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Airlines overbooking

Discussion in 'The Pub' started by Farab, Dec 3, 2009.

  1. Airlines overbooking their flights, as they reckon a small % of people don't pitch for a flight. So what?! The seat has been paid for!
    Sure , when everyone pitches up, they may sweeten the deal by bumping you up to business class, booking you into a hotel, etc., but what about the damn inconvenience, connecting flights, commitments/arrangements/other bookings made at your destination?!

    How do they get away with effectively selling the same seat (product) twice?

  2. Airline industry is a cutthroat business. To give you an example, GOOD period for the industry is when they regularly post 5-6% profits, which is pathetic. IIRC, the domestic airline industry in the US has posted a NEGATIVE profit ever since the invention of airplanes.

    If they only sold the seat once, they'd probably flying 20% (or so) below current levels. There's no way they could survive with such rates.

    If an airline came up with a business model that didn't overbook, they'd effectively have to charge you 20% more than what the current flight tickets cost. That might work for some (guaranteed of not being bumped), but I doubt the airline would stay in business for long.

    BTW, this overbooking business is similar for lots of hospitality industries, car rental business, etc. They simply can't afford to risk running far below maximum utilization rates.
  3. Thanks for that explanation. I still struggle with the concept of how you can legally sell the same product (seat in this case, for a particular flight) twice? I can't see it being much different than selling a, let say a cellphone, on ebay and another similar auction site and just hoping one of the 2 new owners don't turn up on my door to claim their property, after they have both paid.
  4. Not sure on the legalties, but I imagine it would cost a lot of money to keep a plane in the air. It would cost the company less to deal with irate customers than have an empty seat.

    Looking after their bottom line, very critical, especially if a GOOD profit margin is 5%.
  5. Yeah, I dunno about the legalities myself, but I'd imagine there's some loophole in the purchase contract (i.e. Such as consumer buying not the absolute right to the seat, but "a right of first offer" for the seat, etc).

    Regulatory bodies are probably scared to step in because if they enforced a rule where no overbooking were allowed, that would adversely impact ticket prices, which would adversely impact business travel, tourism income, etc...
  6. Yep that is common practice in the airline industry. I also think it sucks, but the sums and cost/benefit make sense to them.
  7. termis, I think the US airlines occasionally posted a profit, but overall are certainly deep in the red. In fact, the loss from the wake of 9/11 was greater than the total (net rather than gross i think) profit of commercial aviation since it began.

    Pretty sure I have a graph somewhere. I'l try and find it.
  8. Maybe you're not quite buying the seat for that flight, but I would have thought that your are definately buying the "trip/passage" on a specific flight, leaving on a specific time and day. If you end up not getting a seat, you can't make that flight.
    Still can't shake the feeling that its a form of double dipping and therefore unethical at the very least. I can't think of any other business that will get away with overselling a product and leave the customer with any fallout.
  9. In terms of probability, it's extremely unlikely that they'll actually end up overbooking an aircraft/car rental/etc. It's not like they're aiming to deliberately have 3x too many people trying to board the aircraft - they're aiming to get it somewhere around 95-99% full rather than 75% full.

    It's just that sometimes, maybe 1 in 100, maybe 1 in 1000, I don't know, too many people actually turn up to their flight. For once. Rather than being deadbeats and cancelling or simply not even turning up, like the past has reliably shown.

    I agree, it can cause frustrations when you're caught at the pointy end of an overbooking. Particularly in time-critical situations. It is a rarity, tho'.
  10. Yeah this really annoys me too....
    When we book a pay for a dog or pup to fly interstate we are NEVER assured he /she will get on that plane...If passengers rock up last minute and book their own pets on as luggage they will take priority over any dog traveling on its own, even though the dog traveling on its own was booked and paid for weeks in advance!

    I live an hour and half from the airport , not at all impressed when i drop a few pups off for their flights only to be rang 5 hours later to tell me one of them is sitting on the tarmac as his flight was over booked Grrrrrr
  11. Can remember back to the early 90's, and when travelling in the US, being offered $50 then $100 finally $150 to give up my seat for someone else on a continental flight.
    Seat on the next flight, and was tempted to do the same again - the steward almost running an auction until they got enough people to take the next flight.

    Was possible to pay $75 for a flight and be offered $50 cashback to take a differnt flight. Almost possible to fly free and make a profit if you had enough time and no connecting flights.
  12. Few years back, I was one of a group of 4 travelling around Canada & Alaska. We made all hotel & flight reservations well in advance (months!) and paid in full.

    We all rocked up to the airport to get on a flight for a connecting cruise and all went ok... till it got to my turn (WTF!). No boarding pass was given to me and I was told "you may not make this flight". I said "Yes I will, I have a connecting ship to catch and I paid for this flight months ago".

    Well, I watched everyone board the plane while I stood at the check-in desk & waved goodbye to my mates and waited and waited!!. Finally, I was issued a boarding pass and allowed on!!.