Originally Posted by
oldpax
Can someone explain why if a flight is overbooked and volunteers are asked to leave that flight for a monetary gain why it is so important?I mean are there people waiting at check in who "just"have to be on that flight?I have just read an article where"Delta "are increasing the amount of inducement?!!!Surely the airline is the loser here?
No. The root of it is that if a department store is selling televisions and they have a sales target but don't sell them all, they can always come back and try and sell them tomorrow... the TV boxes aren't going to go rotten like an apple if they don't get sold by certain date.
An airline seat however is highly perishable. Once the doors close and the aircraft departs the opportunity to sell the empty seats has gone forever.
So, governments have tolerated the practice as it is designed to ensure that the aircraft departs full or as close to full as possible.
The generally good airlines use fairly sophisticated software to predict based on previous results and time of year, even day of week/month how many people are likely to not turn up... they also factor in special events and ameliorate the sales profile/inventory during those periods. I believe QF only oversell to maximise load, they don't do it over the top like a lot of carriers do but their software is extremely sophisticated so it's pretty rare that it doesn't pan out.
As I say, governments around the world allow the practice as long as there is a compensatory payment scheme in place.
My experience is that if you manage the process well and seek volunteers it's almost unheard of to have someone left behind who didn't want to stay behind.
As the industry has got more and more competitive and the margins get thinner and thinner on most routes, the public also demands lower fares so it's almost impossible to meet the target without doing something like overselling to make sure the maximum yield is drawn from the aircraft.
It does work very well for the airlines... the basis of the rule is that you pay nothing if you get the pax to their destination within 4 hours of the originally scheduled time if it's involuntary denied boarding. But airlines have expanded that to include much more generous compensation, fact being so what if they pay out $500 each to backpackers who were happy to go on a later flight, have a hotel room overnight and 3 meals plus a guaranteed seat the next day... when you add up that cost, it is a fraction of what the airline makes by filling the aircraft.