I read a story about how Southwest was just fined for bumping passenger. A passage in the article confused me:
Correct me if I’m wrong, but most people don’t buy seats at the counter an hour before the flight, right? I have always bought my tickets weeks in advance. How does me no-showing, and still having paid, cost the airlines money?
Exactly. Which means if someone cancels before the flight (as they allow people to do), there may not be people showing up at the last minute to take the seat.
Most no-shows get their fare refunded. If you buy the seat six months in advance, but then cancel three days before the flight, you get your money back, and the airline has three days to sell the seat – but if most people are like you, they aren’t buying that near to the flight.
I think that’s more “they don’t make extra money” not “they lose money”
to the OP
the “theory” of overbooking is that, if they do it properly, they can maximize revenue per flight while minimally inconveniencing the bumped passengers, which, in a competitive market, would enable them to use that profit to reduce prices thus benefiting the consumer. that phrase is extremely unartful.
Lets say you buy a non-refundable ticket from Philly to Las Vegas for $300 and don’t show, most airlines give you credit for the amount of your ticket less a change fee. (A couple of the discounters give you bupkes if you don’t show.) Southwest gives you the full $300 to use on another flight.
Southwest also has a “flat tire rule” If a you are late and show up within two hours if your flight, they will reaccomodate you if there is room on the next flight.
Most people don’t buy tickets very close to the flight. But you would be surprised how many do. I have had to do it before. Airlines can rake those people over the coals. SWA would hit you for about $900 for that flight.
So if you bail and take your $300 to use later, SWA is out a potential $900 if someone shows up last minute.
I quite enjoy getting bump credits. I have had lots of free flights out of it.
Lots of businesses oversell, resturants overbook, hotels overbook, even my temp agency overbooks. Yes, that’s right. I show up and you can be sent home, because the factory where they sent me has to have 100 workers, not 99 not 98 but 100. And if someone doesn’t show up, which is very common in temp work, the agency will get axed by the factory. So they routinely schedule 105 or so and send a few home each night. They pay you for an hour of work and your bus (or gasoline) fare, if they send you home.
A flight needs to operate at 100% to make the MOST money. Stockholders want the MOST money not a profit, thus overbooking is part of the airline market. It’s not like there is another plane every 10 minutes as in a subway or bus.
Arlines use revenue management with complex algorithms to base future patterns on historical patterns and it usually works out OK but there will be glitches, sometimes big ones if people just sit back and let the computer do its thing without looking that the pattern still holds true.
With airlines that don’t offer refunds, I’ve wondered if I could force them to leave my seat empty. I paid for it. I’m not getting a refund, therefore that seat is mine for the duration of the flight, whether or not my butt is sitting in it. And please mail me my packet of crackers and a can of soda.
JetBlue does not overbook its flights. They sell both refundable (fully refundable, back to your original FOP) and non-refundable (cancel for a $100 fee, remainder becomes a credit) tickets.
I can’t see that being upheld in court at all. You aren’t paying for a seat; you’re paying for transportation. The airline is offering you transportation. If you’re not there to take them up on it, you have no seat to be held empty. Most airlines make it pretty clear in the T&C that no-showing for your flight is regarded as a forfeiture of fare.
That’s because fare refundability and overbooking are two completely separate parts of Airline fares.
it’s a selling point for them, that’s why they (make a point of) it.
anyways, “low cost” airlines don’t have as much of a need (or an opportunity) to overbook - overbooking is mainly a feature of main-line carriers who have significant business travelers (and businesses paying for their tickets). more than likely, it is business travelers who will need to fly last second, and it is business travelers who will not be flying at the last second. for airlines which cater to tourist/personal travelers, they may not be able to extract as much “overbooking revenue” because most tourist/personal travelers have very solid travel plans at the time they buy the ticket.
The defunct Independence Airlines offer exactly this. They had low fares so I booked a trip online, DC to Vegas for like $220, as opposed to an average of maybe $300, $350 on a major airline.
Well, I made a dumb mistake. I wanted to catch a red-eye back to DC on Sunday night, to be back at work Monday morning. Well, I booked a 12:05am Sunday flight, instead of a 12:05am Monday flight.
The ticket agents informed me that I had missed my flight by 24 hrs, and they would not rebook me. But they offered to sell me a return ticket for $1,200. I found another one way fare that night, for like $500. So, a dumb mistake cost me a lot of money.
Airlines have their different menus of service. Low cost airlines have an advantage over the legacy carriers.
Some people fly Southwest because they like getting two checked bags free and $0 change fees. They might not mind unassigned seats. And Southwest overbooks like mad to capture that walk-up revenue. They always have.
Others fly JetBlue because they want an assigned seat/onboard entertainment/ no overbooking. They don’t mind getting only one checked bag free and paying $100 if they need to change. When they raised that fee some of their customers had a complete meltdown, but they needed to raise revenue.
Why do legacy carriers have to charge all the fees and overbook? Because their costs are higher and they really got caught with their pants down when fuel costs spiked. But then again, if I have to get from Philly to Dayton, my choices are pretty limited. I can fly US Air non stop, I can drive to Baltimore and take Airtran or I can flight Southwest via Chicago to Columbus and drive to Dayton.