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Transportation Businesses Math

Are Airlines Intentionally Overbooking Their Flights? (popularmechanics.com) 313

"if you sell one seat to two different people, and only one of them shows up, you get extra money," explains an article in Popular Mechanics shared by schwit1. Citing a recent TED-Ed video, they argue that the airlines' strategy for booking flights "makes perfect sense, just not for you." The most frustrating part? This math could be tuned to ensure the maximum number of tickets sold with a near zero percent chance too many people show up. Instead, the most profitable solutions often involve a decent chance a few passengers getting screwed, because the extra ticket sales outweigh having to put someone up in a hotel now and then.

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Are Airlines Intentionally Overbooking Their Flights?

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  • YES (Score:5, Informative)

    by Anonymous Coward on Saturday December 24, 2016 @11:39PM (#53550583)

    Next question?

    • Re: YES (Score:4, Insightful)

      by Anonymous Coward on Saturday December 24, 2016 @11:43PM (#53550597)

      No shit. This has been standard practice in any type of business that makes bookings for anything for many decades, and it isn't a secret. Are people really this dumb? A TED talk? Really? Beginning to think cavemen were more advanced than 'educated' people today. As stated: YES

      • Re: YES (Score:5, Interesting)

        by thinkwaitfast ( 4150389 ) on Sunday December 25, 2016 @12:00AM (#53550655)
        I had a friend in college who was doing this 30 years ago. He would buy the most expensive ticket from Phoenix to San Diego for Friday afternoon. Every Friday he would go to the airport and give up his ticket in exchange for a refund and a free ticket to anywhere in the country. Since they were all but guaranteed to be at least five people wanting to get on the flight, it was a no brain scam. I remember at one time over Christmas vacation he showed me a stack of 35 tickets that he had gotten. He used a few, but mostly resold them. Life was a lot easier then. It paid for his college.
        • Re: (Score:3, Interesting)

          by Anonymous Coward

          That's strange. That doesn't make any sense. Why were they repeatedly overbooking flights by such a huge amount when someone at an information disadvantage was able to notice a pattern and exploit it for such a huge profit? Seems like someone wasn't doing their job.

          • Re: YES (Score:5, Insightful)

            by ShanghaiBill ( 739463 ) on Sunday December 25, 2016 @01:57AM (#53550907)

            That doesn't make any sense. Why were they repeatedly overbooking flights by such a huge amount when someone at an information disadvantage was able to notice a pattern and exploit it for such a huge profit?

            Not only that, but if a flight was over 100% booked 35 times in a row, the airline would either raise the ticket prices on that flight, or add extra flights to the route. The story makes no sense, and I don't believe it.

            • Re: YES (Score:5, Interesting)

              by jdgoulden ( 1575977 ) on Sunday December 25, 2016 @02:27AM (#53550961)
              My thesis adviser and his wife did much the same thing; book all of their travel at peak times, then take the bump and the free ticket / bonus miles / whatever and the free hotel room and fly out the next day. They flew mostly for free for the entire time I knew him.
            • It was obviously not the 'single' same flight, but basically every flight of most american airlines.
              You are old enough to know people who did that, too. Even I know people who did that in the USA, and I live in Europe. Overbookiing is here forbidden ... for a reason.

              • Maybe intentional overbooking is forbidden. But several airlines sell tickets that allow you to fly anytime without prior notice.
                So, how does that work, if several people with such tickets decide to take a fully booked flight? Someone else will be told that the flight is overbooked, and the people with their expensive flexible tickets get what they want.
              • ...I live in Europe. Overbookiing is here forbidden...

                No it is not and it does happen. The difference is that the compensation payout is much, much larger than what you get in North America thanks to the EU air passenger rights. I was on an Air Canada flight from London to Edmonton a few years ago which was over booked. They paid me just over $900 plus food and accommodation to take the flight the following day. A year before going in the opposite direction (Canada to Europe) they only offered $300 to take a flight which was 3 days later!

            • I forgot:
              the airline would either raise the ticket prices on that flight: it can't. Then it would no longer be competitive with those that don't rise the peices.
              or add extra flights to the route. For that it would need:
              a) buy a slot for that flit from the air traffic authorities
              b) have a plane (last time I checked they cost a 'couple' of millions
              c) have a crew, and depending on distance a second or third crew to keep the plane flying when the other crews have their mandatory rest

              The story makes no sense, a

            • by lgw ( 121541 )

              Airlines weren't so optimized 30 years ago - many flights you could get standby seats reliably (I remember flying "student standby", which is lower than standby, for $30 or so). Other flights were always overbooked. Oddly enough, there were a lot of airline bankruptcies back then.

            • Re: YES (Score:4, Informative)

              by AmiMoJo ( 196126 ) on Sunday December 25, 2016 @06:01AM (#53551317) Homepage Journal

              The video linked in the summary explains it well.

              Basically maximum profit is achieved by consistently overbooking. Normally some people don't turn up, and if there are people who need bumping and compensating that is offset by the extra profit from all the other times overbooking paid off.

              It's not entirely true that passengers don't benefit from this. Ticket prices would be higher if they didn't do it. So you trade a very small chance of being bumped for consistently lower fares.

            • Re: YES (Score:5, Informative)

              by Xest ( 935314 ) on Sunday December 25, 2016 @08:51AM (#53551659)

              Um, what? The story makes no sense? I saw this article and thought why is this even a story, this isn't a magical revelation, this has been simple fact for many years. I don't even know why this would be news to anyone, let alone people denying it.

              The airline industry has long been doing this, they can't simply raise prices or add extra flights because that means they become less competitive against others flying the route, and they can't just add extra flights because it can sometimes be impossible to get hold of extra capacity on a route. Try getting a slot from Heathrow because you want to increase capacity, have fun waiting years until it's your turn in the queue as an airline requesting an extra slot on the airfield and flight plan.

              It doesn't matter if they have to pay a few people compensation, paying double the flight cost charged every flight for one or two people isn't exactly a big deal when they've doubled up say 10 seats.

              Consider they have 200 seats, they sell 210 tickets, 8 people don't show because they missed their connecting flight, or someone fell ill, or it was just a cancelled business trip and the tickets are non-refundable then sure they have to pay 2 people double the cost of the ticket as compensation, but that means they're still 206 tickets profit up on a flight that only holds 200 people.

              It's really just an insurance type setup for the airlines, as long as they optimise their calculations based on data so as they maximise the number of tickets sold vs. the number of tickets actually used then they're going to increase their profits. This is exactly what they do and exactly what they have done since at least the 90s at busy airports. Yes there are people who know how to play the system, but that already gets factored into the calculations airlines make in terms of how many tickets to sell - it's a complex statistical operation and has to factor in things like local events; i.e. if there's been a damaging hurricane at the destination a lot more people might choose not to fly, so they oversubscribe seats by a higher number knowing they'll get more no-shows.

              The news for me here is that people weren't aware of this, I always figured it was pretty common knowledge. I'd have thought pretty much anyone whose flown from a major airport would've known about this having seen it first hand and having asked any of the staff the question. This is even more the case as I figured people were more aware than ever nowadays of the sorts of profit maximisation analytics that occur at companies of which this is just another example.

              The fact is flying a plane costs a lot of money, so they want to maximise the number of people on that flight. There's a heavy baseline cost of lifting that massive flying tube into the air, and the more tickets sold against that baseline the more profit for the airline. Simplistic mindset type free market economics of "they should just raise the prices!" don't work when you have constraints like airport capacity. Some countries/airports even enforce penalty costs on flights that aren't carrying sufficient numbers of passengers when the airport capacity is near maximum - they can't justify having a carrier taking up a slot that isn't carrying many people so issues like that too incentivise airlines to do everything they can to fill up their planes regardless of the impact on customers. It's a pretty shitty cutthroat industry in general in this regard.

              This story is absolutely spot on, it's also at least 30 years too late to be called news too though unfortunately.

        • I second that.
          A friend of mine did the same.
          They were actually a small traveling group of about 3 and used to get the original tickets replaced, either for a later flight or in cash, about $50 for the invonvenience and often a hotel voucher or vouchers for some shows (and often they earned the miles for the flights not taken)
          That was around the mid 1990s.
          He did not 'finance his studies' in the US that way, but his holidays. What do you exactly care where you exactly fly to next days when you can fly for fre

        • I did not do this deliberately, but decades ago with People's Express airlines I flew the day before Christmas. I had the first flight oin the morrning, and volunteered to be bumped 3 times before the ticket agent insisted I get on the next plane. It did pay for my personal air travel for the next year.

          It was understandable economically. Keeping that extra small percentage of seats full keeps money coming in to the airline's coffers for that month, and helps expand reports of their numbers of riders and ove

          • Full seats don't make money, sold tickets make money. If they could sell 200% of the seats and get away with it, they would. As it is, I think the actual percentage of no-shows runs 5-10% (depends on route, season, etc.), they study this carefully and oversell by 7-12% matching the predicted rate of no-shows and exceeding by a calculated amount. The "bumped" are accommodated on available space in other airlines, or wherever/however they most cheaply can be enticed off the plane.

      • This is business optimization 101, somewhat analogical to seasonal inventory optimization in presence of probabilistically distributed demand, where depending on the revenue for sold units and losses for unsold units, the inventory order for optimal profit may not coincide with most likely demand. Freshmen are taught this.
        • How !! (Score:5, Interesting)

          by invictusvoyd ( 3546069 ) on Sunday December 25, 2016 @01:11AM (#53550817)
          is it legal to sell one thing to two different people?
          • Re:How !! (Score:5, Informative)

            by ShanghaiBill ( 739463 ) on Sunday December 25, 2016 @02:02AM (#53550915)

            is it legal to sell one thing to two different people?

            It depends. If you read the fine print on the back of your airline ticket (or on the website if you buy online) it specifically says that you may get bumped, and it also says that a refund or replacement ticket is your only legal recourse. You agreed to those terms when you bought the ticket. So in this case, yes it is legal.

          • Re:How !! (Score:5, Insightful)

            by Solandri ( 704621 ) on Sunday December 25, 2016 @03:07AM (#53551019)
            Careful what you wish for. If it were illegal to sell one seat to two different people, yes your flight would never be overbooked. But if you missed your flight, you wouldn't be able to get a refund or rebook. The airline would say tough - by law that was your seat and only your seat. Once you bought it, by law they weren't allowed to sell it to anyone else. So once you bought it it was yours period. If you missed the plane, that's not their problem. If you want to get to your destination, you'll have to buy another ticket.

            I like the current system. The airlines usually have enough people overbooked or on standby that they don't lose money when you miss your flight, and they extend the favor to you by rebooking you on a later flight at no extra charge. No need to buy a new ticket. And usually there are enough volunteers willing to be bumped that a forced bump is very rare.

            The quote in TFS has it backwards - you arrive at the conclusion that overbooking is bad if you only consider what makes perfect sense for the customer, and completely ignore what makes sense for the airline. If you forcibly implement a system that costs the airlines more money, well they have to make that money up somewhere. In this case it would be from the wallets of passengers who miss their flight. The current system represents a good compromise where the desires of both the airlines (to have full flights) and passengers (to be allowed to rebook without penalty or with minimal penalty if they miss a flight) are taken into account.
          • by Calydor ( 739835 )

            They aren't selling you a seat.

            They are selling you a LICENSE to sit in a specific spot on THEIR airplane at a specific time.

            Just like the weasel words "on a computer" and "on the internet", "license" is the new get-out-of-jail-free card.

          • Yes it's a service. The law protects the consumer to ensure they will eventually get what they paid for which is transport within a window listed in the terms of sale.

          • Of course it isn't, because they don't offer you a refund or a ticket on an alternative flight and hey kick you in the nuts too. That's whey pretty much every time you go to an airport you see check-in agents being dragged away in handcuffs.

        • It's a linear programming [wikipedia.org] problem.
    • by rastos1 ( 601318 )

      YES
      Next question?

      What about Betteridge's law?

  • by Anonymous Coward on Saturday December 24, 2016 @11:42PM (#53550593)

    Yes, and they have been doing it for at least the last 30 years from my memory. From what my airline industry parents tell me, this practice was prevalent 50 years ago as well. Get with the times PopSci

    • by hey! ( 33014 )

      Hotels do this too. And as much as it sucks to get bumped from a plane, it *really* sucks to show up at a hotel and not have a room, especially when there's a big event on in town.

  • Duh... the airlines will sell a ticket to every passenger willing to pay a sufficiently high price at the time of sale... and deal with the consequences later. They value your time at zero, so it is only accommodation expenses that they have to foot the bill for.

    You need to understand how to protect yourself, especially on high risk tickets. Not rocket science.
    • Train and bus service has been doing the same thing too. Nothing new. I've even been to a concert where me and another person had the same ticket seat.
    • This is a really immature view of the practice, bordering on conspiracy theory. The airlines are optimizing to overbook as close as possible to the rate of no-shows/changes, but when they get it wrong they lose money. You pay $300-500 for a RT fare and if they have to VDB you on a single leg, they will spend $400-650 on vouchers, meals, and possibly hotel. And if they have to IDB when nobody volunteers, things get a lot worse for them.

      You want them to do this. It increases efficiency and keeps ticket prices

  • Yes (Score:5, Interesting)

    by Dutch Gun ( 899105 ) on Saturday December 24, 2016 @11:43PM (#53550601)

    Yes, of course they do. I thought this was common knowledge. From what I've seen, airlines typically deal with over-booking by offering passengers free first-class upgrades on a later flight, or other perks to induce people to voluntarily give up their seats.

    I wouldn't be surprised if they *don't* overbook flights at the busiest time of the year, since that's almost a guaranteed money-loser for them, but I have no evidence either way. Has anyone ever experienced overbooked flights at busy holidays, etc? I suppose it's also airline-specific.

    • by _merlin ( 160982 )

      I think it varies with the regulatory environment. Every time I've been at a US airport they've had overbooked flights and asked people to come forward if they can take a later flight, but you don't notice this happening in other parts of the world. Perhaps overbooking is more common in places where there's more "free market" worship allowing the freedom to screw customers harder.

    • Yes, of course they do. I thought this was common knowledge. From what I've seen, airlines typically deal with over-booking by offering passengers free first-class upgrades on a later flight, or other perks to induce people to voluntarily give up their seats.

      I wouldn't be surprised if they *don't* overbook flights at the busiest time of the year, since that's almost a guaranteed money-loser for them, but I have no evidence either way. Has anyone ever experienced overbooked flights at busy holidays, etc? I suppose it's also airline-specific.

      I fly a lot, and the most popular times tend to be overbooked, but not that often. Even when they ask for volunteers it is still a 50/50 chance they need them, based on my experience volunteering. I've even booked popular times just to take the bump and the voucher offering that I can use later. In my experience, weather or a mechanical problem is more likely to result in the airline needing volunteers than overbooking. My record is 4 bumps in a row on a single day when fog canceled all the AM flights. Desp

  • No (Score:5, Funny)

    by JustOK ( 667959 ) on Saturday December 24, 2016 @11:45PM (#53550613) Journal
    They've been under-building their airplanes.
  • Uh... Yeah? (Score:3, Interesting)

    by chaboud ( 231590 ) on Saturday December 24, 2016 @11:49PM (#53550623) Homepage Journal

    This has been standard practice for years. In fact, if you have status on some airlines, you can *always* bump someone else off of any flight with the right ticket type.

    I flew a few times on a United IAD->SFO route, and of four trips, I got involuntarily deferred twice. The second time, I noted to the gate agent that there's always an equipment change that screws up the flight, and she said, I shit you not, "they do it every night so we can give vouchers instead of cutting checks, even though the change is for fewer seats than the flight was overbooked. It sucks every night."

    So, yeah, I gave those vouchers away, because fuck if I'm going to fly United again, even for free.

    • Been boned on the IAD-->SFO route a couple of times with United as well. Now I pay a little more and use another airline. They probably do the same thing, but I don't notice the same free-for-all atmosphere as people are bumped at the last instant like I experienced on United.

      • Re: Uh... Yeah? (Score:2, Informative)

        by Anonymous Coward

        United is truly a hideous airline....in fact most US airlines are. Surly and unhelpful terminal staff, old planes, long waits at airports......awful experience. Having said that, Virgin America isnt too bad except for the awful musical safety demonstration video. At least their planes dont look like the inside of a 40 year old Greyhound bus and the boarding process isnt out of Hunger Games.

    • Please elaborate on how this works, particularly how the equipment change figures into it? I assume if they claim equipment problem/change they only have to hand out vouchers instead of monetary compensation? I'm not familiar with the fine print and not a frequent flier.

      • Re: Uh... Yeah? (Score:4, Interesting)

        by chaboud ( 231590 ) on Sunday December 25, 2016 @04:08AM (#53551091) Homepage Journal

        That's right.

        If they purely overbook a flight and too many people show up, people getting bumped is known as an involuntary deferment. They used to have to cut you a check for the price of your ticket, up to $400. (And still get you there). Now that's been bumped up by the FAA ($800 or something).

        If they have an equipment change that reduces seat count, they don't have to pay out cash. They can instead "compensate" you with credit on their airline that A) may not be spent at all and B) may require that you put more cash in later for an actual purchase. All the while, they get to hang onto the cash that you paid in the first place.

        So the scam is that they schedule your flight (last of the day, for instance) on a plane that they *know* needs mechanical work. They don't do the work, and they "swap" planes at the last minute (to the plane that was *always* going to make that flight). Boom. Instant loophole.

        I actually had these particulars explained to me by a United employee at the gate. She must have been having a shit day.

  • Who the fuck buys a plane ticket and doesn't show up?

    And even on my cheap EasyJet flights I can know my seat number a month in advance. So to overbook they'd have to know exactly who will not show.
    • Re: (Score:2, Funny)

      by Anonymous Coward

      Who the fuck buys a plane ticket and doesn't show up?

      You're trying to tell me you've never met a loose slag in an airport bar, and taken her up to the crew hotel for a quickie, only to wake up 18 hours later with no wallet and no pants? Because the police explained to me this is a very common occurrence indeed, and I had nothing to be embarrassed about.

    • Re:No show? (Score:5, Informative)

      by NormalVisual ( 565491 ) on Sunday December 25, 2016 @12:40AM (#53550737)
      Who the fuck buys a plane ticket and doesn't show up?

      Me, several times. I'd fly out to a customer site to do some work, and usually the return flight was booked the day I expected to be finished, with the expectation I'd drive from the customer site directly to the airport. If the work ran long, and I wasn't where I could call my employer to have them rebook, the seat went unclaimed. My employer would much rather eat the cost of a ticket than have an unhappy customer that's just paid half a million dollars for a new machine + installation.
      • Me, several times. I'd fly out to a customer site to do some work, and usually the return flight was booked the day I expected to be finished, with the expectation I'd drive from the customer site directly to the airport. If the work ran long, and I wasn't where I could call my employer to have them rebook, the seat went unclaimed. My employer would much rather eat the cost of a ticket than have an unhappy customer that's just paid half a million dollars for a new machine + installation.

        It happens a lot in

    • Happens all the time. Meetings get canceled or rescheduled. Incoming leg gets delayed and they misconnect. Also, changes to tickets have the same effect if done in the last week or two when it will be difficult to resell the seat.

    • Me, for one. I was supposed to be bringing a yacht back from far away and saw the flight I needed for peanuts so i booked it. Yacht owner changed his mind so i didn't need the flight.

    • Who the fuck buys a plane ticket and doesn't show up?

      Nearly every flight has no shows. Sometimes they had a change in plans. Sometimes they are just stuck in traffic.

      And even on my cheap EasyJet flights I can know my seat number a month in advance. So to overbook they'd have to know exactly who will not show.

      If you book months in advance, you get assigned a seat. If you book two hours before a flight, you generally don't. You get assigned a seat at the gate. Your seat is someone that didn't show up.

    • Never had a dose of Ghandi's revenge?

  • by Anonymous Coward

    You can demand compensation (As in, hard cash, not a voucher) if you're booted off a flight. Usually at a minimum of 2x the cost of the ticket. They don't like to advertise it for obvious reasons, but I highly recommend it over the vouchers.

  • by Gravis Zero ( 934156 ) on Sunday December 25, 2016 @12:02AM (#53550663)

    What earth-shattering fact are you going to drop on me next, that customer service is insincere when they tell me to have a good day?

    • The person I spoke with sounded very sincere when they told me to a great day.
      Though, due to the very heavy Indian accent, they may have told me I was gay... either way though they sounded sincere.

  • The forecast model is inaccurate if it assumes customers will continue to have the same behavior towards an airline that regularly overbooks flights. I had two incidents with an airline 10 years ago where I got bumped because of overbooking and I just stopped flying with them. I've also told all my friends. The airline I use now is about 15% more expensive and the seats are slightly less comfortable (although that's improving), but I still don't want to risk being bumped off the flight.

    • This always makes me laugh. Almost every airline operates exactly the same way. Every irregular ops flight I'm on, some rare flyer is stomping around saying they will never fly this airline again, as if the other airlines don't have mechanical delays or staff union rules or overbook their flights or get screwed by air traffic control every once in a while. Even when it's weather!

  • I don't like tele-evengelists like Jim Bakker https://en.wikipedia.org/wiki/... [wikipedia.org] But if he went to prison for fraud for overbooking his theme park time-share hotel, why aren't airline execs getting the same treatment?

    • Yes. I'm pretty sure it's illegal to sell the same thing to multiple people, or to otherwise knowingly sell more of a product than you have.
      • Yes. I'm pretty sure it's illegal to sell the same thing to multiple people, or to otherwise knowingly sell more of a product than you have.

        Broadband ISPs do it as a standard practice. I believe it's a corollary of "too big to fail"..."contributes/lobbies too much to prosecute" in both the ISP and airline cases. At least that's the way it is in the US where we have the finest government and legal system money can buy.

        Strat

  • by waspleg ( 316038 ) on Sunday December 25, 2016 @12:06AM (#53550673) Journal

    Source: I worked 8 different hotels in 6 years a long time ago. If they know especially that it's some kind of special event they ALL do it and will also triple the rack (regular) rate sometimes impose a minimum stay too - fuck locals they'll come back another night goes the thinking.

  • by 93 Escort Wagon ( 326346 ) on Sunday December 25, 2016 @12:12AM (#53550681)

    Oh, I understand why airlines overbook. But I just can't grasp why a significant number of people who've paid good money for airline tickets simply don't show up. If I spend several hundred dollars on something, I'm going to make sure I get what I paid for...

    • by Hadlock ( 143607 )

      Here are some fun stories to grasp:

      I missed my flight from Miami to Dallas in ~2005 because I missed the 45 minute checkin time by 2 minutes due to misreading the ticket.

      On an international flight home from Colombia to the United States I missed my flight by ~7 hours because my ~6 hour bus ride from Medellin to Bogota was delayed by 15 hours due to a mudslide that blocked the highway.

      More recently my flight got pushed back one day and screwed up my onward travel from London to Budap

      • by Hadlock ( 143607 )

        Another flight home from Cartagena, I was too hung over in the morning and nearly missed my flight home, but thank god, they held the flight for me by ~15 minutes as I didn't have any checked luggage and Spirit Airlines patiently waited for me to be expedited through security/customs.

        Thursday, I nearly missed my flight from SFO to Dallas because I thought my flight was at 5:45 but really it was 5:25 and also I didn't count on SF traffic to the airport. Thanks to the miracle of online checkin I was a

        • by lgw ( 121541 )

          OK, not to be all "the man", but you should seriously reduce your substance abuse if shit like that is an ongoing problem. Fat drunk and stupid is no way to go through life, or so I'm told.

      • by Hadlock ( 143607 )

        I once bought a bus ticket from Iguazu, Brazil to Rio De Janiro for about $250, went to go see the falls that morning (they're amazing by the way, twice as wide and twice as high and twice as much water as Niagra falls), and the bus driver that takes us back in to town slept through lunch and I got back an hour later than I expected. Worse, I thought the bus started from the Argentinian side, so I had to get an international taxi for $80 to the bus terminal. Got my passport stamped sitting in the back of a

        • by Macdude ( 23507 )

          The Iguazu falls are only 50% wider, average somewhere around 50% taller and have only 73% of the water flow of Niagara Falls.

    • Because out of 100 people, one person will have a family emergency they have to attend to. 2 people will have mis-set their alarm clocks, 5 are first-time travelers and underestimated traffic and security delays. Then there are the business travelers who have a last minute change of agenda, and take a flight at a later time.

    • Meetings run long. They get canceled or rescheduled. People oversleep and need to take a later flight. Or they get in a fight with their girlfriend and take an earlier flight. They misconnect because their first leg was delayed.

      Heck, one time I was was at my gate really early (early enough that there was another flight at the gate before mine), working on my laptop until my flight. And I missed my flight at the very gate I'm sitting in because my laptop clock was in a different time zone and I was so focuse

    • by rgmoore ( 133276 )

      One reason people miss their flights is because they have busy, unpredictable schedules. They may be doing something like business negotiations that don't run on a nice schedule; they're finished when everybody agrees on terms. For someone like that, it's more convenient either to book multiple flights and then take whichever one works out or to pay the full, non-refundable fare that lets them keep changing their flight so they can push it back one day at a time. FWIW, this kind of thing is why there ar

    • But I just can't grasp why a significant number of people who've paid good money for airline tickets simply don't show up. If I spend several hundred dollars on something, I'm going to make sure I get what I paid for...

      I see you don't fly much.

    • Business travelers change their flights all of the time. If it wasn't for overbooking this would be prohibitively expensive. Meeting runs late, you call the airline, pay your change fee, and carry on. Also many business travelers don't know when they are going to be done their last meeting so they leave plenty of time and book the last flight of the night. Then when business is done, they show up at the airport and ask to get put on the next flight. For vacation-grade tickets, if you're going to miss y
    • by tlhIngan ( 30335 )

      Oh, I understand why airlines overbook. But I just can't grasp why a significant number of people who've paid good money for airline tickets simply don't show up. If I spend several hundred dollars on something, I'm going to make sure I get what I paid for...

      1) Missed connections. This happens way more often than you think - either the connection is impossible, delays, or longer than normal flight can easily cause a connection to be missed.

      2) Cheap seats - a lot of these are non-refundable, and non-flexible

    • Sometime airlines effectively encourage people not to turn up. Example: A few years ago when my wife moved to live with me she needed to book a single ticket (i.e. not a return). She quickly discovered that a return cost less than a single (something which I think is common, but still mystifies me). So, she bought a return ticket and simply didn't turn up for the return flight. So, she was a no-show and it was effectively all the airlines doing.
  • Is this April Fools? (Score:4, Interesting)

    by mattwarden ( 699984 ) on Sunday December 25, 2016 @12:29AM (#53550715)

    This is not an open question and the answer is not news. Of course they overbook their flights, and you should be happy they do. Unused seats are inefficient and result in higher ticket prices. If x% don't show up to a given route, then the airline should oversell up to x% depending on the VDB cost (e.g. "500 Delta dollars") and the cost of the fare.

    Most passengers have their tickets heavily subsidized by price insensitive passengers (e.g. Business travelers). If you're reading an article claiming that your average passenger is "getting screwed", you can be sure the author has no idea what he or she is talking about.

  • Have seen people access flight loads from employee databases on several major airlines. They always overbook a few seats, it shows right up in the system for all employees and pass riders to see on each system. And yes, it is actually uncommon for everyone to make the flight when it's booked as there are always a few random problems in any large group.
    • not quite forever. Just since the 80s, when AA developed this.
      And there was a vastly different reason for it back then. Basically, the airlines had ppl pranking them by booking 20-30 more seats so that they could be guaranteed getting on with standby.
      • What you are talking about are double-reservations which only worked if people had refundable tickets. This got cracked down on but it's unrelated to over-booking. Over-booking exists because it allows the airlines to accommodate passengers with extenuating circumstances as well as business travelers who need some schedule flexibility. It is very rare that people get bumped from a flight. Many people love to volunteer to take a later flight in exchange for compensation. On Southwest, I'll do it just ab
        • Re: (Score:2, Interesting)

          by swb ( 14022 )

          Many people love to volunteer to take a later flight in exchange for compensation.

          I get why airlines overbook from an operational standpoint, but this volunteering to take a later flight part is what mystifies me. Vacations are only so long, hotel rooms are paid for, activities with inflexible schedules are planned, someone's changed their plans to provide destination end transport, and so on.

          While I'm pretty sure this is mostly my biases, I can't even begin to imagine sitting at the airport thinking "No problem, I'd love to get to my destination 8-24 hours later, because I'm not lookin

          • by lgw ( 121541 )

            It used t be that you could plan on certain plights being overbooks, so some people did just that. These days, the airlines are counting on WalMart shoppers on vacation - be a few hours late for $200 in cash, sure thing! (Any time the flight is seriously overbooked, the airline does a reverse auction for a cash payout - they only need to find the cheapest people on the flight.)

            • by swb ( 14022 )

              For me, psychologically at least, there's not really any realistic amount of money that would offset the delay.

              It would literally require them telling me they were transferring me to the private aviation terminal to be flown on a private jet to go along with it, or whatever the cash equivalent of that is.

  • by ATMAvatar ( 648864 ) on Sunday December 25, 2016 @12:41AM (#53550741) Journal
    Next you're going to try and convince me that ISPs oversell bandwidth, hardware stores don't actually give me boards that measure 2"x4" in the cross section, that hard-drive manufacturers don't label drives as their formatted capacity, and printer cartridges don't let you utilize 100% of the ink inside.
  • by WindBourne ( 631190 ) on Sunday December 25, 2016 @12:50AM (#53550765) Journal
    Bob Crandall of American Airlines started this because so many ppl would actually call in with false reservations so that they could fly standby. That kills the load factor. So, was AA's CIO that really created the hub/spoke system, along with dynamic pricing and slightly overbooked seats. Note that when overbooked, somebody gets nice things.

    Sadly, the western based airlines are now a disaster due to de-regulations combined with MBAs that do not have an original thought. Worse, because the CEOs now have stock in the airlines, it is in their best interest to look at short-term stock value and not at long-term profits. Crandall REFUSED to have publicly traded stock to any executive when there. AA became the best. Once he left, the execs that took over ran AA into the ground.
    • Sadly, the western based airlines are now a disaster due to de-regulations combined with MBAs that do not have an original thought.

      Deregulation was the major cause as it changed how airlines competed for passengers. When the CAB set fares and awarded routes, airlines were assured of a profit and competed on service, not price because everyone's price was the same. Deregulation change that model to one where price became the major determinants of demand, so airlines started to cut costs to stay competitive and service went out the door. Suddenly, routes that were only profitable because the CAB set fares became unprofitable and cities l

  • by Sun ( 104778 ) on Sunday December 25, 2016 @02:01AM (#53550913) Homepage

    That is pure misinformation. What does happen is that 50,000 passengers a year get an offer to fly at a later flight for compensation, and they accept that offer!

    The number of people who don't fly on a flight for which they have a confirmed ticket without their consent is near zero.

    Shachar

  • Of course they are intentionally overbooking flights, based on statistical analysis of what percentage of people who book a flight don't show up for it, and actually data of what it costs them to bump people off flights.

So you think that money is the root of all evil. Have you ever asked what is the root of money? -- Ayn Rand

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