LoCo overbooking
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LoCo overbooking
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!
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!
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).
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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.
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.
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.
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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.
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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.
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.
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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.
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.
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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.
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.
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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.
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.
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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?
Why does this have to be about LoCo?
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.
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.
If you end up bumping roughly the percentage of passengers that the algorithm predicts, then it's working as intended.
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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.
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.
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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.
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.
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.
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.
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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.