The other issue is to stop overbooking every single flight and allow some slack to handle these unexpected situations that inevitably come up.
It's a pretty low cost to customers (I've never met anyone who was unhappy that they got bumped, because the kind of people who don't want to get bumped don't opt-in) and it actually delivers returns in the form of lower ticket prices, since if they were underutilizing the space in the planes, it would be more costly to operate.
It seems to me that the problem with this situation was not overbooking, it was that for whatever reason they did not use the generally well-received bidding system to allow the people who were going to be bumped to select themselves. On a full plane, what are the chances that you can't find 4 people willing to give up their seats for $1000 (or even less)?
And great point about how it is more efficient this way. Reminds me of surge pricing, or congestion pricing. Economics ftw.
That's not every flight. Small enough that its too small for anecdotal evidence to be useful, big enough that it causes media stories. Every airline has some degree of overbooking necessary because flights get delayed, connecting flights lose passengers, and sometimes people just simply don't show up.
Especially in large airports (ie: Chicago's) where the airport is basically a hub for other airports to go to.
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United Airlines is solidly average on overbooking: https://www.transportation.gov/sites/dot.gov/files/docs/reso...
At 0.4 passengers per 10,000 bumped, United Airlines is actually a lot better than Jetblue or Southwest.
See page 33.
This is naturally going to create a systemic problem when there's too many overbooked flights. If you have to bump some passengers from flight 1, then they try to get on flight 2, but flight 2 is ALSO overbooked, so now you have to bump or pay off even more passengers from flight 2 and put them on flight 3, which is ALSO overbooked and so on. You end up with a cascading snowball of bumped passengers.
Inevitably you run into a situation where nobody wants to volunteer, then you get a situation like the one in the news. It's not a coincidence that happened on United.
In any case, United is not the worst offender in either voluntary nor involuntary "bumps".
I don't think it's wrong per se, in a moral sense. I just think it creates problems. The more overbooked flights you have, the less able you are to respond to delays or to re-seat passengers who got bumped, or to find new flights for people whose plane suddenly got smaller or who missed a connection or whatever, and there are ALWAYS going to be things like that happening.
The passengers who get bumped don't usually just give up altogether. They have to get on some flight. The more overbooked flights there are, the fewer chances there are for them to get on a different flight, and the more people there are looking for different flights in the first place. The problem compounds and you get the cascading spiral like I described above.
A constrained system like the airline is going to respond nonlinearly to perturbations. When you double the number of overbooked flights, the problems they cause aren't just going to get twice as bad, they'll get four times or six times as bad or more. (made up numbers, I'm just saying it's not one-to-one).
Flying is already a stressful experience thanks to the TSA and just the general stress of making sure you get there on time with all the uncertainty in what can go wrong (traffic, long security line, long wait to check a bag, whatever). If I book a flight at a certain time, it's because I want to leave and arrive at the times I chose, not a couple hours later or the next day or two days later, or never. This is why I pretty much refuse to fly United anymore. I don't like the stress of having to wonder if I'm going to be allowed on the flight I've paid for.
https://www.youtube.com/watch?v=EqWksuyry5w does a great 5 min overview talking about this exact thing.
JetBlue overbooks 3x more than United does. See page 33.
The problem here was not detecting that the flight was _now_ overbooked after reducing the available seats.
Unfortunately it is the greed and stupidity of us consumers that drove this market into the ground. We shouldn't blame airlines. Think about this next time when you pick 'order by price' in skyscanner...
It won't lead to an airline bankruptcy.How about we create a cancellation fee. UA can add an incentive (not sure if one already exist) to their mileage club membership giving club member free cancellation up to 5 hours before the onboard time.
* Free cancellation up to 24 hours, and thereafter no refund plus a $30 cancellation fee.
* 50% refund for up to 24 hours
* no refund if no show
* club members get up to free cancellation and 50% refund up to 5 hours, except
* ultra gold club members free cancellation and 80% refund without cancellation fee
IDK. Someone on their business team make up a profitable number.
The truth is though, airline does this because they have a proven statistics the percentage of customers are no-show. According to [1]:
> On average, the number of people not turning up to flights is around 5 percent, but, in certain circumstances, that number can be up to 15 percent. Obviously, that puts airlines in an interesting position.
In the long run as airlines struggle to keep up with profit if overbooking is illegal, airlines will be forced to implement the above. [1]: https://techcrunch.com/2017/04/11/overbooking/
I have done this before because buying a new ticket cost me less than moving the existing ticket. So I just didn't check in, and didn't turn up for the flight.
Well, aircraft are really, really expensive. On the order of hundreds of millions of dollars apiece just to buy. Then there's the yearly maintenance which involves tearing them apart and putting them back together. And the jet fuel, airport landing fees, highly trained personnel, regulations...
This means their operation costs eat up somewhere around 80-90% of the revenue for any single full flight. I can't imagine personally trying to manage such a system and eeking profit out of it.
One of the big reasons airlines even survive while serving so many otherwise unprofitable locations is because of the federal grants, and the regulations that ensure they do serve more than just the biggest metropolitan areas.
In other words, if unregulated and not provided with grants, airlines would only ever serve the major cities (with higher ticket prices as they do so), because it would never be profitable to serve anywhere else. They would also completely fold after the first downturn in air travel (9/11 would have effectively killed all the airlines).
(A few years before, airlines generally were barely eking it out, but that was in a time of high oil prices. The recent collapse in the price of fuel has been very, very good to them.)
Cite: http://money.cnn.com/2016/05/03/news/companies/airline-profi...
That said, it's very hard for one airline to avoid the race to the bottom unless they spread that across the company's processes. AKA, we don't double book, we don't have ridiculous fees etc, your ticket costs X% more, but and they capture a different market segment.
Too late for that now. Get ready for more harsh treatment in the future and lots of increases in fare prices, higher than inflation.
Some people believe this may have already occurred.
And before we call air travel expensive let's look at what it actually is. We've only been flying at all for about a century (much less of that time commercially) and it's already safer than driving to the airport. You can get from San Francisco to LA for less than $100 in an hour. Across the country (NYC to LA) for less than $400 in the amount of time it takes you to watch two movies and eat a meal. This is with something approaching $300-350k worth of annual payroll in the cockpit, flying a machine where the engines have to be literally broken down into their component pieces and rebuilt on a regular schedule. The overhead is obscene, the skills required to do the job are expensive, and they'll move you and a friend from one end of the country to the other for less than most people here would spend on a laptop.
The fact that a $20 difference in fare will make you choose one airline over the other is what drives all airlines to this point.