Abusing the BATNA

About a month ago, I started maintaining a few "rules of life." These are rules and guidelines that I hope I can live my life by at all times, regardless of emotional context. I spend 5 minutes reviewing these rules every week. I store them in Evernote using a "Rules of Life" tag, and I asked Google Calendar to remind me to re-read them every week until I die. Rules can only be added to this list if they're accompanied by a  story or article that substantiate the rules. I don't re-read all the stories every week, but I always reflect back on each story as I re-read the rules.

The first set of rules I added to my collection were 5 key negotiating tips. I know there are many more than this, but this is a good starting set.

1. Know your best alternative to a negotiated agreement (BATNA) going in

2. Not all agreements are purely win-lose. Expand the pie along new dimensions.

3. Add-ons are key. After the primary point of contention has been agreed upon, add in small bonuses; the other party is more open to others once the primary point is agreed upon.

4. Bargain with empathy. People respond to empathy.

5. Wait. Patience is key.

Today, I witnessed the most horrific, destructive and somehow completely legal abuse of the first rule.

My colleagues, Tom, TJ, Brian, and I just spent the past few days in Cleveland doing all day on-site sales presentations and demonstrations for a few long term acute care hospitals in the Cleveland area. Just a few days before the Cleveland trip was set to begin, Brian scored another on-site demo in Pittsburg. Brian and TJ had to buy new tickets to fly first to Pittsburg, then to Cleveland. Their original round trip tickets from Austin to Cleveland and back weren't refundable, so we figured VersaSuite would eat the cost of Brian and TJ's original voyage to Cleveland, and utilize the original tickets on the way back home.

This morning, we got to the Cleveland airport about an hour before our flight was scheduled to take off. We weren't late, but we weren't early either. Tom and I checked in and got our boarding passes as usual (Brian had flown out on an earlier flight). TJ didn't. The automatic flight locator wasn't finding TJ's ticket. So he started talking with the American Airlines representative at the check in desk. He couldn't find TJ's ticket either. At this point, everyone was thoroughly confused. TJ pulled out his phone and showed the AA representative his ticket purchase confirmation in his email. It was quite clear that TJ's ticket had been purchased.

What? That makes no sense.

Well, it turns out AA cancelled TJ's ticket. Without telling him or notifying him in any way.

What? That makes no sense. Why would they do that? Don't they have a reputation to maintain?

Apparently, AA has a policy that if you miss your outbound flight, they automatically cancel your return flight without issuing a refund or notifying you so that they can try to sell your seat to someone else. That policy is almost sound, except for the part where they should reach out to you to confirm that you want to cancel your return flight. Although their logic works 99% of the time, there are always exceptions, especially in the travel business where plans can change with just a moment's notice.

You'd think that in this case, AA would just re-issue TJ his original ticket. The flight wasn't sold out, and AA had already collected its deserved revenue for selling that ticket. Re-issuing a free ticket would be the sensible thing to do.

It turns out that AA just doesn't do this. The AA check in representative found TJ's scheduled flight back to Austin and the associated "Cancelled" status, but he couldn't do anything to un-cancel it, even though there were still open seats available on the flight.

25 minutes of arguing and confusion later and with an enormous line of pissed off people piling up behind us, AA forced us to re-purchase the ticket, and they charged $550 for a one-way trip from Cleveland to Austin. The original round trip was about $400 total. To make matters even more offensive, AA re-sold TJ the same seat he had purchased before. He literally paid twice for the exact same seat on the plane.

That is theft. And a horrific abuse of the first rule of negotiation - they knew that TJ didn't have a choice, and they abused that fact as much as they could. They messed up, and they forced TJ's employer pay for it.

I'd like to conclude this post with an Ode to American Airlines:

American Airlines, o AA. How prestigious you used to be. You pioneered the airline industry. You helped create billions of dollars of economic value by allowing people to travel an order of magnitude faster than they could before.

But something happened. While your competitors stayed lean, innovated, and explored new business models, you indulged, stagnated, and built a massive, poorly organized, and ultimately unmanageable empire. And perhaps worst of all, you got incredibly lucky.

Fuck you.

You are just over 80 years old, and you are the only living corporate entity in the history of capitalism to undergo chapter 11-style bankruptcy 7 times. You have gone bankrupt once a decade every decade since your inception. You devolved from an value-generating innovator to a giant, flaming, value-destroying piece of shit.

Every time you go into bankruptcy, you abuse your stakeholders' known BATNA, just like you did you did to TJ today. You use bankruptcy protection to force your stakeholders to forgo their profits and their livelihood. You don't figure out how to run a profitable business despite the fact that all of your competitors have, and you simply abuse the broken legal system to avoid repaying your debts. So you exit bankruptcy court a few years later with a new lease on a life.

You look out on the world as a leaner, more capable entity. You underwent liposuction to cut all the fat, but never killed your old habits or developed new ones. After surgery, you still eat McDonalds and candy bars every day. And after 8 more years of gluttony, you realize that, once again, you're too fat to walk. Maybe you should just fall over and roll your fat ass all over the world instead. After all, you know better than anyone else that walking is for suckers, right?