IMHO it would be easier to simply forbid airlines from selling more than 100% of seats on a plane. If it means that several seats go un-filled each flight because of no-shows, so be it, have the airlines eat the cost. The passengers next to the empty seats will get to have some extra room.
I suspect that this will lead to higher prices for each seat. At that point, it becomes simple math - cost to fly this route / number of seats = how much each seat costs.
And ending overbooking wouldn’t necessarily stop that. JetBlue doesn’t overbook, but still has to bump passengers sometimes. Indeed, they deny boarding involuntarily at a rate that’s higher than the average.
But they may, which was my point.
You’re both confusing cost and price.
The cost of a seat is the expense necessary to move it from A to B. The price of a seat is whatever the airline can convince a customer to pay. Or said another way, it’s whatever the customers choose to pay; they’re certainly free to not buy anything that doesn’t look like a good enough deal from their POV.
The aggregate cost of all seats over several years sets a floor under the aggregate price of all those seats. Get that backwards long enough and bankruptcy looms. But that says just about exactly zero about the cost vs. price of any given seat on any given day between any two given places.
And all of this is equally true for every buyer and seller in every industry and every marketplace; there’s nothing airline-unique about any of this.
Lots of people seem to get confused and think price is some direct function of cost. It may well have been back in a 1700s economy. It sure isn’t today for pretty much anything and everything you or anyone else, including other businesses, buy.
Exactly what problem are we seeking to solve, here? If a plane is overbooked but then has the expected number of no-shows, then nobody has to be bumped and there’s no problem. If a plane is overbooked and more people show up than are expected, then the airline offers someone a voucher to accept a different flight, someone in the crowd decides it’s a good deal, the airline still makes a profit, and someone gets a deal they consider good on their next flight, and there’s still no problem. The only time there’s a problem is when either the airline offers the maximum compensation they can while still remaining profitable and absolutely nobody takes the offer (which is so incredibly rare that you’re not going to hear of any examples of it), or (as happened here) the airline stupidly offers a compensation that’s too low before involuntarily bumping someone. And that last problem is really easy to prevent by the bad publicity that will result from the incident, which is why it’s so rare that it was newsworthy when it happened.
I agree. It is never good for Congress or any administrative body to take a knee jerk reaction and start changing things because of an event that is unlikely to ever happen again.
I just read a study on the average profit per airline ticket sold in the US. I hadn’t a clue as to what this number would be. Does anyone want to take a guess?
A quick google gives me numbers from a bit under $4, to a bit over $8.
Sounds about right. Gives them a 1-3% profit margin. About the same for most industries.
They could charge more, but then people would go to the airlines that are charging less. That’s just how the market works.
Ok here’s what I have never understood about overbooking. Every time I have ever flown, I’ve looked at the seating chart when booking, seen which seats were available, and selected an empty one. Afterwards if I look at the chart, the seat I booked now says unavailable. So how does a seat get sold twice?
That’s literally the exact opposite of a guess. :mad:
Sorry, I didn’t take you quite literally enough there.
My first thought was somewhere in the $5-10 range.
This is why I drive everywhere. Or stay home.
I am Sparticus!
Read post #35. Picking out a seat is NOT a necessary part of buying a ticket. Picking out a seat is an *optional *part of making a reservation.
You can buy a ticket and never pick a seat or make a reservation.
The most common way to buy discount tickets does all three steps at once. So it’s understandable you might have thought they’re all different aspects of the same transaction. They’re not.
All three steps are necessary before you can get down the jetbridge onto the airplane. But the reservation and the seat assignment can be done at the gate a minute before boarding.
I’m not. The cost is what I said. The price would be something OVER that amount.
I agree with your critique of OP plan, which is without merit. And it’s true the problems of modern air travel are complicated and without a single simple solution.
However, the solution to the infamous incident which spawned all these threads is in fact simple. You can avoid having to randomly choose passengers to kick off overbooked flights by simply continuing the auction to find volunteers to deplane until you have enough. There is no logic in limiting the amount offered. UAL and other airlines now seem to realize the illogical nature of doing so. It’s not in their interest either. It would only work to very, very slightly reduce costs under the assumption you could bully people off planes by waving the flag of ‘safety lives at stake’ etc or enlist the govt’s monopoly on the sanctioned use of violence to do it for you, and it would never blow back on you. Once you realize it will eventually blow right up in your face, the added cost of very rarely having to pay perhaps $1-$2k (real money equivalent) a head to get enough volunteers is totally negligible in comparison.
And what’s the ‘overbooking problem’ if everyone bumped walks away with compensation they freely chose? I don’t see one.
If you buy a ticket and most (all?) of the seats have been picked, you won’t get the option to select a seat. When you check in, they’ll give you a seat if one is available, or tell you to see the agent at the gate counter, where you might get a seat assigned, or you might be first in line to get bumped.
Two comments:
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This solution is simple, but it’s only a single part of a complicated system. It’s layered on top of the existing complicated logistics rules. A small part of a complicated system might look simple, but it’s still a complicated system.
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I’m not actually sure that the solution you offered actually covers all cases. What happens if the people on the flight collude to raise the booking fee to unreasonable amounts?
You might not think that will happen, but if the law, which currently sets a statutory maximum required compensation instead required a reverse auction of seats, I guarantee you some people would try to figure out how to book all the tickets on a given flight and hold out to absurd levels.
What if the market price is absurdly high? Here I’m imagining some kind of massive event that causes lots of flights to be canceled, but in a way that’s still covered by this rule (so, not weather). Presumably the airline is already hurting massively due to whatever unforeseen event caused massive failures. It’s not clear to me that it’s a generally good idea for society to also make them pay out really high cancellation fees.
Think about this for any other business. If you accept a job from someone and can’t do it, it’s reasonable to pay some damages for their loss/inconvenience whatever in not having the job done. It’s probably not reasonable to pay whatever they think they are owed in damages.
Here’s the solution I think we should use: Airlines already have like six interstitial screens when buying a ticket to see if you want to pay extra for more miles, for more legroom, for trip insurance, for priority whatever. Just add another one that lets people pay for bump insurance!
I’m only sort of joking.
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The suggestion is simple, but that particular problem, bullying people off planes because you won’t offer more than very paltry sums to get volunteers, is simple. All the perceived problems of the airline system collectively are not simple.
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Collusion via one entity buying all the tickets in the first place is the only valid point there, with due respect IMO. If there’s a chance of ‘absurdly high’ market prices in competition we should also have price limits on tickets, and on everything else we buy.
The collusion point would easily be covered by the fact that a) realistically airlines are going to set some limit* and b) making collusion illegal, as it is in various other of the myriad cases each of us encounter every single day in every sphere of our lives, where prices are set by supply and demand without statutory limits.
The point about society’s interest v. very high cancellation fees is fatally flawed by the lack of reasonable basis to think the fees would ever be very high again except in case of block ticket buying (passengers all colluding on the fly: non-plausible), or some kickback scheme involving airline employees holding non-auctions, or some other illegal acts.
*like Delta saying they’d offer up to $10k. Even at that level the limit will virtually never come into play in a competitive auction. It’s a fairly normal cross section of people on planes, many wondering how they are going to pay the mortgage and credit card bill this month, but none of them will volunteer for $10k (or $2k) to be delayed, when in fact the few $100 of vouchers is enough like 90% of the time as it is? That’s just not a plausible line of argument IMO.
So we should all have to pay more for flights?
Because they literally tell you up front exactly what they’re doing and exactly what it is you’re purchasing, which makes it the exact fucking opposite of fraud.
Except that in most cases, the terms of the ticket they’ve sold make them contractually obligated to refund (either in cash or in the form of credit towards a future purchase) at least a portion of the fare paid for the missed seat.
Which I like, because it means that if I miss a flight because of traffic or breakdown, I’m not completely out everything I paid.
On the whole, overbooking is good for the consumer–or, at the very least, better than what we’d have if it were forbidden. You really haven’t thought this through, at all.
How often do people actually get bumped due to overbooking specifically? Are there any statistics kept on that? The government publishes figures on denials of boarding, but that includes when the airline needs to remove people to make room for crew needs, because of weight restrictions, because a smaller plane was substituted, etc. Banning overbooking wouldn’t get rid of any of that.