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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 st

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...
adekok 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 People do this all of the time... It's called accepting orders prior to manufacture. Most of the time it works out. When it doesn't, you deal with the consequences. And even if you lied to the customer, you just tell them you had manufacturing delays. And either refund them, or up-sell them to another product. The only reason we don't see this behavior in the news is that companies typically don't physically assault customers who have bought widgets that can't be delivered.
URSpider94 9y ago
Short but annoying answer -- you are not buying a widget, you are executing a contract of carriage with an airline, governed by a multi-page written contract and hundreds if not thousands of pages of associated government regulations. That contract gives both you and the airline a number of very specific performance requirements, and also a bunch of outs in situations like weather delays. To get into the longer answer -- seats on a plane are a special kind of commodity, because they become completely worthless the minute the door closes. If you really want to treat them as widgets, 99.999% of the time the result will be worse for the airline (they fly a plane with empty seats, which they do not get paid for), and worse for the consumer (people don't get where they want to go, because planes are taking off with empty seats). I will argue that a world where airlines overbook, we all get lower fares and better flight availability, passengers can change their tickets with nominal penalties, significantly less than 1% of passengers are compensated to change their flight plans, and 0.007% of passengers (that's 7 people out of 100,000) are involuntarily bumped with compensation (source: https://www.dallasnews.com/business/airlines/2017/03/20/hold-onto-seat-us-airlines-bump-fewest-passengers-two-decades https://www.dallasnews.com/business/airlines/2017/03/20/hold...) is better than the alternative.
- SilasX 9y ago
  >Short but annoying answer -- you are not buying a widget, you are executing a contract of carriage with an airline, governed by a multi-page written contract and hundreds if not thousands of pages of associated government regulations. But that is itself a problem: that they're banking on you not knowing your rights because the exact terms are so complicated. It would be a different matter if each purchase made it explicit: "This is really just a standby ticket with an X% chance of having to bump you, in which case you are paid $Y and booked on the next flight. To convert to a true reservation you may pay $Z."
  - URSpider94 9y ago
    At the risk of beating a dead horse ... Overbooking is not the only reason that airlines have to deny boarding. Sometimes, they end up making an aircraft change. Sometimes, headwinds dictate that they have to lower their weight. Sometimes (as in the now-infamous United case), they decide that they need those seats to carry crew. Sometimes, a seat is broken, and they can't use it. JetBlue is an airline that does not oversell seats (Southwest apparently also decided to join them in that practice this year -- my guess is that their unique no-assigned-seats boarding method gives them a lot more flexibility). Despite that, in 2016, they had one of the highest rates in the industry of forcibly denied boarding, significantly above the industry average. (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...). Each and every one of those had one of those "true reservation, it's not a standby ticket" tickets that you're talking about. Practically, when picking who to deny boarding to, airlines have some pretty clear rules. If you want to be sure you're going to get a seat, pick one for yourself when you make your reservation, check in as early as possible, and buy a refundable ticket.
gozur88 9y ago
But those people are still flying, for the most part. If the airline sells five extra seats and five people delay their flight for a day, it's not like they're selling something they don't have to provide.

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...

adekok 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 People do this all of the time... It's called accepting orders prior to manufacture. Most of the time it works out. When it doesn't, you deal with the consequences. And even if you lied to the customer, you just tell them you had manufacturing delays. And either refund them, or up-sell them to another product. The only reason we don't see this behavior in the news is that companies typically don't physically assault customers who have bought widgets that can't be delivered.

URSpider94 9y ago

Short but annoying answer -- you are not buying a widget, you are executing a contract of carriage with an airline, governed by a multi-page written contract and hundreds if not thousands of pages of associated government regulations. That contract gives both you and the airline a number of very specific performance requirements, and also a bunch of outs in situations like weather delays. To get into the longer answer -- seats on a plane are a special kind of commodity, because they become completely worthless the minute the door closes. If you really want to treat them as widgets, 99.999% of the time the result will be worse for the airline (they fly a plane with empty seats, which they do not get paid for), and worse for the consumer (people don't get where they want to go, because planes are taking off with empty seats). I will argue that a world where airlines overbook, we all get lower fares and better flight availability, passengers can change their tickets with nominal penalties, significantly less than 1% of passengers are compensated to change their flight plans, and 0.007% of passengers (that's 7 people out of 100,000) are involuntarily bumped with compensation (source: https://www.dallasnews.com/business/airlines/2017/03/20/hold-onto-seat-us-airlines-bump-fewest-passengers-two-decades https://www.dallasnews.com/business/airlines/2017/03/20/hold...) is better than the alternative.

SilasX 9y ago
>Short but annoying answer -- you are not buying a widget, you are executing a contract of carriage with an airline, governed by a multi-page written contract and hundreds if not thousands of pages of associated government regulations. But that is itself a problem: that they're banking on you not knowing your rights because the exact terms are so complicated. It would be a different matter if each purchase made it explicit: "This is really just a standby ticket with an X% chance of having to bump you, in which case you are paid $Y and booked on the next flight. To convert to a true reservation you may pay $Z."
- URSpider94 9y ago
  At the risk of beating a dead horse ... Overbooking is not the only reason that airlines have to deny boarding. Sometimes, they end up making an aircraft change. Sometimes, headwinds dictate that they have to lower their weight. Sometimes (as in the now-infamous United case), they decide that they need those seats to carry crew. Sometimes, a seat is broken, and they can't use it. JetBlue is an airline that does not oversell seats (Southwest apparently also decided to join them in that practice this year -- my guess is that their unique no-assigned-seats boarding method gives them a lot more flexibility). Despite that, in 2016, they had one of the highest rates in the industry of forcibly denied boarding, significantly above the industry average. (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...). Each and every one of those had one of those "true reservation, it's not a standby ticket" tickets that you're talking about. Practically, when picking who to deny boarding to, airlines have some pretty clear rules. If you want to be sure you're going to get a seat, pick one for yourself when you make your reservation, check in as early as possible, and buy a refundable ticket.

gozur88 9y ago

But those people are still flying, for the most part. If the airline sells five extra seats and five people delay their flight for a day, it's not like they're selling something they don't have to provide.