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This response feels knee jerk. It's been demonstrated in countless other threads (1) and articles (2) how economically important it is to overbook. Overbookin

• diogenescynic 10y ago
  >how economically important it is to overbook. I still don't believe this claim. A 727 seats 129, a 787 seats 290, and a 747 seats 366. That means it only makes flights slightly less expensive. I only travel a few times a year and I'd rather pay 2% more than get bumped off my flight. Why do we allow airlines to overbook but not movie theaters or other industries? This seems like an artificial advantage we've given them and it doesn't seem beneficial at all to the average consumer.
  • ldiracdelta 10y ago
    If theaters had an escalating buyback price for their tickets, I could be persuaded to, say, not see the next Star Wars movie for $100 and then see it later. I have a price. Most people do.
  • lucasmullens 10y ago
    Paying 2% more and getting bumped off your flight is a false dichotomy. United's approach of offering $10k avoids both. I don't see a reason to waste seats if it can be avoided without hurting consumers. Wasting seats is inefficient economically and bad for the environment.
  • linkregister 10y ago
    I've seen movie theaters overbook too. I think you might be surprised about how many industries overbook. I think it's the worst when hotels overbook. Typically the replacement hotel is less nice and has a bad location.
  • megablast 10y ago
    There were years where airlines were only making around $200 per flight. Not per person, PER FLIGHT.
  • kristianp 10y ago
    I think you're missing the fact that a percentage of people don't turn up for their flights, so on most overbooked flights, the airline doesn't have to buy back tickets at all.
  • hueving 10y ago
    Almost nobody gets bumped involuntarily on competent airlines. They just increase the bid until someone has a hell of a great day by clearing first class round trip tickets across the globe for volunteering to spend the night.
  • dionidium 10y ago
    This isn't your point, but, in case anyone's wondering, Southwest doesn't fly any of those planes. An interesting thing about their operation is that they exclusively fly Boeing 737 aircraft. https://en.wikipedia.org/wiki/Southwest_Airlines#Fleet https://en.wikipedia.org/wiki/Southwest_Airlines#Fleet
• maccard 10y ago
  The main budget airline in Europe (Ryanair) doesn't overbook flights, and as far as I am aware never has done. They managed a net profit of 1.4 billion dollars last year.
  • gizmo385 10y ago
    If I remember correctly, neither does JetBlue?
    • sushid 10y ago
      Edit: technically true but this fact is misleading. JetBlue's rate of passengers denied boarding is actually almost 3 times higher than United. [0] [0] https://www.transportation.gov/sites/dot.gov/files/docs/resources/individuals/aviation-consumer-protection/2017MarchATCR.pdf https://www.transportation.gov/sites/dot.gov/files/docs/reso... Oct - Dec 2016 Passengers Denied Boarding by U.S. Airlines. United's Denied Boarding is 0.40 per 10k passengers vs JetBlue DB of 1.19 per 10k passengers.
      • rdl 10y ago
        JetBlue doesn't overbook, but they do swap A320 for A321 which have 50 fewer seats, fairly randomly, which leads to a lot of IDBs (you can ask for volunteers and get them when it's 1-5 people on a 200 person flight; you are probably screwed if you need 50 people on a 250 person flight.)
      • deleted 10y ago
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  • toyg 10y ago
    Yep, the main difference in Ryanair's model is that basically all tickets are nonrefundable. This way, even if the plane leaves half-empty on the day despite being fully booked, it will have paid for itself - which is what should happen, really. What you lose by renouncing overbooking is the ability to change your ticket without paying for it again (which is what happen with Ryanair - fees to alter bookings are so huge, it's cheaper to just buy a new ticket).
• zdean 10y ago
  I think if there's any airline that I'd give the benefit of the doubt for making a change like this, it would be SW. I can't imagine that a conversation around this issue ONLY came up for them after the (most recent) United fiasco.
• DoofusOfDeath 10y ago
  > Overbooking is central to airline profitability and their ability to provide flexibility - like partial refunds, or SW's "open tickets" policy on business select. Are you sure of that? I would think that airline profitability is largely dictated by competitive forces, rather than the particulars of in which practices the overall industry is permitted to engage. (Note that I'm assuming a world where all airlines, or no airlines, overbook. If only some of them overbook, then I agree the practice could affect relative profitability of those who do / don't overbook.)
  • jrockway 10y ago
    You're right that it's not intrinsically essential. To an airline, a flight that leaves with an empty seat is basically throwing money away; that empty seat doesn't mean you can take less fuel, fewer flight crew members, or wear out the airplane less. Therefore, the empty seat saves the airline no money. Furthermore, people often miss their flights. Overbooking is one way to deal with these two assumptions. Assume a certain number of people will miss the flight, and sell some seats twice. Then you don't fly with money-eating empty seats, and you can lower the ticket price a bit, because you don't have to charge customers the cost of those statistically-likely empty seats. There are other solutions. Don't offer any refunds or reaccommodation to no-shows. The seat was empty, but someone paid for it, so who cares? But customers probably don't like that. The might even like it less than overbooking. I don't know, I don't run an airline. There are options, but overbooking exists for a reason.
    • ewanm89 10y ago
      Well, there is more fuel left in the tank, so there is less on the refill so yes it does save fuel, not much but it does save some. I prefer no refunds for no-show policy myself, that is how it works when I buy a ticket to see a play. Now refundable upto 48 hours before the flight might be even fairer.
      • knz 10y ago
        > I prefer no refunds for no-show policy myself, that is how it works when I buy a ticket to see a play. What about if you are flying long haul and linking up to a domestic flight on another airline? "Oh, we can't help you because your previous flight was delayed due to weather/mechanical/congestion.you should have flown on one carrier even if the price was 2x"? Airport congestion is a big issue in the US, as is weather related delays.
• dragonwriter 10y ago
  > This response feels knee jerk. The article pretty clearly suggests this policy was under consideration anyway, though the United incident at least seems to have affected the timing, and might have made it easier to pull the trigger. > Overbooking is central to airline profitability Flying full is certainly beneficial to profitability, and overbooking makes that more likely. But it's not without costs, and it's quite possible that the cost/benefit has changed since the policy became a norm.
• loeg 10y ago
  Why cap at $10,000? There needn't be any cap.
  • pdelbarba 10y ago
    If it gets really high, I imagine passengers would do their best to drive it up. Would you volunteer if the offer was $2k out of a $100k vs a $10k pool? It defies classic game theory to an extent, but humans like to roll the dice.
    • rlanday 10y ago
      You're going to collude with ~100 random strangers to prevent anyone else from taking the offer until it gets to the level you want it to get to, and then agree to split it somehow? Ha ha ha.
      • dawnerd 10y ago
        Last year when I was flying back from LIH this happened but on a very small scale. These two guys both were joking about just driving the price up and so they did, all the way to the max Guy got a free hotel stay and food as well since there was only one flight per day to LAX.
      • SilasX 10y ago
        At a high enough price, you encourage exactly those conspiracies.
        • landryraccoon 10y ago
          I'd defect. The first person to defect wins the entire pool. It's not like any agreement among the passengers would be enforceable.
        • loeg 10y ago
          That isn't how game theory works. Colluding with 100 people becomes harder the reward for defection grows higher.
• beamatronic 10y ago
  Is it possible to sell an overbook and a non-overbook class of tickets separately, and clearly delineate that to the customer as such?
  • s73ver 10y ago
    That's usually called "standby"
  • briandear 10y ago
    If you buy a higher fare class you won't get bumped -- or extremely rarely. I fly 60,000 miles per year and I have never been bumped. But I also don't buy bulk-fare consolidator tickets from travelocity-type sellers either. Involuntary bumps are extremely rare statistically anyway.
    • deleted 10y ago
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  • bilboa 10y ago
    Yes, that's what "standby" tickets basically are. Some airlines would (not sure it's still a thing) sell you a "standby" ticket for cheaper than a normal ticket, which meant you show up and wait at the gate until near departure time, and then if there are any seats available they let you on the plane. If not you have to wait for the next flight.
    • SilasX 10y ago
      Yeah, but the problem is that most tickets are now, in effect, standby, but not labeled as such. Hence why the parent suggested making the status (and the option to upgrade) clearer and more readily available.
      • dawnerd 10y ago
        On Delta the Basic Economy (E) basically are standby since you can't select your seat and are only assigned one at check in (or at gate? can't remember). It's not even that much cheaper than regular main cabin.
• robbiep 10y ago
  The only time I experience overbooking is when travelling in the US. I have never had someone come on a flight, or announce at the gate, that people must give up their seat and offer compo (something I have experienced on probably 20-30% of my domestic US flights).
  • dagw 10y ago
    I've had it happen several times flying out of London.
• milquetoastaf 10y ago
  Yep you're right, everyone employed by Southwest to research and implement this apparently crucial detail of airline travel has no idea what they are doing and totally fucked up. I honestly think hacker news should implement a feature where your comment is read back to you slowly before you post. Or you have to retype it out twice. Something, anything, to give the blowhards on here pause before they bless us with their cited[0] wisdom.
  • sotojuan 10y ago
    What? Being a computer nerd doesn't mean I know everything about everything?!
• deleted 10y ago
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• lend000 10y ago
  While I generally agree -- Southwest is more of a budget airline, so it may not be subject to the same magnitude of loss from people missing/skipping their flights. I could see the United demographic having far more no-shows. For those who aren't aware, airlines overbook because there are, on average, a significant number of people who miss or skip their flights. It's wasteful (and bad business) to leave those seats empty when instead, you can overbook and have an extremely low percentage of flights end up without enough seats. Edit: as others mentioned, overbooking also allows airlines to be more flexible with refunds.
• corford 10y ago
  Overbooking is a technique used by legacy airlines. Pure LCCs don't use it (certainly in Europe) because their tickets are non-refundable other than from EC261 claims and they don't have inter-lining or partnerships with other carriers. I'm surprised Southwest were overbooking in the first place given they're a budget airline... Edit: An exception may be Easyjet (though I've never seen it happen and I fly them a lot). They offer flex tickets mainly aimed at business flyers which would make it worthwhile for them to do some limited overbooking.
  • amorphid 10y ago
    Southwest flights aren't that cheap unless you book in advance. And they used to (still might?) have a very flexible refund policy. You could not show up for a flight, never call, and still get a full credit for the value of your ticket to any other Southwest flight in the next 12 months w/ no penalty. I really like Southwest.
    • corford 10y ago
      I've never used them and admittedly don't know much about their model (the only time I fly US carriers is when I'm crossing the pond from Europe).
    • pauldino 10y ago
      They've restricted it slightly: now you have to notify them at least 10 minutes before the flight. But still no penalties - I really hope they don't have to do away with that policy since that's the main thing I like about Southwest.
      • amorphid 10y ago
        That's still flexible enough for my needs. Thanks for the info.
      • Cyph0n 10y ago
        That's still better than most other airlines. I'll definitely be considering SW from now on. I'm assuming they only do domestic flights?
• SilasX 10y ago
  I understand the benefits of overbooking and I think it's an overreaction to stop it entirely. But, couldn't they make the tradeoff more explicit and transparent for the customer? "This ticket allows you to be bumped, for which you will be paid $X. You can pay $Y more to make it a permanent you-own-this-slot-we're-not-f'ing-around reservation." None of this, "oh, you didn't read and memorize the minutiae of overbooking policies and have to figure everything out minutes before the flight you thought you were going to be on!"
  • briandear 10y ago
    It already IS transparent. Every single ticket counter generally has some form of overbooking notice. -- at lesst they did when I flew through DFW a few weeks ago. I don't think anyone reading this is unaware of overbooking. It isn't some mysterious secret clause on a TOS page somewhere.
• cnnsucks 10y ago
  The first claim in your first link... exactly what I expected to find: "By overbooking it actually does help keep the fares down" Money. Low low prices. That's why people that have paid for tickets are getting beat up and kicked off planes. In all sorts of other aspects of our world we're expected to gladly accept higher costs as the price of our "values." Higher energy costs, mandates for various types of insurance, taxes to fund one agenda or another and on and on. Perhaps you haven't considered this yet but delivering the seat that a paying customer has paid for and not subjecting any of these otherwise compliant paying customers to the possibility of being thrown off a plane --- by martial force if necessary --- is a "value" we might aspire to. And if that means maybe you are a little more careful about just how often you bop across the continent in a 600 mph jet because the cost is a little higher, or you can't play ticket games with as much abandon as you're used to well... perhaps that isn't really the end of the world.
• gshulegaard 10y ago
  Overbooking is key for maximizing producer surplus. Whether or not that is economically advantageous to the economy as a whole is a different and more complex question. But the notion that a company maximizing it's surplus is _always_ beneficial to consumers is tricky but more likely false within the confines of my limited understanding of contemporary economic theory.
  • jessriedel 10y ago
    Why do you think the consumer doesn't capture any of the surplus?
    • gshulegaard 10y ago
      There is a difference between Surplus and Utility. I think there is a case to be made that this practice increases Consumer Utility and trades it somewhat for Producer Surplus...but generally speaking, Price Discrimination increases Producer Surplus (thereby reducing Consumer Surplus). I gave a more detailed response to cameldrv.
      • jessriedel 10y ago
        > Price Discrimination increases Producer Surplus (thereby reducing Consumer Surplus). Price discrimination does not necessarily reduce consumer surplus. In this case in particular, there is a large surplus being created by the fact that planes fly more full, and I don't know any reason to think that consumers don't capture much or most of this .
        • gshulegaard 10y ago
          I would be interested to see how you would graph price discrimination not reducing consumer surplus. Price Discrimination in itself is about redistributing surplus from consumer to producer. > a large surplus being created by the fact that planes fly more full I think you are conflating surplus with utility. Full flights have more utility than not full flights...but the market surplus available is unaltered. Maximizing utility is not a bad goal to have...but it is distinct from Consumer and Producer surplus. > I don't know any reason to think that consumers don't capture much or most of this . Because in general most of the surplus is captured by the Producer and the producer doesn't have any incentive to redistribute it back to the consumer. Not having an incentive doesn't mean they don't, I am just pointing out airlines aren't incentivized to reduce the seat cost of a late purchaser by the amount of the cancellation fee for the person that cancelled their flight...or even offer the seat at the price the original person paid. Anecdotally (as mentioned in my other comment) we can compare United to Vrigin. Let's assume that a whole bunch of "surplus" is created by overbooking. United overbooks, Virgin does not. If the consumer captures most of this than United flights should be cheaper than Virgin ones in almost every way (ticket price, bag check fees, cancellation provisions, etc.). I fly from SFO-PDX twice a month. Virgin America consistently has lower priced fares than United. This is observational and anecdotal...but the result casts doubt on the hypothesis that the consumer captures most of the surplus generated by overbooking. Admittedly, I wouldn't expect the consumer to do so from a purely theoretical stand point .
• InclinedPlane 10y ago
  Not all airlines overbook. Case in point, JetBlue, which as a practice does not overbook. United heavily overbooks, which is closely related to their practice of trying to offer the cheapest tickets on major competitive routes. United lost over $2 billion last year. JetBlue made about $800 million in net income last year. So which strategy is "economically important" again?
• makecheck 10y ago
  The $10,000 change at United depends a lot on the implementation. For instance, if they continue to have rapidly-expiring vouchers, most travelers will not have any practical way to use the whole reward. Also, the airline could add conditions to vouchers such as a voucher that is completely “used up” by a ticket purchase even for tickets that cost less than the voucher amount. There are lots of ways they can try to create good press by technically giving you something that is hard to use.