Most airlines' position is that they have to oversell flights, otherwise planes will fly with empty seats unnecessarily.
But from passengers' point of view, there aren't always enough people who'll voluntarily accept an offer to transfer to a different flight once they are at the gate awaiting boarding [this sentence was edited in response to kortilla's comment below].
Volantio's product applies sophisticated analysis to each flight's booking levels well before departure time (days or weeks before), and will send offers to passengers to offer incentives to transfer to less-full flights, allowing plenty of time for them to change their plans.
So far the product seems to be having an impact for passengers , gate staff  and airline management .
Disclosure: Volantio was a pivot from Adioso (YC W09), of which I was a co-founder. I'm no longer an active employee or significant shareholder. However I remain friends with the team and am pleased to see them doing well and solving an important problem.
There are; they just won't accept any offer. Most of the airline offers I have been offered in this situation were paltry: reschedule and some airline "credit".
Give me a partial or full refund, and I'll be much more willing to volunteer. Otherwise, you're seeing passengers value their time higher than some credit and lost time.
A few people took the offer, I didn't. As a result they denied me boarding and gave me the exact same deal, except it was a $1250 pre-paid credit card. I never expected to be quite so happy about not being allowed on a plane.
They were asking everyone and most people refused. I should have bartered harder to get an upgrade to business.
With most fares nowadays being non-refundable, why should the airlines care whether the seat is empty or not? It's paid for. If it's empty, that's a bonus because they save a little bit of fuel, time at the gate, and the passengers adjacent to the empty seat have a better experience. Empty seats that are paid for should be a win-win.
Airlines say that this means all the seats on a flight can be a bit cheaper as the cost of operating the flight is shared amongst more people but I'm skeptical of that. Businesses like free money and only pass that on as lower prices due to competition when they really have to.
Well, yeah, but that badly misses the point. Selling any product twice is more profitable than selling it only once, all else being equal. But in most industries, selling the same product twice is considered unacceptable. In fact, it would be considered fraud. The story that the airlines tell to make people think it should be acceptable in their industry is clearly bogus.
As for the rest, I dunno, maybe give them a break. Margins run at about 1%, give or take, so two empty seats matters. Heavy financial losses and bankruptcies are common for airlines.
On the practical side, people like to get to their destinations at their preferred time, so it’s good that airlines try and serve people by getting as many people as possible onto their preferred flight. And for environmental reasons people like to know that capacity/fuel isn’t being wasted.
Having worked with airlines for a long time, I’m no great lover of their business practices, but on this topic we can do a bit better than just presuming them to be greedy, exploitative monsters.
Airlines are under no obligation to offer fully flexible fares. If they screw up the business model so badly, maybe the answer is to simply stop offering them.
Put another way: banning oversell would mean that airlines routinely travel with more empty seats. This inefficiency would show through in higher ticket prices.
> In fact, it would be considered fraud.
Fraud involves deception. This doesn't apply in a market environment where it is widely known that they oversell.
The downside is that a free market isn't very good at adjusting to unlikely individual events.
I favour the legislative model in which airlines are permitted to oversell but there is statutory compensation due to anyone who is bumped. This provides the counterbalance to airlines taking it too far in risk to passengers.
No. You have to calculate for compensations for the people who have to be left behind because the flight was oversold. As you can read in the comments, those compensations can come in quite expensive. And rebooking passengers to other flights means that you can't sell that specific seat at the right price.
> Put another way: banning oversell would mean that airlines routinely travel with more empty seats. This inefficiency would show through in higher ticket prices.
Again: No. You have 100 seats, you sell 100 tickets. People have to show up to fly with you, no refunds if you don't show up. If this type of calculation does not cover your costs as the airline, you have a bigger problem in general.
> Fraud involves deception. This doesn't apply in a market environment where it is widely known that they oversell.
I find it highly deceptive that somebody is trying to sell me a seat which he has already sold and is now hoping that one buyer does not show up. To be honest, selling the same good twice and only delivering once could very well be a definition of fraud. Try that on some kind of marketplace and you will find yourself in quite some trouble in no time.
There are a lot of businesses which sell you a service assuming some "average" load. Web hostings, insurance companies for example.
That's even before I start whinging about my monthly train ticket.
But in pretty much any profession there's a chance of a promise not been met. If that happened I would expect an apology, and some kind of a remediation. For extra credit a small token of appreciation would also be nice.
No passenger, no profit.
Still, even communication on the morning of the flight beats finding out at the airport (Gold standard for poor service goes to airBerlin, who somehow managed not to inform me that they'd actually cancelled my entire flight days before until I turned up for it in Greece with a handful of other bemused holidaymakers, most of whom unlike me hadn't booked direct. I'd have accepted a much less expensive and more flexible date for an alternative flight though.)
This is blatantly false. I fly all the time and I see this happen about every other time at a neighboring gate. Gate agent announced flight is oversold, makes an offer. Several people volunteer. End of story.
You don’t hear about these events because they (used to) happen hundreds of times a day all over the US with no hassle.
Then the stupidity of United and the ignorant backlash of the public ruined it. Infrequent fliers associated overselling with the United incident and completely ignored the functioning 99.9% of cases that benefited all fliers overall.
Volantio’s product is ok, but it’s not a substitute to the problem overbooking was solving, nor is it better for passengers who were flexible with last minute changes (because the offers are worse since rebooks days in advance don’t solve the last minute flex fare changes).
Ugh, sorry about the rant but this whole oversale thing is a perfect example of the outrage culture damaging a mostly functional market due to sheer ignorance.
That said, though I can sympathise with the frustration, I've learned that sentiments like "ignorant backlash of the public" and "outrage culture damaging a mostly functional market due to sheer ignorance" don't get us to good solutions.
As you said, the problem is a real one, and Volantio has shown that it can be significantly reduced through smart application of technology well before departure time.
The United incident had nothing to do with overbooking.
1. Unites flight was not overbooked. They wanted to put some of their own employees on this flight. This has nothing to do with overbooking.
2. Law stats that you can deny boarding if a flight is overbooked. Let someone on board and then throw him off the plane was definitely not within the scope of the law, even should the flight have been overbooked. Try to tell this to the authorities, "we let more people on board than seats available and had to remove some..". Good luck with that.
So based on 1 and 2 the airline was wise to settle with the guy ASAP since throwing him off the plane had nothing to do with overbooking, nor was it in any way covered by law.
Proof that you are an idiot. Downvote this :-)
In fact, I’ve volunteered a few times. If I’m flying back home to visit family, arriving one day later isn’t a big deal when the airline pays for a hotel room, meals and offers enough comp that I could fly back home twice.
It was tomhoward's cofounder Fenn Bailey that also first introduced me to "microcaching" with nginx via some blog post many years back, a trick which has been of much use over the years.
[For anyone not clear on what is meant: Microcaching is the idea of doing caching with really short time intervals, maybe as low as a second. The point is to set the TTL for the cached data so short that users will rarely if ever notice stale data even for dynamically updated content. The upside is that even a 1 second cache time for a heavily requested page means only 1 request per second per frontend for that resources hits your backend, no matter how much your traffic increases. Super-short TTLs often allow you to cache resources that you otherwise couldn't, and still get a hard upper bound on the load they'll impose]
That micro-caching trick was so cool. It wasn't actually for Adioso, but for the Falls Festival, a huge New Years Eve outdoor music festival here in Australia. The coolest application we heard about for that technique was when Google did a doodle for Robert Moog's 78th Birthday , and the Moog company's humble little website got hammered.
Yes, pretty much all airlines are overselling. However, Air Canada employees speaking on condition of anonymity are stating that business as usual for the airline is to string customers along until the last minute, even if it is known well in advance that they are not going to be boarding. That is to say, passengers with GTE on the gate indication of the boarding pass will not be boarding but are lied to and told that they will be assigned a seat at the gate.
Regardless your views on overselling, you probably take a very different view about being lied to about your likelihood of boarding a flight as you check in.
Frequent travelers know that getting a boarding pass with a seat number actually a race they don't want to lose, and will hound the call center if there's a problem with online check-in.
† Personally I think that airlines regulated and given two options for overselling flights:
1) If you miss your flight, and a paid passenger takes your place, you should be informed and not suffer financial consequences (re-booking fees, etc).
2) If the airlines has already sold a full flight and starts knowingly overselling, it should be communicated to the passenger when they buy the ticket ('priority standby' or something). This would, of course, make customers value these tickets less.
I think the EU regulations regarding denied boarding are pretty good (or at least a good start).
If someone buys a ticket and does not show up for a flight then usually they don't get a refund/credit (or a crappy one: I'm looking at you United).
But now the airline has an empty seat. The best thing to do is fill it. But you can't fill it the last moment so you need to overbook. But if you overbook too much then you need to start bumping people off. So the airline gets to keep all the revenue from the overbooking as well as the fees for the refund which can be substantial. It's a bit like double dipping.
I remember as a kid flying "standby". You got a cheap ticket but had to sit around until a seat opened up. What killed standby tickets? Post-9/11 security hell?
People should support airplanes flying full.
Ok, so environmentalism doesn't matter if it's inconvenient.
That's pretty far from greedy.
> This per-passenger profit is roughly double what airlines around the world make per passenger, according to the International Air Transport Association
I've seen lines of standby passengers at Frankfurt, waiting at the gate just in case they get lucky at the last minute, but knowing in advance that they don't have a seat on that plane unless somebody else fails to turn up; and I'd assumed that the European carriers probably do overbook but manage it at check in time; I've never seen or heard of anyone ever getting turned away at the gate when they already had a boarding pass.
That said, I've had a gate agent try very hard to bump me off an intra-EU flight which I assume was due to overbooking (I was on business, so I expect they bumped a later arrival with a more expensive ticket instead...)
The same applies for flights cancelled for operational reasons, and the airlines may end up having to book tickets with one of their competitors if the competitor have seats available.
Ah. So presumably, as a Brit, I can look forward to a new influx of shitty business practices starting in six weeks' time. Yay.
It is a pathetic, deplorable strategy based on pure greed. I am saddened that in a place like EU this is still not tackled properly. The compensation for messed up plans is pathetic and clearly not punishing enough to airlines to abandon this practice. I am sympathetic for delays/cancellations for causes out of influence of an airline, but this is conscious risk taken by airline and big FU to travellers.
No. The number of pax that show up is somewhat random, the number of seats on the plane is somewhat random (weight and balance, broken oxygen mask or seatbelt, higher priority pax such as crew that need to be ferried to a flight that could not otherwise go, etc.)
To always plan such that the highest possible number of pax is smaller or equal to the lowest possible number of seats available is wasteful.
Why don't people understand that an airline operates under different constraints than a bus company or a train operator? In a plane, you can't just have a few more people sit in the aisle.
Now, like any stochastic problem, you assign weights to both suboptimal outcomes (empty seats, bumped pax), and optimise, which leads to modest overbooking. Now, most of the time everyone gets along (and more people than without modest overbooking), and sometimes some people are denied boarding. Some people need to be at a certain place at a certain time, and some people don't care if they're a day or two late. So you ask for volunteers and compensate.
It's not only perfectly rational, but also perfectly moral.
Why don't you get upset that people ever have to wait for surgery? Why don't we double the number of doctors and hospitals, so that always anytime someone needs surgery they can immediately get it? Well, because it's prohibitively expensive, and it's much more efficient to keep the facilities utilised as fully as possible, and shift around the demand (patients) a bit. Is that a deplorable strategy based on pure greed? No, it's a sensible optimisation to utilise scarce resources as well as we can.
Talking of greed, do you know how to make a small fortune in aviation? Easy, start with a big fortune.
Of course, regulation could make bumping pax even more expensive and thus change the calculation. That would probably lead to higher ticket prices and more (but emptier) planes in the air. Is that preferable to the current "pathetic, deplorable strategy based on pure greed"?
EDIT to add: This is assuming decent communication, and decent compensation for bumped pax (as is the case in Europe). I'm not really familiar with the situation in Northern America, if they just bump pax without compensation and/or lie to them, that's clearly not good, either.
I've never experienced the process of asking passengers who wants to stay. Only finding out at the gate at the last moment. Also seen it happened to many other travelers while I passed through - finding out their ticket won't get you through the gate - shocked, frustrated, pissed off. You seem to be an airline apologist, maybe an insider? Or you just never faced the situation described?
Way too many wrong/incorrect statements in your post to cover all of those, and tons of whataboutism. But at least some:
> Why don't people understand that an airline operates under different constraints than a bus company or a train operator?
Why oh why... should I care? Its a public transport offering, nothing more or special. It certainly doesn't give them some extra credit so they can act amorally to maximize profits.
> To always plan such that the highest possible number of pax is smaller or equal to the lowest possible number of seats available is wasteful.
By your logic, we should all be transferred like a cattle, since it would be way more efficient, and who cares about treating customers with basic dignity when you can optimize, right?
Bottom line - my opinion is airlines should pay extra to people they on purpose deny boarding due to overbooking compared to other causes, only because their wonderful analytical methods and systems screwed up again. In all my overbooking experiences, the compensation was too small to even cover additional expenses I had to pay to cover for the mess created by airlines. And how do you compensate stress, frustration, missed opportunities, reduced time for vacation etc on top of that? Also the process of retrieval compensation is often as complicated as possible, ie that LOT took quite a few calls to their support to send me a 'secret' link you simply can't find on their website, and it took more than 2 months to get money after filling it. It was even an EU regulation breach, but do you think anybody at airline cared? At least some other airlines were more direct.
How do you apologize the fact they let you roll through check in, but send you home/to hotel only at the gate? It is really a wonderful experience, apparently you might benefit from that humiliation a bit and see things from customer's perspective.
Is there anything that keeps the fine increasing alongside inflation?
Air Canada Revenue Management’s team is tasked with ensuring that the maximum
revenue potential is made on each and every flight we operate.
As it is known that a certain percentage of confirmed customers do not show for their flights, it is sometimes necessary to sell more seats than aircraft capacity.
Revenue Management uses a sophisticated system that uses “day of” and historical
information to monitor all flights in Air Canada’s system, calculating the acceptable level of oversell risk.
Hotels do it too -- in the 90's I worked for a hotel chain and helped integrate an airline vendor's revenue management system into the hotels central reservation system. Just like the airlines, hotels use past booking and seasonality/special event data to figure out how much to charge for rooms and how much to overbook to maximize revenue. Prior to the software, hotel managers did it manually.
Pretty much every industry that sells products subject to spoilage does it too -- a grocery store determines how much bread to order to avoid throwing away spoiled bread that didn't sell before it spoiled while avoiding running out (the equivalent of overbooking - the consumer wants it but can't have it). But grocery stores and airlines have the opposite problem - airlines can't control supply (in the short term), they have a fixed amount of product to sell so they primarily use pricing to control demand. Grocery stores control supply (within reason) so if demand changes, they can just order more or less product (but they can also alter pricing).
Maybe if you know what magic words to ask, and specifically ask them - but at that point, you should already know the answer.
I don't mind this at all so long as my compensation for not being allowed to board is high enough. That is: who is allowed to board should not be decided by the airline. It should be decided by the airline asking passengers who can accept taking the next plane. "We have an overbooking of 3 passengers, passengers willing to take the next flight for €300 please contact gate 49.".
I have seen this work. I have seen people rush to get that compensation check (presumably because they had no time to keep, or even a long enough connection that it doesn't matter for their final arrival time).
If I'm going to a wedding and can't be late, I'm not going to volonteer to take the next plane.
Obviously: if the airline randomly selects passengers to not board, without flexibility or "auctioning", that is absolutely unacceptable. That will invariably lead to the passenger selected being the person that can't be late for that wedding being the one booted. Basically: if there is even a rumor of your airline doing that - find another airline and let them know.
I've taken 4-figure VDBs and been quite happy with the result.
In the EU, I've been asked multiple times if I'm OK with flying on the next day. 300€ / 600€ (if +1500km) and a nice hotel are quite nice as a student.
Never understood why overbooking is considered annoying in the US.
Somewhat unrelated but I had a terrible time with Air Canada a couple weeks ago for a YUL > EWR flight. Flight was canceled right before it took off. Gate agent was like "Sorry. Flight cancelled due to weather, here's a pamphlet with information and this is the exit door to lead you out of the departure area, we can't do anything for you."
That wasn't the issue. The issue was I had purchased liquor at duty free and needed to return it. I very clearly asked the gate agent if going out that door would still leave me the opportunity to return it. "Yes, no problem". Well the door dumps you into the connecting area of YUL, leaving you no way to re-enter the airport without passing through customs back into Canada and then security to go back to your flight again, where you now have to check the bag with liquor in it.
Gigantic pain in the ass. Wasted over two hours of my time from having to check and retrieve the bag. Fortunately, they were able to rebook me manually on the final flight out that day, automatically I would have been stuck 2 days.
EU air passenger rights https://europa.eu/youreurope/citizens/travel/passenger-right...
The reason is that Iceland is in the EEA. Part of the rules for having free access to the market is that Iceland has to accept EU rules. Basically they get all of the regulations but have no seat at the table. Norway is in the same boat.
- If your flight is within the EU and is operated either by an EU or a non-EU airline
- If your flight arrives in the EU from outside the EU and is operated by an EU airline
- If your flight departs from the EU to a non-EU country operated by an EU or a non-EU airline
- If you have not already received benefits (compensation, re-routing, assistance from the airline) for flight related problems for this journey under the relevant law of a non-EU country.
So pretty much all flights departing from within the EU is covered.
It's in the next paragraph.
Eg, from the TSA:
> You may carry duty free liquids in secure, tamper–evident bags, more than 3.4 oz or 100 ml in your carry-on bag if:
> * The duty free liquids were purchased internationally and you are traveling to the United States with a connecting flight.
> * The liquids are packed in a transparent, secure, tamper-evident bag by the retailer and do not show signs of tampering when presented to TSA for screening.
> * The original receipt for the liquids is present and the purchase was made within 48 hours.
And the EU[^2]:
> * EU duty free liquids which have been obtained at EU airports or on board of an aircraft of an EU carrier on condition that they are packed in packed in security tamper-evident bag (STEB), inside which proof of purchase at airside at that airport on that day is displayed, as recommended by International Civil Aviation Organization ;
> * duty-free liquids purchased at certain airports in Croatia, Malaysia, Singapore or at international airports in Canada or the U.S on condition that they are packed in a STEB inside which satisfactory proof of purchase at airside at that airport within the preceding 36 hours is displayed.
I don't believe the gate agent should have allowed the GP to keep the duty-free items (they should have been held until they were on their next flight). I would have found a member of the airline staff ASAP.
And obviously, these don't cover all scenarios. They're likely fine for the vast majority of the travelling public.
[^2]: With flights directly from Australia now feasible, the second part of this section should probably be updated.
I recall working for television systems management and having a revenue and yield optimization consultant from the airline industry present to our company with methods we could use to increased revenue by booking even more spots than we had and either pre-empting more low value TV spots with automatic optimization and moving of the spots, or simply taking more time away from marketing or promotional ads from the network.
Most of the practices recommended by this consultant we had already implemented, but there were some really neat recommendations specifically from the airline industry in order to maximize revenue, most of them revolved around overbooking. Eligible TV spots would be automatically moved forward (front-loaded) into weekly rotation selling options (groups of program sold under the same name and price).
I could go on forever, but I suppose as a general comment regarding revenue management and yield optimization there is nothing which surprises me about these practices.
I had this exact experience a few weeks ago with Air Canada out of Vancouver. I ended up with the dreaded GTE on my boarding pass, buy essentially refusing to be extorted ( paying for preferred seating)
You would think, buying the damn ticket entitles you to a seat, but not in Air Canada, unless you are willing to pay extra.
the most recent time I had this issue, The office travel coordinator booked my flight, I got an email asking me to go online and select a seat. except the system wanted to charge me $15 to select a preferred seat, and no option to select a seat without paying extra.
I actually called customer support and they told me, the only way you can be guaranteed a seat, without paying extra for it is to wait and login to their website exactly 24 hours before the flight and manually choose a seat.
otherwise you will not be guaranteed a seat and will be on standby and assigned a seat at the gate.
It felt like extortion, and is one of the sleaziest companies I have ever dealt with.
unfortunately, I cannot book my own business trips, and it takes a while for the new travel coordinators to believe me when I tell them "I would rather crawl across the country then fly on Air Canada"
For example, British Airways heavily oversells their LHR-USA flights in business, premium economy, and economy. This often means that business class passengers get upgrades to F, premium economy fills business and if necessary, they can bring economy passengers forward.
This strategy works for them because they have a ton of very large planes on some routes that can go through spurts of heavy loads.
The whole point is to make this process more predictable for travelers. The tech exists, only the political will to force its use is necessary.
They do -- they call it a "full fare ticket" -- airlines bend over backwards to accommodate these full fare fliers, even if it means bumping a paid economy passenger from the flight. Though it's a pretty steep fee -- usually several times more than the restricted fare.
I’ve booked on fully sold flights in a full fare class a few days before and the wait list clears, often in a few hours.
I travel air Canada 30+ times a year. GTE strictly means what it says - you don't have seat assigned and you may get one at the gate. They cannot help you at the checkin until they know who all is boarding. So from that perspective strictly, I understand that sending them to gate to await their destiny,rather than try to resolve at the checkin counter. At the checkin,you are a Schroedinger passenger - just don't know if you'll make it or not. There's nothing they can do to you there.
I do not believe it is correct to imply that GTE absolutely means you WON'T be boarded and thus its a complete lie. I have had that on my pass and have boarded - granted I have a bit of priority (lowest status level). Colleagues without status have had same experience. You just don't know.
Article also doesn't advise strongly enough to do an online or early checkin.
What is not clear from your statement is that, if you try to check in online, you must pay for seat selection, unless
You check in to the website 'exactly' 24 hours before your flight, even a few minutes earlier you have to pay extra just to get a damn seat.
there is no option for "I dont care just give me any seat"
you do not have the option of checking in and choosing a seat at the time of purchasing your ticket. I dont know about you but that feels like they just want to charge me extra unless I jump through ridiculous hoops just to get a seat for a ticket that I have already paid for.
I have been put on GTE for exactly this reason at least 6 times in the last year, and have not eventually been given a seat only once and bumped to the next flight
There’s a world of difference between “your seat will be assigned at the gate” and “your seat may be....” The former, which is what I think most airlines actually say, strongly implies that you do have a seat, though they are still determining which one it is. The latter is often what they really mean.
If you are reasonably savvy, the fact that this is unusual ought to clue you in. However, that signal now is a bit diluted with all of the games airlines play to get you to pay extra to choose a seat so....
I remember one time connecting in to Vancouver and asking if I could could jump on the earlier flight rather than waiting 3 hours. Done this multiple times with US carriers if there is room. What do they care if the seat would have been empty otherwise?
I was informed by the AC agent that there would be a $175 fee for the ticket change. Plenty of other examples of rigidly following the rules even though it cost them nothing.
If you had asked to standby for the earlier flight, you would almost certainly have been told "ok we've put you on the list; check at the gate" with no charge.
Good point. I'll keep that in mind the next time!
It might depend on how (over)sold the flights are. If your original flight is oversold and the other one is not, it seems like a win-win situation.
I've worked for airlines so that they could do this, including Air Canada. Yield management is how airlines live and die.
A few of us commented on how convenient it was that the plane needed maintenance and three flights on the same route were only 2/3rds full. What are the odds, he asked sarcastically.
The correct way is of course to deal with this before the gate and arrange it then. "Sorry, our flight is overbooked, would you volunteer to take the next one with a compensation of $100?"
- Choosing ANY seat in economy or getting any transparency into where they are putting you comes at an additional charge. I haven't seen this before, not sure how common it's become.
- While at the gate, I received a push asking if I wanted to BID on an upgrade to first class. I could "offer" anywhere between $450 and $900 and see whether or not I'd snag a better seat.
Air travel has long since become an anti-consumer race to the bottom. Capitalism has failed here.