Overbooking means that it’s possible that the consumer will not be able to take a flight. That’s not good for the consumer.
Refunds are not a function of overbooking, as you can get refunds up to a certain point for pretty much any service. After that, you’re on the hook for the bill, except in situations where you can try to sell your ticket or such.
And I don’t actually believe prices would change all that much. Airlines already charge differently based on numerous factors that have nothing to do with the actual costs to them. Even using two different web browsers can get you different ticket prices.
And airlines already lose money any time they have to buy someone out. Getting rid of overbooking means no buyouts, which reduces costs.
If, as people seem to say, getting kicked of flights is so rare, that means they don’t have all that much of a problem anyways. They could probably easily make up for it by allowing reserve seating and doing what most concerts do–allow you to pay more at the gate if there are seats open.
Maybe this won’t work, but overbooking surely is not the only solution. If so, it would be used in more industries than this one.
A cheaper flight + the ability to get at least a partial refund if the shit hits the fan for whatever reason is, on the whole, worth the exceedingly small chance that my ticket will be cancelled by the airline.
Airlines have no incentive to give you a refund for matters within your control (or at least outside of their own control) unless they can sell that seat to someone else. And if the things that cause you not to fly happen at the last minute, they don’t have a lot of opportunities to sell that seat to someone else unless they’ve already oversold ahead of time.
Yes. And they’d be even higher with the downward pressure on revenue that ending oversells would create.
They’ve optimized the shit out of their inventory-management algorithms so that, on the whole, they make more money than they would if they didn’t overbook. In rare cases they have to offer extra compensation because the predictions didn’t work out on a specific flight, but that’s more than outweighed by the extra revenue they generate by being able to fill every seat on nearly every flight via overbooking.
The fact that it’s rare doesn’t mean that they have a problem–it means that, through the use of optimized overselling, they’re incredibly fucking good at managing it, so that the number of oversells is almost always incredibly close to the number of people who don’t show up.
For most people, taking a trip requires a lot more advanced planning then going to a concert for a few hours.
I disagree. A limit on damages in extreme circumstances that make a contract unfulfillable is actually quite common, and does not imply price limits on all goods.
Well, sure. But notice that the simple solution is no longer quite so simple. It created additional loopholes that have to be plugged. What might be the unintended consequences of this additional fix?
The point is that you can’t fix complicated systems with simple rules that you thought up after brief consideration.
I think you’re suffering from a lack of imagination. What about a software bug that accidentally sells 10k seats for a single flight? What about a natural disaster somewhere that means we really ought to use the planes for another purpose.
Saying we shouldn’t have any limits because you can’t think of any reasonable case where they’d be hit is completely backwards. That’s exactly why we should have limits. The no-limit policy is identical to the sufficiently-high limit policy except in weird cases that no one saw coming. It’s setting up the mother of all Black Swans.
It seems obvious to me that the socially-maximizing limit is somewhere well above the current statutory limit, where they get no volunteers from a flight full of people who are just trying to get somewhere.
It seems very unlikely to me that the socially-maximizing policy is no limit whatsoever.
Infinite liability is a nice clean concept, but it’s got some wicked edge cases.
It’s awesome that Delta offered $10k. In any normal circumstance, they’ll never go nearly that high. In some weird-ass-no-one-anticipated-this circumstance, they can afford the $10k hit. If they had pledged a limit up to $1m, I’d be wondering what their CEO was smoking.
