Financial Repercussions of a Muslim Boycott Against United Airlines

by Imran Venjara, CPA


After the recent incident involving sister Tahera Ahmad and United Airlines, the statements that followed from our Islamic leadership here in the United States were both irrational and emotionally driven. Every time a purported Islamophobic incident has been perpetrated by a corporation or by one of its employees, our respected shuyookh have advised their 500k+ followers on various social media platforms to boycott. By stating their intention to withhold financial support, they influence thousands of individuals to create a mass call to boycott in order to impact profit margins to such an extent as to illicit a policy-change or some other form of restitution. Strictly speaking, this article examines the potential financial repercussions of an American Muslim boycott against United Airlines. It will not discuss any potential financial losses vis-à-vis reputational damage as such ramifications are not easily quantifiable. Please re- read the last sentence again to understand its intent.

“The article will not cover any potential financial losses vis-à-vis reputational damage as such ramifications are not easily quantifiable.”

Number of Muslims in America

The number of Muslims in the United States varies depending on which study you decide to believe. According to a study conducted by Pew Research Center in 2011, the number of Muslims in the U.S. was 2.75 million or 0.9% of the total U.S. population (3). I’ve clarified in the note section on why I chose this specific population figure over the highly cited 6–8 million.

“In 2011, the number of Muslims in the U.S. was 2.75 million or 0.9% of the total U.S. population”

Let’s delve further into the 2.75 million figure cited above. If we convert this figure to the number of American Muslim households, the number is 1,100,000 (a household is assumed to be a family of 2.5 persons) (1). It was reported in 2011, that 45% of U.S. Muslim households reported income of less than $30,000. To put that percentage into perspective, 495,000 Muslim households lived at or below the poverty line, i.e., $24,250 for a family of four in 2015. Thus, it is most probable that those 45% will not be purchasing a ticket on United or any other airline anytime in the near future.

United versus the Capable Muslim Consumer

Let’s study the Muslim households that make more than $30,000 per year. According to the U.S. Travel Association, the median household income for domestic leisure travelers in 2011 was $60,701.75 (2012 figures in 2011 dollars) (5). In 2011, Muslim households that made greater than $60,701.75 only amounted to 35% or 385,000 households (3).

Assuming an optimistic estimate, if each Muslim household bought 2.5 United tickets which average $350 during the most expensive travel months of March through June, the total revenue to United would amount to $336,875,000 or a little less than half a billion (2). In its 2011 annual report, United Airlines reported $37,110 billion in operating revenues (6). To understand this figure, United’s revenue from Muslim households (i.e. those making >$60,701.75) would make up only .9%. Again we are assuming those Muslim households capable of buying an airline ticket do so during the most expensive travel period.

“United’s revenue from Muslim households would make up only .9% of total revenue”

Since the calculated aforementioned figures are based on a hypothetical best case scenario, in actuality the real figures would be considerably lower since Muslim households would have varying periods of travel throughout the year if they have the means to travel at all.

United Versus the Muslim Business Traveler

According to the U.S. Travel Association, the median household income for business travelers in 2011 was $84,982.46 (2012 figures in 2011 dollars) (5). In 2011, Muslim households that made greater than $84,982.46 only amounted to 22% or 242,000.

Assuming an optimistic scenario, 242,000 Muslim households which contain only business travelers (highly unlikely) buy United Airline tickets during the most expensive travel months for $350 (coach). Total revenue to United Airlines would amount to $211,750,000 or a little less than a quarter billion. To understand this figure, United’s revenue from Muslim business travelers would make up only .6%.

“United’s revenue from Muslim business travelers would make up only .6%”

Business class and first class have been excluded from my analysis since average ticket prices have great variations.

Since the calculated aforementioned figures are based on a hypothetical best case scenario, in actuality the real figures would be considerably lower since Muslim business travelers would have varying periods of travel throughout the year.

Conclusion

If you follow the numbers, it clearly demonstrates that our ability to affect United Airlines financially as Muslim Americans is limited. My intention in writing this article was not to belittle or devalue the power of collective condemnation, but to illustrate as best as possible, the actual impact of a boycott from a strictly financial perspective.

What happened to Ms. Ahmad is reprehensible and those involved should be punished. However, implicitly calling for a boycott of an entire company for the actions of an individual is not the solution. Our community boycotting on its own will do very little; we need participation from allies outside the Muslim community in order to really make it hurt. Instead of starting ephemeral hashtags, our leadership should refocus on collaborating with each other and with non-Muslim enterprises to build initiatives that address Islamophobia at its core. The fact that no one stood up for Ms. Ahmad is direct evidence that the issue does not lie with the United Airlines corporation itself, but rather it is our failure as a community to address discrimination and Islamophobia on the micro level.


Notes:

I didn’t use the highly cited 6–8 million Muslim figure is because the studies backing those figures are not properly substantiated. Please refer to the following study by Pew Research Center:

http://www.pewforum.org/2011/01/27/the-future-of-the-global-muslim-population/

Also, I opted out of referencing the highly cited $170 billion U.S. Muslim disposable income figure as it relays on a total U.S. Muslim population of 6–8 million (The Muslim Consumer — Top 10 Key Findings). As reasons stated above, I’ve opted to use the Pew Research Center’s population figures.

Lastly, when calculating total Muslim household income / business traveler income against United’s total revenue figure, I was unable to remove ancillary fees (baggage, wifi, etc) or separate how much of its revenue derives from leisure travel / business. United Airlines doesn’t make that information public on its financials. Hence the margin of error is most probably 1–2% for both calculated figures.

References

  1. Census 2014. (n.d.). Retrieved from https://www.census.gov/prod/cen2010/briefs/c2010br-14.pdf.

2. Interesting Travel Data: Cheapest Times to Fly and Top Destinations From 2012. (n.d.). Retrieved from The Points Guy : http://thepointsguy.com/2013/04/interesting-travel-data-cheapest-times-to-fly-and-top-destinations-from-2012/

3. Muslim Americans: No Signs of Growth in Alienation or Support for Extremism. (n.d.). Retrieved from Pew Research Center: http://www.people-press.org/2011/08/30/section-1-a-demographic-portrait-of-muslim-americans/

4. The Muslim Consumer — Top 10 Key Findings. (n.d.). Retrieved from ADWEEK: http://www.adweek.com/news/advertising/muslim-consumer-top-10-key-findings-88765

5. Travel Facts and Statistics. (n.d.). Retrieved from U.S. Travel Association : https://www.ustravel.org/news/press-kit/travel-facts-and-statistics

6. United Continental Holdings Annual Report 2015. (n.d.). Retrieved from http://ir.unitedcontinentalholdings.com/phoenix.zhtml?c=83680&p=IROL-secToc&TOC=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9vdXRsaW5lLnhtbD9yZXBvPXRlbmsmaXBhZ2U9MTAwOTE2Mjkmc3Vic2lkPTU3&ListAll=1&sXBRL=1

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