Why Do Airlines Overbook?

Anyone who grew up watching The Jetsons knows that, come the 21st century, we were supposed to fly everywhere. OK, the cartoon was not set in 2017 and everybody has a flying car. So, while we are not that close to the idea, we are not that far away from it either. The truth is that we fly around much more than we used to. Travel across long distances has increased. And take a country like the USA, where such great distances can only be covered by air. Also, with travel becoming much more affordable to a larger number of people, we can say that we fly around a lot. Kind of like in the Jetsons? Maybe not yet. But this means that travel conditions are important to a large number of people, reason why a scandal from April 2017 spread like wild fire.

The United Airlines Scandal

LAX International Check-In

Anyone with access to the Internet has seen the news about the doctor dragged off a United Airlines flight in April 2017. The image was distressing as blood was trickling down his face, his glasses were askew and his blouse was running up on his torso, revealing his abdomen as he was being pulled out of the plane by the hands. The idea of being treated thusly as a paying customer was horrible to everyone who saw the video. Not the mention the thought of not getting to your destination on time. In this case, the passenger was a doctor who could not take a later flight as he was expected at work the following day.

The way the airport security acted in this case was appalling and many people spoke in favor of the doctor. And even with so many people recording the incident as it happened, the company representatives still tried to get away with the fact that the passenger became violent and refused to get off the plane. This argument did not seem to convince any of the victim’s supporters who claimed that they had no right to take ask him to get off the plane in the first place.

A PR Nightmare for United Airlines

Shaming the company became a national sport in a matter of hours, and a lot of people expressed their disapproval of how the company employees acted. Despite saying that their violent manner is not something the company has approved of, it was still the practice of getting bumped off a flight that got people going. If anything, it’s because many people have been there.

In the case of the United Airlines flight involved in the scandal, members of the crew needed seats on that flight. This was something unexpected and something they tried to fix as they could. Reportedly, company representatives tried to offer $400 and $800 vouchers to anyone willing to give up their seats. And we know how this turned out.

The attitude of the company security officers did not help at all in the matter. Many airline company representatives claim that nobody is ever happy to get bumped off a flight. Yet, being dragged off is not justified at all.

Why Do Companies Overbook and Who Gets Bumped When They Do

The United Airlines scandal has brought in the spotlight a practice we have all grown accustomed to and we have quietly accepted over the years. But do we know and understand why airline companies do this? Is it greed or is it an attempt to keep services affordable? How can these two things be connected? Try to keep up.

The delicate balance of making a profit while making a service affordable

Business Class of United Airlines

As we mentioned before, more and more people have started to travel. But what you know for yourself is that the vast majority of them, do it on economy class, low price tickets. And even if this ticket is more expensive than a bus ticket, for example, the advantage of getting somewhere in 2 hours, compared to 8 or 10, is huge. Therefore, everybody prefers to fly and gain time.
On the other hand, operating a plane is not a cheap business. Having a plane, fuel and a crew is not everything. There are a lot of costs to take into consideration, there are a lot of procedures to be done before every take-off. Resources are limited, expensive and the income has to justify the activity. Then how can such a business be run at prices people can afford?

They sell more seats than they have on a plane, to make sure that if a person never makes his flight, even though the ticket is paid in full, the seat does not remain empty. This is a double opportunity for airline companies, and it is one that allows them to keep prices low. So, how do they know how much to overbook, when to do it and how can they willingly do something that they know will annoy customers and get them to avoid the company forever?

The algorithms

Man at airport
If you watched the news or connected shows in the period following the United Airlines incident, you may have heard talk about the algorithms used by companies to decide when and how many seats to overbook. And while no company will reveal their algorithm, they can still give a couple of pointers on how they come up with the numbers.

For starters, important holidays and national events that will make people not want to miss a flight are off limits. This means they will make an extra effort to get there. However, random flights on odd days with a history of people not showing up at the airport, get overbooked. Another indicator of whether or not the company will overbook flights is whether or not the city you are flying from has other means of transportation to offer as an alternative. For example, if a person is on the brink of missing a flight, they could just as well try to take a train or a bus to the same destination. If there is no other alternative, that person will try harder to make the flight.

Who gets bumped

Business class, flexible ticket holders and frequent fliers are less likely to get bumped off a flight. Their tickets alone provide 60% of the company’s revenues. On the other hand, the people with the cheapest tickets are the surest bet. Therefore, while companies claim to struggle to keep tickets affordable, they will be the first to get bumped if a business class traveler needs a seat and has a flexible ticket.

Should the laws change and airline companies be forced to sell only the number of existing seats, then prices will increase considerably to account for the losses the current algorithms are preventing.

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