Delta avoids the overbooking issue by having a much SMARTER policy

[pnwmom]

than United.

United stupidly offered only $800 and when no passenger wanted the amount, had the doctor dragged off the plane -- even though they knew they'd have to pay him $1325 for an involuntary bumping. Why they didn't offer 1000 or 1300 or whatever they needed till they found a willing taker is beyond me.

But this is how Delta does it -- they get passengers to handle the bidding. Delta saves money without angering their passengers.

http://www.pbs.org/newshour/making-sense/how-delta-masters-the-game-of-overbooking-flights/

When Delta overbooks a flight, they let their passengers decide how much getting bumped is worth. I discovered this last week when I checked in online for my flight from Minneapolis to Philadelphia. What was the minimum I was willing to accept in travel vouchers to take a later flight — $500, $300, $200, less? After doing some rough mental calculations, I bid $300. High enough to cover most of a ticket to Mexico and low enough to be competitive without feeling exploited.

No deal. I boarded my flight on time and arrived in Philadelphia five minutes ahead of schedule.

Delta started this practice back in 2011, and it works like this: When passengers on overbooked flights check in online or at the check-in kiosk, they’re asked what the dollar value of the travel voucher they would accept as compensation for volunteering their seats. They give you a hint, too — “Delta accepts lower bids first.” By the time you reach the gate, the gate attendants already have a list of passengers to call up to confirm they’ll fly standby. If your bid is low enough, you’ll be on that list.

By having customers compete against one another to give up their seats, Delta ensures it can just about always lock in the lowest possible payout. How low can you go? The ground is the limit.

[pangaia]

1. Overbooking is still ridiculous.

I can see no reason for it.If a passenger books a seat and doesn't show up he/she pays for the seat anyway.

[PoliticAverse]

3. The problem is, customers hate that policy more. They don't want to pay for a seat

Last edited Thu Apr 13, 2017, 01:29 AM - Edit history (1)

if they cancel their reservation.

[Ms. Toad]

6. Not always.

If you are on a connecting flight that is delayed (as happens frequently), your seat will go empty and they will have to put you on another flight - so you're actually only paying for the seat on the replacement flight - and your seat on the original flight is now a non-revenue seat.

In addition, there are airlines that give you full credit for your ticket if you cancel - even at the last minute, which may be too late to fill your now non-revenue seat with a new passenger.

I like Delta's solution. There have been times I would have liked to take them up on their overbook offer - but I didn't scramble fast enough to get the deal. The bidding process eliminates that.

[ToxMarz]

13. If you are on a connecting flight and your flight is delayed,

when the flight is overbooked then the seat DOES NOT go empty. One of the many reasons they overbook (as this happens frequently).

[Ms. Toad]

16. That was my point.

I was responding to a person who was arguing against overbooking, on the basis that the seat was already paid for so the airline doesn't need to fill it because it doesn't lose any money when it goes empty - so they should leave it empty, rather than overbooking).

I was pointing out that if there wasn't overbooking the seat would be empty and unpaid for, since the shifted passenger is not not paying for both the empty seat on the missed connection AND the seat you are now filling on the flight you are transferred to.

[cos dem]

7. Overbooking has been around for a long time.

I've known about it ever since I started flying regularly in the late 80s. I've actually taken the incentive myself a few times. It might be annoying, but at this point, I can accept it as the way of the business. Airline still has an obligation to get you to your destination, just not necessarily on the flight of first choice.

Delta's idea seems like a creative and customer-involved solution to the problem.

[PoindexterOglethorpe]

15. Overbooking has been around for upwards of 50 years.

I know because I was an airline ticket agent starting in January, 1969.

Back then there was a larger problem with no-shows, or people who held multiple reservations to cover various contingencies. Even today, not all tickets are non-refundable, and so to assume (as was the discussion in a different thread) that the airline will get its money even if a seat goes out empty, simply isn't correct.

The problem isn't the overbooking in the first place. The problem is when more confirmed passengers show up than there are seats for. Overbookings are standard practice to try to make up for no-shows. Airlines want every single flight to go out 100% full, if possible. Their mantra is that an empty seat can never be sold, and is totally lost revenue.

I understand that these days flights need to average an 85% load factor just to break even, which is horrifying. That says a lot about how seats are priced, and perhaps about how many seats are purchased using miles.

The airlines have gotten themselves into this situation by under-pricing most seats, and the idiocy of frequent flier programs. A good twenty years ago I was reading things about how the airlines were digging a deep hole with those programs, and I'm sure it's gotten vastly worse in the years since. I will also confess that I cannot begin to understand how anyone ever gets a seat with frequent flier miles, as I have never ever had enough miles to do so. Sigh.

Oh, and the Delta practice described is pure genius.
But the crucial point in the United situation is not that the flight was oversold, because it wasn't. It was that some crew members who needed to deadhead to pick up a flight showed up after this one was boarded. The United agents handled it very badly, to say the least. Why they didn't keep on upping the offer to get volunteers is beyond me. I've been in the gate area more than once when that has happened. Once, and only once, I took advantage of such an offer. Turned out to be well worth it.

Please do not think I am for one millisecond condoning what United did. They were wrong. Totally and completely. There was a far better way to handle what happened, including biting the bullet about the crew members not being accomodated.

[Yavin4]

29. If all of the airlines adopted a strict 24 hour notice...

then there wouldn't be any issue.

[Dem2]

2. pretty smart actually

[PoliticAverse]

4. Simple, easy, thrifty. n/t

[GP6971]

5. I've never had a problem Delta and previously Northwest

Although their seating, like all the majors suck. We're going to Hawaii and we booked First Class. By the time I looked at all the extra costs to have "extra legroom" and comfort, it was worth it to spend the extra money.

[BannonsLiver]

8. I like Delta

I've flown internationally at least once a year over the last few years and they seem to have a good operation on the whole though hartsfield can be deeply unpleasant on the return if you're connecting from an international flight. Frequent baggage problems (broken belts, etc.) has been my experience. Not sure how much of that is on Delta.

I flew United to Cancun in February and had a good experience though we didn't check bags. It was basically a more impersonal Southwest.

But I've seen Delta's bidding in action and it seems like a good solution.

Flying to South Africa on BA next month and am interested in seeing how that experience is going to go. Their reviews on Skytrax lately have been bad but the price was too good to pass up.

[underpants]

30. My brother-in-law flies internationally weekly and swears by Delta

He puts in a lot of miles.

[athena]

31. Delta's customer service used to be horrible.

I remember having such a bad experience once that I avoided them religiously afterwards. This was before 2007, probably around 2005 or so. I wonder if they got so many complaints that they fixed some things.

Of course, your brother probably has so many miles on Delta that they might treat him better than a new customer with no miles.

[underpants]

32. Yeah

Whatever their top tier of special membership is, he's that.

[HoneyBadger]

9. It is a great idea

Every passenger should submit a number, if they do not want to be chosen, pick the maximum number. If they do not choose, they get the maximum number default. That means that they and the airline agree on a price to be removed that is binding for both. Since anyone can be bumped involuntarily, everyone should have a number. The number should be a percentage or multiple of fare paid. There are flights that cost $200 and there are flights that cost $20k. Obviously an $800 voucher means something different to the purchaser of each. If you did not pay a fare, you should be the first to go. That addresses the folks flying on points and mistake fares.

[msongs]

10. race to the bottom on the bids thing. how about 75 cents, customers? nt

[ProfessorPlum]

17. ? No one is forced to bid lower than they want to

Either you get your price or you get the ride you paid for. It's better than getting your face smashed in.

[JI7]

11. that is a great idea. just giving money or gift cards might even get more offers

[HoneyBadger]

12. If you do not want to go on a business trip

Offer to pay them to bump you. Offer to add $100 to the payout for teething babies. The revenue possibilities abound.

[TeamPooka]

14. and to my knowledge Delta has never had a passenger beaten for buying a ticket and sitting on their

plane.

[Barack_America]

18. The other key is their vouchers are easily redeemable.

I redeemed one myself just this week. I did have to call as I wanted to use the remainder for a second passenger on the same booking...accommodated without question. A flight with better times went on sale the next day, changed without penalty.

Delta seems to recognize the hell that people go through these days to fly and how much they hate it. Treat them well once they get to your airline and they'll return. Most people I know pay more to fly Delta.

[Kashkakat v.2.0]

24. YES this is the key - vouchers that can actually be used - having had bad experience w/ voucher

that turned out to not be useable for anywhere that I wanted to go - and then it expired in a year - I swore Id never do it again, not for any price.

So now, if Im on a plane, tired and cranky, and someone is offering me some voucher how do I know if its actually useable, or if they're scamming me again? Fool me once... not get fooled again!

I would suggest instead of vouchers for future trip, why not just offer to refund my ticket for the trip Im already on - I would go for that.

[barbtries]

19. except when everyone on the flight has a place to be.

i travel for work and cannot take vouchers to give up my seat no matter how much they offer. clearly that was the case on the flight to Louisville (?).
we don't really know how Delta would handle that. personally i despise Delta. they're always delaying my flights. When Southwest had a plane with mechanical problems and our flight was delayed 4 hours, they gave everyone flying a $100 voucher. When Delta delayed my flight recently for 3 1/2 hours, they gave us food. bad food.

[pnwmom]

21. No, that wasn't clearly the case with Louisville. They stopped the bidding at $800. Just because

no one bit at that amount doesn't mean they'd have rejected 1000 or 1300. Or 13,000.

(There is no maximum they could have offered -- the $1325 sometimes mentioned is the most the FAA would REQUIRE an airline to compensate involuntarily bumped passengers, but they could offer more than that.)

[barbtries]

22. what i think they should have done

is fly the people on the plane to their destination. too bad for the crew who didn't get there in time. too bad for the airline for fucking up. when you pay for something you should get it.

[Tom Rinaldo]

20. The key piece of data needed is when can they get me there instead if I give up my seat?

That is the only way I can know how inconvenient or even possible it would be for me to give up my seat in return for a "later" flight.

I used to fly Continental a lot for business a number of years back (pre United merger) and I often asked agents when I got to the gate if they were in a potential overbook situation. Frequently the answer essentially was "maybe", depending on whether or not everyone showed up. I would volunteer my name for bumping AFTER I asked about what flight they could get me on instead if I gave up my seat. If my schedule was flexible and a delay would not upset important plans I loved getting bumped. Often I was flying at night so I could attend an early afternoon meeting on the West Coast. If they bumped me from my second leg connecting flight and put me in a hotel for free I usually got more rest and arrived in plenty of time if they moved me onto an early morning flight instead. But if the rebooking meant being late for, or missing entirely, the reason why I had to fly in the first place - then no level of compensation was adequate enough to take.

Coming home it usually didn't matter when I got home exactly, and a few hours delay made no difference. I was cool with getting home at 11:00AM the next day rather than at 11:00 PM that night as originally planned if it paid for my next cross country round trip ticket.

[Phentex]

23. Same for me...

I have been asked ahead of time (with Delta) and if it's early enough in the day where I can still get to wherever I'm going, I might do it. If there's a chance I won't get any flight until the next day and would miss whatever I needed to be there for in the first place, I won't do it.

[pnwmom]

25. What if they offered you $5K or $10K?

I'm sure there was someone on that plane who would have taken an offer like that -- and it would have saved the airline a great deal of money.

[exboyfil]

26. You are right - that is how a seat buy back program should work

There is an economic advantage of overbooking. Having filled planes is an economic benefit to the country. The problem is that, as originally conceived, the seat buyback program did not envision a cap on the compensation. UAL used a ridiculously low policy cap ($800 in travel vouchers which probably has an economic value of $200?) and then used the security apparatus to enforce that policy cap. In a pool of 100 potential offer takers the free market should rule. This transaction occurs all the time at the gate counter. I would urge anyone experiencing a non-voluntary bump to do two things. The first is to loudly question why they were selected ensuring that the encounter is videoed, and the second to take the cash and not the travel voucher.

$1350 is still not enough to enforce non-predatory practices by the airlines, but it is a start. There is nothing "random" about the selection of passengers. They are picked based upon an algorithm that quantities their economic benefit to the airline. That decision also has civil rights implications that have not been explored yet. Throw this into the fact that the passenger can already be viewed as "boarded" (sitting in his assigned seat) which dramatically restricts the rights of the airline to then remove that passenger from the plane. Obviously this point could be argued in a court of law of course (what qualifies as boarded). By asserting his rights the customer forced the situation (reminds you of a civil rights icon who stood for her rights when she had less cover from the law).

[dlk]

27. Why be Logical?

There is no excuse for United's consistent abuse of paying customers. If they weren't so penny-pinching and greedy for a few extra dollars, they could have easily avoided this entire debacle, which will likely cost them dearly in the long run. Bad management starts at the top and "trickles down." The are are numerous customer-friendly ways to handle passengers relinquishing their seats. Why United doesn't have a logical and reasonable policy speaks volumes about the poor quality of their management, from the top on down.

[exboyfil]

28. Thanks for the article share

A telling quote in it that demonstrates that United is predatory in its bump practices.

For the past several years, Delta has largely outperformed its major competitors, United and American, in bumping far fewer passengers involuntarily while routinely getting more passengers to voluntarily fly standby. In 2014, about 96 of every 100,000 Delta fliers had to take a later flight because the plane was overbooked. This compared to 95 at United and 50 at American. But only three of every 100,000 Delta passengers were bumped involuntarily. United had to bump 11 and American, five. Multiplied out, Delta was able to get thousands more of its passengers to agree to stay behind and bumped thousands fewer passengers involuntarily.


There is an important question for the UAL CEO. Too bad no reporter will ask that question (Are you predatory in your bump practices, and how random is your "random" selection process). It would be useful to see the demographics of that selected group. They may represent disparate impact to a protected class.