.

“There are a lot of no-shows,” Neeleman said at the New York Stock Exchange, shortly after Azul went public. Shares closed up 7.2 percent from their offering price in U.S. trading. “What would hurt the airlines big time is if someone in Congress saw this and wanted to basically make it against the law to overbook flights," Neeleman added.

Neeleman’s concern isn’t far-fetched. United’s now widely public fiasco has prompted New Jersey Governor Chris Christie and a Democratic Senator from Connecticut to urge the U.S. Department of Transportation to take appropriate action against the practice of overbooking. "The practice has become unconscionable by United and is abusing passengers coming through Newark Airport and around the nation without cause," Christie wrote in his letter addressed to Transportation Secretary Elaine Chao.

United Chief Executive Officer Oscar Munoz on Tuesday offered his “deepest apologies for what happened” and said the airline would conduct a review of its procedures and policies to be completed by April 30.

Neeleman suggested giving more power to staff at the gates to offer higher compensation to people who volunteer to give up their seats. JetBlue, which Neeleman is no longer a part of, doesn’t overbook passengers.

— With assistance by Michael Sasso, Justin Bachman, and Linly Lin

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