Originally Posted by
Gauges and Dials
For some grossly oversimplified numbers:
100 seat airplane. $100 per ticket. 5% oversell. $10,500 in revenue for the flight. 99.5% of the time, nobody gets bumped. 0.5% of the time, airline offers $200 and gets a volunteer. $10,400 on average net revenue for the flight.
Forbid overbooking. Now there's only $10,000 revenue for the flight. That $400 is coming out of the pockets of either the shareholders or the passengers. The airline has the pricing power, so the 4% is coming out of the passenger's pocket.
Given my own personal history (I've never been involuntarily bumped, and I've been delighted to volunteer in return for a $500 voucher when my schedule permitted), I'm unwilling to pay an extra 4% for my ticket to eliminate the practice of overbooking.
I'm also Ok with the practice of over-booking and voluntary compensation. The customer can make a choice that is market driven. When a lottery is held for involuntary "re-accommodation" the amount IMHO needs to be much larger. It can easily cost me (or my employer) far more than the $800 voucher (I also contend the voucher is inadequate in any amount) if I don't make it to my destination on time. If I lose this money due to Force Majure that is one thing. To do so because of someone I've contracted with to provide me with transportation has reneged on their end of the contract is not the same. In that case the payment must be proportional to the damage.
Last edited by Piper_Driver; 13th Apr 2017 at 18:54.