11 ms·

I don't really understand the reasoning behind overselling seats. Every time I hear it happen when passing though the USA I am reminded of the Seinfeld line, "

• rusanu 9y ago
  Sometimes people miss flights, or last minute cancel, for various reasons. If past statistics show the every 200 seats plane has 10 no-show passengers at departure on average, you can sell 210 tickets in average and depart with every seat occupied. Hotels do it too, and many more industries. https://en.wikipedia.org/wiki/Overselling https://en.wikipedia.org/wiki/Overselling
  • kylec 9y ago
    I used to work front desk for a hotel and we never oversold our capacity. In fact, we would normally block a few of our rooms from being able to be reserved in case of unexpected maintenance issues. If no maintenance issues arose we would sell those rooms to walk-ins. I can't imagine working someplace where, as a matter of course, people with reservations are turned away due to overbooking. It's likely that such a place would not last very long either, because as soon as people read TripAdvisor reviews about how your property doesn't honor its reservations they will stay elsewhere.
    • Someone 9y ago
      Airlines are different: people typically visit web sites to compare prices, not service. I think you'll find hotels targeting backpackers overbook, too (if they allow reservations, at all)
      • thomasahle 9y ago
        How would that work? So you arrive at your hotel, they tell you it's overbooked and you can sleep there for free the day after? That's hardly useful.
        • jaclaz 9y ago
          No, when it happens they find you another hotel room in a nearby hotel and either drive you there or have you driven there on a cab. But is not at all common, and when it happens it is more likely that the reason is not overbooking, but rather some incident (like a mistake in the bookings, a bathroom found leaking just before the customer arrival, a couple that booked a twin and then arrived with a 17 year old "kid", etc.)
    • smm2000 9y ago
      Hotels routinely oversell capacity - when this happens they just walk customers to comparable hotel nearby. Not sure why hotel you worked in did not do it. http://www.huffingtonpost.com/daniel-j-jones/how-to-avoid-being-walked_b_1855524.html http://www.huffingtonpost.com/daniel-j-jones/how-to-avoid-be...
      • CogitoCogito 9y ago
        Unfortunately this is _not_ what airlines do. They work very hard to book you on one of _their_ next available flights. I think that by law they should be required to book you on the next available flight by any airline in any class and additionally pay fines depending upon how long the passenger is delayed. They should also be required to make their best effort to find the available seats for the passenger.
        • arcticbull 9y ago
          What you're asking for already exists pretty much in the US under DoT regulations. If you are removed involuntarily (not asked to switch for a certificate) you're entitled to up to 400% of your one way fare up to $1350 cash in hand on top rebooking you, depending how long you got held up. [1] Theyre also required to show you your rights on paper in that situation. It almost never happens because there's a huge incentive for them not to do this to you. And if you think that's rough check out EC 261/2004 [2] and that applies even in the case or a mechanical issue. [1] https://www.law.cornell.edu/cfr/text/14/250.5 https://www.law.cornell.edu/cfr/text/14/250.5 [2] http://www.thisismoney.co.uk/money/holidays/article-2271213/How-claim-EU-flight-delay-compensation-EC-261-2004.html http://www.thisismoney.co.uk/money/holidays/article-2271213/...
          • CogitoCogito 9y ago
            I should have made clear I know that some of the rights already exist, but this was really my most important point: > They should also be required to make their best effort to find the available seats for the passenger. In other words, it should be their responsibility to get you re-booked immediately on all available flights. This should be something that should be verifiable afterwards (i.e. if you as a customer find out they didn't send you on a certain flight by another airline that was better, that should mean additional fines). This should be strongly enforced by regulators to the point where it actually occurs. Unless I'm missing something (didn't see it in [1]), those rules/enforcement are not currently place. Under these circumstances, I could _maybe_ accept overbooking as an acceptable practice, but without them I don't see why it should be acceptable.
    • losteverything 9y ago
      This. Ditto. "Maintenance rooms" are like Broadway's Rush tickets. Even most sold out hotels have maintenance rooms. Sometimes the only reason it is in "maintenance" is something simple. And could be rented last minute (as i did in similar job)
  • chx 9y ago
    > many more industries. In our industry, ISPs used to, many still do. Shared hosters definitely. VPS, way too often. That dedicated host with a gigabit port? Well, you have a gigabit inside the datacentre... beyond ... it's a big question and not all are honest about it.
• correnos 9y ago
  The reasoning is that some people cancel their reservations, so if you have a good statistic for how often that happens you can overbook to take up the slack and still have a full plane. Airliner margins are pretty thin, so they jump at opportunities to avoid "waste" like this. Scammy? Ehhh. People get way more than their money back for switching flights, which I consider enough to make it un-scammy. Others might reasonably disagree.
  • will_hughes 9y ago
    So why not sell standby tickets instead once you reach 'full'?
    • bsder 9y ago
      Because your last minute business traveler who is paying a big chunk of cash doesn't want standby. In reality, there is no problem to manage here. You simply wind the incentives up until people move. The "problem" is an airline too cheap to wind the incentives up far enough to get people to give up their seat voluntarily.
      • thomasahle 9y ago
        It seems a reasonable way to make rules for this would be to only allow airlines to kick off people who chooses so voluntarily.
        • peteretep 9y ago
          ... and in the vast majority of cases, that's exactly what happens. Involuntary bumps are rare.
          • URSpider94 9y ago
            Yes -- 0.007 percent of passengers, or about 70 ppm.
• tomhoward 9y ago
  Because on every flight, a certain percentage of people don't show up, and certain number of passengers are on "flexible" tickets, that can be transferred to a different flight even very soon before departure. By overbooking, the airline can ensure that all seats are occupied, which means more people get to their destinations when they want to, and the cost-per-passenger is lower (as fares don't have to include the overhead cost of empty seats). Most of the time their forecasts are accurate and the system works well for everyone. But occasionally their combination of forecasting, incentives to transfer and customer service practices go wrong, resulting in the horrible incidents we've heard so much about.
  • Fenn 9y ago
    This. (Disclosure: I'm co-founder of Adioso/Volantio btw) Just confirming the above: The no-show rate is actually relatively stable in _most_ cases, which is why airlines try and optimize for this by selling past physical aircraft capacity. In some markets it's illegal, in which case the average airfares are often notably higher. This can have a more extreme effect than is immediately obvious: Because "last minute" fares (the ones that often fill up the aircraft) are usually the highest price and are critical in how airlines are able to make flights profitable. Additionally, the most common no-shows are those who have booked early (the cheap tickets), meaning oversell allows the airlines to make space for urgent last minute travellers when the earlier ones don't turn up. Without catering for no-show, it's feasible that air fares could end up a LOT more expensive (potentially 20%+) to remain profitable, depending on the distribution of prices in the demand curve leading up to departure. You can certainly not do it, but on average, customers end up worse off (and the market is relatively good at optimizing this). The biggest problem (in our mind) is that airlines don't have a good "safety valve" in cases where things go wrong. That's what we (attempt to) fix.
    • mikeash 9y ago
      The airlines do have a good safety valve: offering people increasing amounts of money (not vouchers, but actual currency) until they get enough passengers who prefer the money to traveling on that flight. They just don't want to use it.
• ajdlinux 9y ago
  No-shows are way more common than most people think, especially given the proportion of frequent flyers who are regularly flying for business and regularly buying flexible tickets.
  • Sleeep 9y ago
    I think a huge reason would be a connecting flight being cancelled or delayed too. Maybe the majority reason. I've been booked so tight before that even a 15 minute delay or a gate change to another part of an airport would make me miss a connecting flight.
    • CaptainZapp 9y ago
      Airlines employ teams, who look exactly into that (connections and potential misses). The look at the number of late incoming passengers that have a connection and make the following calculation : Is it cheaper for them to hold the connecting flight, or does it make more sense, financially, to rebook them? Including paying for hotel rooms and compensation. Sometimes they have an agent at the gate of the incoming flight whisking the connecting passengers to their flight. Here's another dirty secret to ponder: An airline may bump you even if there are free seats available. The reason being weight limits. It can be far more profitable to fly an additional container to Hong Kong then those three passengers with cheap economy class tickets. Even with the additional cost, which this incurs.
• Someone 9y ago
  They wouldn't do it if there weren't a profit. Say you're an airline, and you notice that all your planes get fully booked, but on every flight, 2 to 5 passengers do not turn up or miss their flight. That means that you can easily sell 2 extra tickets for each flight. That's free money (as good as; fuel consumption will go up a tiny bit) Now, there's the rare case where too many passengers turn up. So, you pick out a college student or backpacker who is happy to take a flight an hour later in exchange for money, a free ticket for another flight, or whatever. That costs you a bit, but as long as it is rare enough, the net result still is extra money, and, ideally, everybody is happy. Airlines have departments that compute the ideal amount of overbooking. So, how can it be legal? That's easy; if you book a flight, you accept terms and conditions, and no government has seen reason to make it illegal.
  • baddox 9y ago
    I don't even see a problem with the concept, although customers should clearly be more aware of the precise terms. It's certainly no worse in principle than, say, fractional reserve banking. And obviously no one should end up with a bloody face.
  • davchana 9y ago
    I am very much ready to pay a single digit percentage of ticket price in return of guarantee of no-bump seat.
    • Larrikin 9y ago
      What about those that can't afford to pay. Are their plans less important because they can't afford the no-bump class?
      • estsauver 9y ago
        Yes? That's how things are decided in a capitalist marketplace, there's no real moral force that exists within a negotiated exchange. The obvious answer is "chartered jet" has a 100% seat guarantee, but that's an order of magnitude more expensive.
• feduzi 9y ago
  I agree. I do not understand the reasoning behind overselling. Profit, yeah, like the airlines don't make enough profit by cramming as much people as they can in the aircraft, and selling better seats for higher price.
• tinus_hn 9y ago
  Most of the time these seats can be sold without a problem occurring because the original travelers don't show up. So if you overbook your ticket prices can be 10% lower than those of the competition. As customers choose tickets based on comparison sites that order on ticket price only, ultimately the only thing that matters is the price. That's why there is overbooking, all kinds of cheesy attempts at hidden but obligatory fees and attempts at lowering standards to ridiculous levels such as flying without seats.
• pxeboot 9y ago
  Overbooking is rarely the result of intentionally selling 105 seats when 100 exist. It is far more often caused by flight delays (missed connections) and cancellations. Let's say United has 8 flight a day from SEA to DEN. Each are fully booked and hold 100 passengers. 1 of the 8 flights gets cancelled today due a major mechanical problem. If everyone from the cancelled flight rebooks a on a later flight, now each plane is overbooked by ~14 people. This happens everyday with every major airline.
  • peteretep 9y ago
    Do you have a source for airlines not regularly selling more capacity than exists, because that doesn't gel with my understanding
  • didgeoridoo 9y ago
    Only one airline explicitly does not overbook flights on purpose: JetBlue. This leads one to expect that their overbooking rate due to flight cancellations (0.5 out of 10,000 passengers) is approximately the rate you'd see across the industry if what you're saying is true. Instead, Delta and United (for example) bump passengers at 10/10000 and 7.2/10000, respectively. Your assertion requires that you actually provide evidence to counter these facts. As you have given none, I have to assume you are incorrect.
    • URSpider94 9y ago
      JetBlue, which does not oversell tickets, bumped .92 out of 10,000 passengers in 2016, "way behind United" (see article). source: https://www.fool.com/investing/2017/04/16/1-us-airline-never-overbooks-its-flights.aspx https://www.fool.com/investing/2017/04/16/1-us-airline-never...
• jasode 9y ago
  >Every time I hear it happen when passing though the USA Which country do you live in? I didn't know there were countries that forbid the airlines from overselling seats and forced them to fly airplanes with empty seats when there are no shows.
  • deleted 9y ago
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  • FireBeyond 9y ago
    Pre 2001 (late 90s, early 2000s), I'd on more than one occasion take a United flight from LAX to Melbourne via Sydney (same flight, deplaning people in Sydney) that would regularly fly the Sydney Melbourne leg with fewer than 50 passengers on a 747-400.
• mikeash 9y ago
  I see nothing wrong with it as long as they pay bumped passengers enough to secure their consent. Where it becomes a problem is when the airline decides they don't want to pay "too much" and start bumping people involuntarily. That should be illegal. If a flight is oversold and nobody will accept being bumped for less than $10,000, then the airline should have to pay $10,000 to resolve the situation. As it stands right now, the whole thing is skewed in the airlines' favor because they have a nice, low cap on payouts.
  • hedora 9y ago
    I think the problem is that the passengers can collude to take the airline's money hostage, since this turns into an unregulated auction of sorts. One person is willing to take $10,000? Great. Every other passenger is willing to refuse $9999 for the low price of $9999. Now, each passenger needs a 1/Nth of the payout, and that fraction needs to be >$10,000. Now the negotiation's starting offer becomes: "You overbooked by one seat. How much will it cost you to ground the plane, or fly it empty and bump us all to other flights? Give us that much money." Honestly, this outcome would be fine by me, since it would correct poor airline behavior pretty rapidly. They already let you buy standby tickets; overbooking is double dipping.
    • mikeash 9y ago
      Getting 100+ strangers to collude like that seems infeasible. The incentive to defect from the arrangement would be huge.
      • bb611 9y ago
        Yeah, I doubt the people paying $200 each way on a trans-US flight are going to hold out for $10,000. Once you're at 5-10x of your ticket price, people who actually have flexible schedules are going to be pretty interested. On most overbooked flights this needs to attract <5 people, so hard to imagine the passengers taking "the airline's money hostage".
      • SilasX 9y ago
        The problem is, risk management for big corporations still requires these kinds of guarantees against such events, improbable though they may be, in order to quantify the downside. There's a big difference between: 1) "Come on, you can't get 100 people to collude." vs 2) "There is a law that ensures our per-passenger liability saturates at $1350 plus re-booking costs." For similar reasons, they insure against a hundred different possibilities and require low-personal-judgment protocols to comply with the policy terms.
• DoubleGlazing 9y ago
  If I had exactly 100 widgets to sell, I can't take payment for 105 in the hope that at least 5 people won't show up to collect their purchases. That would be straight up fraud as I am knowingly taking payment for goods or services I know I can't provide to some of my customers. If it happened as a one-off accident then of course I can give refunds and offer something in compensation, but if I make a habit of it then the authorities would almost certainly start feeling my collar. Even allowing for the complex financials and T&Cs of the airline industry I really struggle to see how this is acceptable. If it in any other industry people would be arrested.
  • Merad 9y ago
    > If it in any other industry people would be arrested. Hotels and cruise ships (at the least) do exactly the same thing. They're all essentially gambling, and they win most of the time, so people don't really get angry enough to make an issue of it.
  • donald123 9y ago
    Think this way, if you have 100 widgets you promised to be delivered in a week, and you know you will have another 100 widgets coming in stock next week, would you take payment for 105 or more today, hoping at least 5 people do not mind to wait to get their widgets a little later?
    • DoubleGlazing 9y ago
      That's Okay because it is your genuine intention to fulfill your obligations. If you don't have enough widgets you can just order more, all orders will be fulfilled eventually. But flights are different. There is a hard limit on availability, plus most bookings are time sensitive. There are only a a certain number of seats available on each flight. You might be fine with being moved on to a later flight, but then again you might not. If you book and pay for a specific flight you should have every right to assume that the seat is yours.
  • bryanlarsen 9y ago
    That's standard operating procedure in the software industry. If I had a nickel for every time a salesman sold a feature that our software doesn't yet have...
• URSpider94 9y ago
  In the USA, nearly all airfares are changeable, even those that are sold as "non-changeable". In Europe, that's different -- the lowest fare class is often "use it or lose it", with the ticket becoming worthless if you don't get on the flight you booked. If you want to stop airlines from overbooking, then you need to stop travelers from changing their plans and leaving seats empty on the plane. You can talk about overbooking as "profit motive" for the airline, but airlines traditionally make very low margins. Air travel is a classic oligopoly, where a large number of competitors offer goods that are practically indistinguishable (Coke vs. Pepsi, Shell vs. Exxon, United vs. Delta) -- these industries are characterized by fierce price competition. Ultimately, any decrease in revenue from one source will be reflected in higher average ticket prices. An airline industry that didn't overbook would be one where either everyone pays significantly more for their tickets, or where most tickets become truly non-changeable, as in you have to buy a totally new ticket if you change your travel date or time. Honestly, a system like this, where the airline can do yield management transparently, days or weeks before departure, when people have time to weigh their options and make alternate plans, makes tremendous sense and does a lot to allocate costs to those who are willing to pay, keeping things less expensive for those who aren't.
  • kevin_b_er 9y ago
    And those "change fees" are $200, more than many shorter one-way economy fares.
    • rbcgerard 9y ago
      to be fair those change fees only apply to the discount economy fares - you can pay more to have schedule flexibility with a flexible/refundable fair
      • jasonlaramburu 9y ago
        I've never heard a rational justification for overbooking except that it allows airlines to sell more tickets than they have seats. On most airlines non-refundable fares have a change fee which cover the fuel costs in the event of a no-show. Southwest is the only one that does it right- their refundable fares have enough margin built in to cover no-show costs without change fees.
• adekok 9y ago
  > Clearly there is some sort of profit motive for the airlines, but how can this be legal. Because no one has done anything about it. There are any number of scummy beahviors which are still legal. In this case, if (say) 1% of people never show up for flights, that's incentive for airlines to over-sell by 1%. Because the case where everyone does show up is the 1% of the 1%. i.e. it's more cost effective to fudge things and deal with problems later. The issue is that they have shitty procedures for dealing with that 1% of 1% situation. They still want to screw the customer out of every penny, where they could be telling themselves "We made our money on the other 99%, If we give this guy his money back and some more for inconvenience, we'll still come out ahead". The insistence on screwing the customer no matter what is deeply ingrained in corporate culture. Money and bad marketing be damned...