Behavioral Sciences & Airline Travel
Oscar Munoz, the CEO of United Airlines, spoke at SHRM Conference a couple of days ago (the Society for Human Resources Management) and if I had been at the conference in Chicago to meet him, this is what I would have shared with him.
§ Behavioral science can improve your business – and the airline industry – a lot.
Behavioral Sciences informs us of the ways people act in decision-making situations. Much of the relevant research came from Prospect Theory, a foundational element of behavioral economics identified by Daniel Kahneman, PhD and Amos Tversky, PhD.
Prospect Theory speaks to two aspects of human behavior:
1. Losses loom larger than gains of equal value.
2. We evaluate losses and gains from a particular point that is influenced heavily by where we are at that moment.
The model for Prospect Theory begins where the lines intersect. That’s where we are.
The shape of the curve illustrates that losses are at least two times more meaningful than gains of equal value. In other words, losing $100 has more than twice the emotional impact as when gaining $100. Missing a flight is more emotionally painful than making a flight is pleasurable.
At every moment of the decision-making process, the passenger’s brain is squarely in the crosshairs of gains and losses. Every decision becomes a commitment to take the flight and it adds friction to act in ways that vary from our commitments.
Behavioral Commitments We Make to Fly
By the time a passenger boards the plane, she’s been through nearly a dozen decision points that confirmed she was doing what she wanted to do.
1. Decision to travel.
2. Decision on itinerary after evaluating alternative flight times and prices.
3. Decision to purchase itinerary (using the credit card to make the transaction).
4. Decision to start packing clothes for the trip in advance of the flight.
5. Making arrangements for transportation to the airport (or planning what time he might leave home in her own car or taxi).
6. Making plans that may involve arranging transportation in the arrival location, as well, possibly including family members or business associates.
7. Decision to check-in 24-hours in advance of the flight.
8. Decision to finalize packing.
9. Decision to check in at airline kiosk for boarding pass (if that was necessary).
10. Decision to stand in line to check bags (if that was necessary).
11. Stand in line to go through TSA security check. (No decision – just a commitment.)
12. Once in gate area and a request for volunteers was made, a decision to remain on the planned flight (declining offers to voluntarily change flights).
13. Stand in line to board in the appropriate section. (No decision – just a commitment.)
14. Decisions around getting settled: whether to place items in overhead or below seat, etc.
These micro-decisions or micro-commitments make it difficult for passengers to consider taking another flight after they’re in the gate area. They’ve already made many commitments to be there.
Alternatives & Timing
Timing makes a difference. If passengers had more time to change plans, they would do so with greater ease.
What if the email advising passengers to check in included this advisory: “There’s a 95% chance your flight will ask for volunteers. Please fill in the blank with a dollar value representing the smallest amount you’d take to give up your ticket and take another flight.” What if it were sent a week before or even 3 hours before the flight? That’s valuable information with timing passengers could act on.
This approach could allow people to have a newly informed reference point with enough time to prepare for alternatives. This is a lower-friction means of getting travelers to change plans.
Our brains like frictionless decisions. We like getting hints to difficult questions. We prefer being informed by our GPS app that the I-405 will take 20 minutes longer than using the I-110 before we get on the I-405.
A little bit of communication can go a long way, when it arrives in a timely manner. The improved timing of messages could allow passengers to rearrange their views of gains and losses and do it in a way that reduce the amount of stress on those decisions.