United Airlines piloting technology to manage the problem of oversold flights

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United Airlines Inc. is quietly unveiling a new technology platform that it will use to manage the problem of oversold flights—and, in the same breath, turn them into a profit opportunity.

With the help of its new Flex-Schedule Program, the airline is piloting a way to buck the trend of involuntary bumping—the term for kicking passengers off oversold flights—without necessarily offering four-figure payouts to passengers at the gate, or curbing their practice of overselling inventory. (The airline suffered a publicity black eye earlier this year when police dragged a man off an overbooked plane, and has since promised to offer high-price rewards to fliers who agree to change flights at the last minute.)

Instead, it’ll simply offer buyouts earlier—up to five days in advance. The upside for United? The chance to resell your ticket at a wider profit margin.

Generally speaking, United Wants to Sell Your Seat to Someone Else for More Money
If you’ve bought a seat on a flight that’s overbooked, the airline may try to resell your spot for a higher price. But don’t freak out yet: There’s an upside for passengers, too.

 

If you ever wondered what happened to Adioso, well, here's part of the answer. The company took the insights and technology assets it had developed for the consumer market and turned them into enterprise services to offer to airlines, and that has been the focus for the past 3-4 years.

As evidenced by this breakthrough, it has turned out to be a very good move.

The original Adioso product still exists but in a different entity, and its current status is best described as side-project. I'm still optimistic that the original vision we had for Adioso as a consumer product will be realised, but it will end up looking very different to what it's been to date.

In the meantime, it's extremely pleasing to see Volantio making such an impact.

Given you know the market well, how would you find a cheap destination given two different places of departure?
For example, you live in country A and your special someone lives in country B, and you want to list countries C and airports in order of smallest sum of two return tickets.

Is there an api that flight search websites use, which you can get access to? Or are there already websites offering such a feature?

Because on every flight, a certain percentage of people don't show up, and certain number of passengers are on "flexible" tickets, that can be transferred to a different flight even very soon before departure.
By overbooking, the airline can ensure that all seats are occupied, which means more people get to their destinations when they want to, and the cost-per-passenger is lower (as fares don't have to include the overhead cost of empty seats).

Most of the time their forecasts are accurate and the system works well for everyone. But occasionally their combination of forecasting, incentives to transfer and customer service practices go wrong, resulting in the horrible incidents we've heard so much about.

In the USA, nearly all airfares are changeable, even those that are sold as "non-changeable". In Europe, that's different -- the lowest fare class is often "use it or lose it", with the ticket becoming worthless if you don't get on the flight you booked. If you want to stop airlines from overbooking, then you need to stop travelers from changing their plans and leaving seats empty on the plane.
You can talk about overbooking as "profit motive" for the airline, but airlines traditionally make very low margins. Air travel is a classic oligopoly, where a large number of competitors offer goods that are practically indistinguishable (Coke vs. Pepsi, Shell vs. Exxon, United vs. Delta) -- these industries are characterized by fierce price competition. Ultimately, any decrease in revenue from one source will be reflected in higher average ticket prices.

An airline industry that didn't overbook would be one where either everyone pays significantly more for their tickets, or where most tickets become truly non-changeable, as in you have to buy a totally new ticket if you change your travel date or time.

Honestly, a system like this, where the airline can do yield management transparently, days or weeks before departure, when people have time to weigh their options and make alternate plans, makes tremendous sense and does a lot to allocate costs to those who are willing to pay, keeping things less expensive for those who aren't.

What are you talking about? Every US ticket I've bought has been non-refundable. I even tried notifying one that I wouldn't be using it as a courtesy and they were like "why are you calling? You can't get a refund and we don't care that you're not coming."
And of course there's a middle ground: being upfront about which seats are really reserved, and what you can expect for not-really-reserved seats on overbooking. None of this "oh you should have done research to realize what your rights and minimumn payment are and that this voucher is worthless".

Eliminating overbooking is overkill and some people are in fact confused on that matter. But please don't pretend the only alternative is some apocalypse.

I don't know which tickets you are buying, but I fly ~ 150,000 miles per year, all on non-refundable tickets. I change my plans ALL THE TIME, and those tickets are always credited to my account. I have to re-use them within 12 months, and the airline deducts a change fee from the value before making the deposit.
My work travel system even has a built-in tracking and reminder system for ticket vouchers that will nudge me to fly on a particular airline if I have a credit with them.

And, I will say this -- in nearly all situations, if an airline thinks they may need to involuntarily bump you, they won't assign you a seat. Once you have picked a seat on their reservation system, you have a very low chance of being bumped involuntarily. Once you have a boarding pass with a seat number on it, I'd guess that the odds are 100,000:1 that you're not going to get on board (unless you volunteer to take a voucher). All the more reason that the infamous United dragging incident was some kind of anti-unicorn (which wasn't about over-sold seats, after all -- it was about needing to accommodate a non-revenue flight crew).

The reasoning is that some people cancel their reservations, so if you have a good statistic for how often that happens you can overbook to take up the slack and still have a full plane. Airliner margins are pretty thin, so they jump at opportunities to avoid "waste" like this.
Scammy? Ehhh. People get way more than their money back for switching flights, which I consider enough to make it un-scammy. Others might reasonably disagree.

To be more accurate: It's less about cancelled reservations, but mostly about no-shows.
People buying full-fare tickets don't incur a penalty if they just don't show up for the flight. Most tickets, nowadays are anyway non-cancellable (except, sometimes for a hefty fee) and non-refundable.

At times the flight from Tel Aviv to Zurich could be overbooked by as muchas 60 seats. I know this because my sister worked at (now defunct) Swissair.

Personally I don't feel this to be a scammy concept, provided that the airline

- Rebooks you onto the next available flight. If necessary with a competitor and

- Compensates fairly and in cash and coughs up for hotel acommodation, transportation and food if necessary

Sometimes people miss flights, or last minute cancel, for various reasons. If past statistics show the every 200 seats plane has 10 no-show passengers at departure on average, you can sell 210 tickets in average and depart with every seat occupied. Hotels do it too, and many more industries.

 

I used to work front desk for a hotel and we never oversold our capacity. In fact, we would normally block a few of our rooms from being able to be reserved in case of unexpected maintenance issues. If no maintenance issues arose we would sell those rooms to walk-ins.
I can't imagine working someplace where, as a matter of course, people with reservations are turned away due to overbooking. It's likely that such a place would not last very long either, because as soon as people read TripAdvisor reviews about how your property doesn't honor its reservations they will stay elsewhere.

Hotels routinely oversell capacity - when this happens they just walk customers to comparable hotel nearby. Not sure why hotel you worked in did not do it.

Unfortunately this is _not_ what airlines do. They work very hard to book you on one of _their_ next available flights. I think that by law they should be required to book you on the next available flight by any airline in any class and additionally pay fines depending upon how long the passenger is delayed. They should also be required to make their best effort to find the available seats for the passenger.

What you're asking for already exists pretty much in the US under DoT regulations.
If you are removed involuntarily (not asked to switch for a certificate) you're entitled to up to 400% of your one way fare up to $1350 cash in hand on top rebooking you, depending how long you got held up. [1] Theyre also required to show you your rights on paper in that situation. It almost never happens because there's a huge incentive for them not to do this to you.

And if you think that's rough check out EC 261/2004 [2] and that applies even in the case or a mechanical issue.

[1] https://www.law.cornell.edu/cfr/text/14/250.5

[2] http://www.thisismoney.co.uk/money/holidays/article-2271213/How-claim-EU-flight-delay-compensation-EC-261-2004.html

I think hotels have cut back drastically on this, now that most reservations are guaranteed with a credit card. At some magic hour, say 5PM, they charge everyone's credit card for the night whether they checked in or not. For most of the reservations I've made in the past year, the cancellation period is actually one day prior to arrival.
In years of business travel, where I frequently arrive at the hotel at midnight, I've only been walked three times. Once at a trade show, where the hotel was renovating and didn't get the rooms done on schedule. Second, where a guest got ill and was unable to depart on schedule. Third, on a trip to New York, where they walked me to a sister property located literally across the street (I got the feeling that these two hotels frequently traded guests).

Airlines are different: people typically visit web sites to compare prices, not service.
I think you'll find hotels targeting backpackers overbook, too (if they allow reservations, at all)

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