View Full Version : LoCo overbooking
Alsacienne
28th Nov 2017, 21:39
What percentage of seats over capacity are offered for sale? How are no-show ratios calculated?
Yesterday was the first time that I came across this in practice, with no no-shows, an over-full aircraft and a stampede of passengers prepared to accept generous compensation, hotel and meal payments and the first flight the next day.
Many were called ... but I don't think more than two were chosen!
Information would be welcome! Many thanks in advance!
Hartington
28th Nov 2017, 21:47
The calculation of how many to overbook isn't a simple formula. Each flight has a different profile. The same flight on different days of the week can have a different profile. A football game can affect the profile. It's a surprisingly complex yet accurate science (as you can attest this being your first experience).
In the beginning, the locos didn't overbook. They had been paid for the seat, only loss was any on-board sales and perhaps baggage charges.
Then they discovered they were leaving passengers behind who would have paid last minute prices for those seats, and buy on board and perhaps baggage charges.
Mega-investments in revenue management software to produce perfect results. As with network airlines they do get it wrong every once in a while.
In principle I agree it is a pity to let a seat go empty, but the industry needs to get better at solving these problems before the paxs get to the gate. E-mail or text auctions, for example, 12 hours before the flight.
Groundloop
29th Nov 2017, 14:37
In principle I agree it is a pity to let a seat go empty, but the industry needs to get better at solving these problems before the paxs get to the gate. E-mail or text auctions, for example, 12 hours before the flight.
But 12 hours before the flight they do not have a clue as to how many no-shows - if any!
Groundloop, they should. Data mining of flights actually oversold should give them a wealth of information. But to leave it to ground staff to solve these problems at the gate is not how they should be handling these situations.
Hotel Tango
29th Nov 2017, 18:59
ExXB, you are a well traveled person and you should know that what you are proposing is just not workable. There are many unexpected reasons for no-shows. The situation can change by the hour if not by the minute. It can come down to an accident closing the road into the airport or an ATC computer failure delaying inbound connecting flights for instance. Not all no-shows are a deliberate act by the would be passenger. Now back in the old days business travelers were guilty of making multiple bookings only to fly on one of them. That was one of the major no-show problems then. I'm not convinced that the no-show problem today is as excessive and deliberate.
Nightstop
29th Nov 2017, 20:57
Today, I flew with FR from Spain to the UK. Flight overbooked by 6. I checked in online at STD - 4 hours and received a Boarding Pass with seat 00 allocated i.e. SBY at Gate (SAG). Gate agent didn’t spot that I hadn’t got a seat, until I mentioned it. No idea if the other 5 got on board or not, but I did.
While airlines will never be able to get it perfect every time I still think that more can be done. The revenue management systems that manage overbooking are prioritised to make money, not to minimise passenger inconvenience. If they aimed for a 99% load factor, rather than 100% (for example) there would be fewer gate negotiations.
They should have a very good idea of what flights are going to be in danger of spilling passengers. Making offers 24/12/8 hours out, with small incentives, could shift passengers to less full flights. There actually are some customers that would like to change but are put off by the charges for doing so.
The gate experience is the worst part of the journey, IMHO, some clear thinking could improve this immensely.
Johnny F@rt Pants
30th Nov 2017, 13:00
Why does this have to be about LoCo, the legacy carriers were the first to do this after all. Also, not all LoCo carriers overbook, the airline that I work for doesn't.:ok:
Laarbruch72
30th Nov 2017, 13:12
Absolutely Johnny, BA are particularly bad for it and on certain routes (LHR to CDG being a notably bad one) it's virtually routine to be overbooked and yet under subscibed when it comes to volunteers to offload! It's by no means a LoCo thing, fashionable as it might be to imply that.
My comments were primarily about all airlines, not just locos. The network airlines have been doing it for much longer, so have more experience with it.
JFP - I think your employer is missing an opportunity. On any fully booked flight there are likely to be people with cash in hand that would just love to give it to the airline. And no-shows happen, for many reasons. It really is a sin when there are empty seats when the doors are closed.
Alsacienne
30th Nov 2017, 14:50
JFP asked Why does this have to be about LoCo?and I'm replying .... because it was the first time I'd experienced this on a LoCo . Hence why I started this thread. Of course it happens to legacy carriers too, but they would seem to have more flexibility to cope with this with OpUps for example wouldn't they?
RevMan2
2nd Dec 2017, 17:41
RM will also factor in the costs of compensating and accommodating disadvantaged pax against the expected marginal revenues achieved by overbooking. Overbooking levels vary massively, dependent on a wide range of factors - someone who’s requested a VGML on connecting flights with a non-refundable ticket is less likely to noshow than a point-to-point fully flexible ticket, for example
A subject many seem to have varying opinions on !
Speaking to one who set the overbook factors, by judgement, they said the worst on the BA network were evening UK to India, where you could be 50 (or even more) over, and still get away with everyone accommodated and not a spare seat. Result !
Denied Boarding Compensation amounts in the calculation should be factored by what proportion of such pax actually receive such a claim, figures as low as 25% are common. I know we here are well informed about it, but not all are, particularly if there is a convoluted reclaim process. I gave up on one with Air France after a year ("must refund to the original credit card", "must refund through travel agent who did booking", etc).
OB's are not wholly down to no-shows. For example, a factor on last of the day short hauls is passengers on full fare tickets turning up early and being transferred forward to an earlier flight, having booked the last of the day as an insurance in case their meeting drag on that long. So you OB the final flight based on normal numbers of this, but can get caught once in a while.
OpUps can of course only happen if there is still accommodation in the premium cabins, and there may be an issue with premium catering numbers already being loaded.
Routine denied boarding however really shows you have the wrong model. The US carriers for some reason seem to be poorer at it than most, I don't know how their algorithms can be so wrong.
DaveReidUK
3rd Dec 2017, 15:23
Routine denied boarding however really shows you have the wrong model. The US carriers for some reason seem to be poorer at it than most, I don't know how their algorithms can be so wrong.
The carriers no doubt look at it differently.
If you end up bumping roughly the percentage of passengers that the algorithm predicts, then it's working as intended.
Delight
4th Dec 2017, 12:32
I can see that overbooking makes sense if customers are buying tickets that allow changes, but if you sell more non refundable, non changeable tickets than you have seats, is that not fraud? I can't sell an item online to two different people in the hope that one of them never bothers to complain when I don't send them the item. Or can I?
I thought they they should sell standby tickets for full flights. Discounted and conditional on spare seats being available when check in closes. If no seats available you get a refund or allowed to move your booking to another flight. No overbooking but allows for extra revenue from no-shows.
Heathrow Harry
4th Dec 2017, 12:46
too much hassle at the airport
Delight. The network airlines will reaccomadate missed connectection on subsequent flights. This is just one example where the airline is not being paid twice for the same seat.
Economically and environmentaly it is a sin to let a seat go empty.
Every one of us who have ever flown on a full flight have benefitted from oversales. We just don’t know it.
And the average airline still only makes a few bucks per passenger, the locos do better but their ROI is still nothing spectacular.
I can see that overbooking makes sense if customers are buying tickets that allow changes, but if you sell more non refundable, non changeable tickets than you have seats, is that not fraud? I can't sell an item online to two different people in the hope that one of them never bothers to complain when I don't send them the item. Or can I?
I thought they they should sell standby tickets for full flights. Discounted and conditional on spare seats being available when check in closes. If no seats available you get a refund or allowed to move your booking to another flight. No overbooking but allows for extra revenue from no-shows.
Couple of words from revenue management here.
Overbooking takes place across all sorts of businesses. Restaurants take more bookings at the peak evening time than they have tables for, knowing that usually a proportion do not turn up. The proportion even varies by the weather, etc. So once in a while, with a reservation, you have to sit at the bar for 15 minutes.
With "full" flights you likely find that they were overbooked, but everyone got away. There are people in there who otherwise would have been turned away, and yet the flight would have departed with empty seats. Bear in mind that with 99% of OBs, you get away with it.
Regarding cheap standbys. the issue there is that pax, especially regulars (your best friends commercially) rapidly become wise to which flights normally are not 100% loaded, don't reserve, and you end up with less revenue than before. Sufficiently well known that there's a specific name for this, it is called "revenue dilution", where pax who would have paid a higher fare actually take advantage of a lower one. This is what actually happened, for example, when standbys were introduced across the Atlantic, to counter Laker's Skytrain.
Also, because you don't know until the last minute who will not turn up, having pax hanging around at the gate who may or may not get away just doesn't gel with current security management.
Amsterdam airport actually prohibited Pan Am and TWA from offering standbys at the gate (beyond Passport control) for various reasons. They had to do it from their town offices four hours in advance and bus them to Schipol.
horatio_b
4th Dec 2017, 19:04
I generally book tickets months in advance. Quite often, due to a change in circumstances, I realise that I am not going to be on the booked flight.
At the moment there is no incentive to tell the airline (low cost) as there is no refund.
If the airline were to make a gesture, such as a small credit against a future flight, I would let them know I was not going to be on that flight and let them rebook it.
edi_local
4th Dec 2017, 20:43
I don't see how standbys can be dealt with anywhere other than the gate.
I used to be a check in agent. On the occasion we had standby passengers due to oversales, even after accepting people once check in closed (by removing seat assignments for people who didn't check in), we would still send the odd few to the gate even if the flight was then full. You get a lot of people who don't turn up airside, even after checking in at the airport. Quite often you would get down to -10 minutes before STD and if passengers didn't show up after numerous calls, they get offloaded and the person on standby would get on instead. If we didn't allow at least a few standbys to go right to the gate then most oversold flights would still leave with empty seats. Offering the customers incentives several hours before the flight wouldn't really work, airlines would be paying out more DNB than necessary as it would more often than not backfire. That would merely cause them to oversell flights more.
The system they use now is not 100% accurate, but it's as best as you'll get unless you can absolutely guarantee every single person who is checked in gets on the plane on time.
Back in 1980 BA transatlantic standby tickets were sold (confirmed seating) from the start of the day, trying to emulate Laker. You could buy them at any BA office, and I recall doing so at Manchester Airport and then getting a connecting flight down to Heathrow for a trip to Los Angeles.
To illustrate the poor commercial issues standby caused, I was working at the time for a major US company, based in Detroit, with a UK head office near Heathrow. The (American) managing director sent out a missive about the substantial travel we did to Detroit, saying that we (including him) should go standby rather than book, as in his experience the plane was never full. This caused an element of dissatisfaction with the need to go early, queue, etc.
Our Newcastle branch manager came down on a domestic flight to Heathrow T1 one day, and while walking out and passing the BA ticket counter happened to notice the MD's chauffeur, who we all knew well, standing in the queue. He said to hang on a few minutes and he would give the Newcastle man a lift back to the office. Discussing why he was standing in the queue, he said "Oh, Mr x the MD is going to Detroit this afternoon, so I've come across early to get his standby ticket".
Heathrow Harry
5th Dec 2017, 09:16
always astonishes me how often people go through security and then don't board... I was on an LHR - ATL Delta flight last year and the lady in front of me (business Class even!) was onboard and becoming increasingly agitated as hubby, who she'd last seen in duty free, hadn't showed.
Eventually the Capt came back and suggested she either travel or deplane.... he said they'd located her luggage as soon as she raised the issue just in case
She got off - I'd love to know the full story...................
I generally book tickets months in advance. Quite often, due to a change in circumstances, I realise that I am not going to be on the booked flight.
At the moment there is no incentive to tell the airline (low cost) as there is no refund.
If the airline were to make a gesture, such as a small credit against a future flight, I would let them know I was not going to be on that flight and let them rebook it.Small gesture? You get the tax back. With some you can even rebook/reroute for a fee, saving most of your investment.
edi-local. Do locos do staff standbys? Don't see how they could be handled, except at the gate.
Just curious. I haven't flown standby for years, lowest available fare can often be better that ID90 etc.
horatio_b
5th Dec 2017, 09:41
ExXB Thanks for info regarding reclaiming tax. The airlines keep this very quiet.
How to claim back the tax on your ticket if you miss your flight | This is Money (http://www.thisismoney.co.uk/money/holidays/article-3723398/How-claim-tax-ticket-miss-flight.html)
It is definitely worth doing on Easyjet who do not charge, but with other airlines
who charge an admin fee (e.g.Ryanair £17, Flybe £25) probably not worth the hassle.
Well, there is the principle ... :p
alserire
5th Dec 2017, 15:11
ExXB Thanks for info regarding reclaiming tax. The airlines keep this very quiet.
How to claim back the tax on your ticket if you miss your flight | This is Money (http://www.thisismoney.co.uk/money/holidays/article-3723398/How-claim-tax-ticket-miss-flight.html)
It is definitely worth doing on Easyjet who do not charge, but with other airlines
who charge an admin fee (e.g.Ryanair £17, Flybe £25) probably not worth the hassle.
There should be a legal obligation on airlines to refund taxes for to people who have not traveled and no fee for same. :=
A reasonable fee is permitted, under EU regulation. Now define reasonable.
When you get your laws back, you can decide for yourselves. Oh wait, FR will have to cut all their flights except to Ireland.
edi_local
5th Dec 2017, 17:15
edi-local. Do locos do staff standbys? Don't see how they could be handled, except at the gate.
Just curious. I haven't flown standby for years, lowest available fare can often be better that ID90 etc.
Not sure if it's ID90s as such, but most offer some form of standby travel for their own staff in my experience anyway.
The (legacy) airline I work for has interline agreements with various Lo-Co's, on which I can avail ID90 fares. I find within the UK and often within Europe that ID90s are almost pointless and can often find Lo-Co fares for less or not much more than an Standby. One good thing is that ID90 fares still always include a full baggage allowance.
I was referring to overbooked flights from any airline, Lo-Co or not. The only way to ensure every seat is taken is to have people waiting at the last possible place they can either be denied or allowed on.
Thanks, I was just curious as had never seen staff standbys at U2’s gates.
easyflyer83
6th Dec 2017, 15:02
Yep, U2 does have staff standby’s. They also have a very good confirmed staff seat system but that very much depends on whether the booking system has released staff seats. Their standby system however is very different to other carriers.
1. Only max of two staff standbys per flight at the booking stage
2. If the flight you booked on standby is released onto confirmed staff travel then your flight is confirmed at that stage.
3. Often you get confirmed at check in