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A simple solution for the problem of overbooked flights

It all starts with understanding that the problem isn’t overbooking, but the randomness of being booted off a flight based on an algorithm


 
Travelers check in at the United Airlines ticket counter at Terminal 1 in O'Hare International Airport in Chicago. . (AP Photo/Nam Y. Huh, File)

(AP Photo/Nam Y. Huh, File)

It is not hard to put yourself in the place of Dr. David Dao as he looked forward to heading home from Chicago on United flight 3411. You booked your ticket and you have obligations waiting for you at your destination. Barring circumstances like an unexpected storm, you expect to reach your destination if not on time, at least when the rest of the passengers on your flight do. That, of course, is not how things transpired for Dr. Dao.

The United Airlines incident last week, and a more recent story highlighting the challenge of a PEI 10-year old being bumped from a flight to Costa Rica, has sent the internet into a predictable tempest. The debate over what the real problem is in this case is ongoing.  Was it the fault of an uncooperative passenger? An overstepping of the Contract of Carriage that United operates under? A bad call by flight crew or an overly greedy corporate policy? The moral question of whether it is better to delay four passengers to ensure a flight of 120 is able to fly the next day is a boon for university instructors needing a current example to teach utilitarianist ethics.

But if we are to define the problem in a way that leads to a solution, all of these things miss the point.

The problem is not overbooking. It is not the unabashed pursuit of profit by airline CEOs. It is not even the chaos that arose when one passenger peacefully resisted the system.

The problem is random cancellations.

It is the fear that you might be next, that your perfectly reasonable plans for taking a journey—for a needed vacation, an important medical appointment, a visit to a dying relative or any other reason that gets you into the cramped seat of an economy class flight—may be derailed by an algorithm that didn’t quite predict the no-show rate of your particular flight.

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And knowing that it’s the algorithmically-driven selection of passengers to de-board, and not the initial overbooking itself that is the problem, is important. That’s because it leads us to a solution that takes advantage of the micro-pricing strategy airlines have been all too eager to implement in recent years. We now pay a price for the extra legroom in the emergency aisle, our checked bag and, on the most aggressive micro-pricing airlines, the privilege of paying for your flight. We need a system that allows us to buy the predictability of being in or out of the category of passengers who will be selected for involuntary rescheduling.

To do this, airlines could simply implement a new category between the stand-by ticket and the basic economy ticket: the first-bumped ticket. Airlines that wanted to overbook a plane by five pre cent would simply ensure that five per cent of their tickets were sold as first bumped. Another avenue would be to make this a negative option: passengers could buy the right not to be bumped for a fee.

However it is implemented, we would move to a system with greater transparency and predictability for passengers. This would make it possible for the airline to offer even lower headline fares and for semi-flexible passengers to plan accordingly and enjoy the savings. Passengers would be able to read up ahead of time about the compensation they would receive for being displaced and airlines could communicate what their algorithms predict the likely delay to be. This turns a random, infuriating situation into an orderly, informed free market.  Consumers get the choice to pay the premium for a more secure seat. Airlines get the choice about how much to overbook flights. This would benefit everyone because the problem presented by the existing system is an inability to plan.

Airlines of the world, what would it take to make such a system fly?

 

Stephen Price is an educator and writer who lives in Vancouver. Follow him on Twitter here: @YVR_P.


 

A simple solution for the problem of overbooked flights

  1. Mr. Price writes an interesting article that proposes a solution that promises to cause further frustration for the people who, having still paid hundreds of dollars to fly, get bumped off their intended flight. The proposal perpetuates the victimization of airline customers, potentially separating families and friends, creating missed connections, missed vacation days, this proposal solves nothing.

    Jimmy Kimmel nailed the solution in his commentary the day after the United Airlines fiasco. “I’ve been to a hundred games in stadiums with 50,000 seats. They never sell the same seat twice.” (https://youtu.be/bSGWxHMYgL0) Simple, effective, and done. Passengers, like fans, who purchase a ticket for a seat deserve the right to know that the contract they have entered into with the vendor will be respected. They have purchased a seat for a period of time for the purpose, in this case, of flying safely from one point to another. For those that want to test the system, if you miss the flight, you miss the flight and lose your money . . . just like other events. Simple.

    There are places for the auction type behaviour that Mr. Price alludes to. They are auctions and stock markets . . . which are, wait for it, auctions. When I pay for a ticket to a game, a play, a movie, a flight, I expect the vendor who enters into the contract with me to fulfill their part of the bargain. They have my money, and acts of God notwithstanding, they have an obligation to deliver.

    Anything else is greed.

    Period.

    • Airlines that try this strategy would go out of business. Airlines sell the same seat slightly more than once expecting some people not to show up. This results in more bums in seats (value added). By selling the same seat more than once, they can price their tickets a bit lower and still make a profit. They can undercut the competition that does not overbook seats.

  2. This article, in its attempt to provide a “simple solution” only suggests further complications. And the answer ignores what, I believe, is an illegal situation … the breach of a contractual obligation.

    Little has been said, of this headline grabbing situation, that the disorganized aircrew demanding seats at the last moment, could have flown on another aircraft that was departing one hour later. After all, they were not on duty until the following morning. Which suggests to me that it is crew-transitioning policy to believe in the usefulness (entitlement) of ‘bumping’ fee-paying customers.

    In, what should be considered, a rare case of ‘bumping’ a passenger, each passenger should be awarded, at least, a coupon valued at twice the ticket price plus, when necessary, the cost of hotel accommodation.

  3. Sounds like surge pricing to me

  4. I find the responsibility Mr. Price places the onus upon for unfilled airline seats rather odd. The reason for the majority of these empty seats is either because passengers didn’t show up, cancelled or rebooked their flight too late for the seat to be resold, or because they missed their flight due to missed connections (due to problems with airline schedules, other transportation systems or weather outside of passenger’s control). As it is, people who “pay a premium” on their ticket price get the opportunity to reschedule their flight the last minute with no or minimal cost to them, by the classification of ticket they purchase, while low cost economy tickets often do not allow for rebooking or cancellation, so if they do not show, they simply lose the cost of their ticket.

    It would be interesting to determine which class of client is more likely to not show up for their scheduled flight, the one who loses their full fare, or the one who can reschedule, cancel or not appear for their flight and still receive the majority of their fare back.

    Perhaps tickets which allow for cancellation and rebooking options need to have higher booking costs associated with them, to better compensate for those unfilled seats.

    Selling a seat that has been already fully paid for once with a non-refundable ticket, thus allowing the airline to receive a double fare is totally unethical, especially if so doing may lead to legitimate paid clients to be “bumped” when the airlines overbook and more people show than there are seats available.

    For many years, the concept of “standby” fares existed to rapidly sell unfilled seats, due to being unsold, or the occupant not arriving in time to fly. New airport security demands no longer allow for this option to be feasible.

    Airlines cancel flights if not enough people book them, leaving passengers stranded, missing connecting flights, or having to scramble to rebook elsewhere. Airlines need to have less ability to abuse their clients, violate their basic rights and/or the contracts entered into with them. If they cannot run profitably without such violations, they have no business being in business.

    Some airlines remain profitable and never overbook. If airlines believe that their business model includes overbooking to be more profitable, they had better also have a nice treasure chest available to bribe people to give up their seats, or an even bigger one to pay for the pending lawsuits.

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