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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 w
by 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 agoThe 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.
- Fenn 9y agoIt's a little more nuanced than this. Gate auctions are a good solution, but can only happen in the last ~15-20 minutes prior to departure, which leads to "too late" scenarios as everyone is already present/committed to travelling. Oversell is sometimes known with high confidence at checkin-close (1 hour prior to departure) or even before, due to the fact that oversell thresholds can change throughout the booking curve. Airlines don't have a current solution to rebalance/correct loads prior to the gate auction.
- mikeash 9y agoI can certainly see why they'd want to get people on a different flight as early as possible. This article just has a weird tone as if overbooking is a huge problem and the airlines are stuck with involuntary bumping unless they can figure out some novel technique.
- exclusiv 9y agoThey could stop selling the really cheap seats so far in advance which puts them in the situation of trying to scramble for last minute bookings to make it profitable.
- deleted 9y ago[deleted]