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Southwest to Stop Overbooking as United Uproar Echoes

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Re: Southwest to Stop Overbooking as United Uproar Echoes

#11

Post by kobeya »

mwfunk wrote: post #7
sandworm101 wrote: post #4

Earlier quoted context omitted.

I don't see how it could. Only a handful of people on any one flight are ever bumped, on average. The bumped are normally put on other flights. The only 'win' is where someone doesn't show and also doesn't fly or get a refund. I cannot see how it is more than 1 or 2% of revenue. That said, perhaps I am dead wrong and overbooking is being used for darker purposes. Perhaps they are deliberately overselling flights at p…

Well, if it's a 1-2% decrease in revenue there might be a 1-2% price increase. I thought the margins for US airlines were incredibly small (could be wrong, I'm no expert).

Not recently. Costs have plummeted and airlines are one of the more profitable industries these days.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#12

Post by aresant »

This response feels knee jerk.

It's been demonstrated in countless other threads (1) and articles (2) how economically important it is to overbook.

Overbooking is central to airline profitability and their ability to provide flexibility - like partial refunds, or SW's "open tickets" policy on business select.

As a consumer I appreciate these things and find them incredibly useful.

United's response of "We'll push the allowance up to $10,000" is completely acceptable to me, that seems like the simplest solution.

(1) http://www.businessinsider.com/overbooking-flights-is-good-f...

(2) https://techcrunch.com/2017/04/11/overbooking/

Re: Southwest to Stop Overbooking as United Uproar Echoes

#13

Post by valuearb »

sandworm101 wrote: post #4
jemfinch wrote: post #2

Does that mean ticket prices will increase?

I don't see how it could. Only a handful of people on any one flight are ever bumped, on average. The bumped are normally put on other flights. The only 'win' is where someone doesn't show and also doesn't fly or get a refund. I cannot see how it is more than 1 or 2% of revenue. That said, perhaps I am dead wrong and overbooking is being used for darker purposes. Perhaps they are deliberately overselling flights at p…

It's not about how many were bumped. It's about over selling seats so that when people on refundable tickets don't show the plane doesn't leave with more empty seats.

Margins in air travel are small, an extra seat sold on every flight is a huge difference, this will definitely affect revenues and profits, and will likely lead to slightly higher ticket prices. Until the race to the bottom returns and they start overbooking again.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#14

Post by valuearb »

kobeya wrote: post #11
mwfunk wrote: post #7

Earlier quoted context omitted.

Well, if it's a 1-2% decrease in revenue there might be a 1-2% price increase. I thought the margins for US airlines were incredibly small (could be wrong, I'm no expert).

Not recently. Costs have plummeted and airlines are one of the more profitable industries these days.

Historically airlines are one of the least profitable businesses in history. A few good years doesn't change that much.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#15

Post by leesalminen »

cortesoft wrote: post #6
nathancahill wrote: post #5

Earlier quoted context omitted.

I've flown very often with Southwest, and have rarely seen a completely full plane. The fullest I've seen still has one or two middle seats free at the very back of the plane.

You must fly very different routes than me... the flights I am on are almost always full.

This mirrors my experience as well, especially flights to/from DEN. TPA - SJU is one notable exception.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#16

Post by chmaynard »

Southwest Airlines has the best website, best checked luggage policy, best change policy, and now no overbooking. The big four domestic airlines all treat coach passengers like cattle, but Southwest is the least predatory.

Edit: Also, consider that Southwest is very profitable despite the fact that they don't have first class or business class sections on their aircraft. Yes, passengers pay different fares. But as far as I know, they all sit in the same crappy seats.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#17

Post by gregschlom »

I have a question for the HN crowd: what would happen if airlines sold their seats at a fixed price and let customers resell them?

For the sake of the discussion let's assume that all seats are in the same class (ie: economy) - there are no business / first class seats.

So the idea would be:

1. All seats are sold at the same price, no matter how early or how late you buy. The price covers all the costs associated with running this flight, given an expected "occupancy rate" (sorry not the right term).

2. All tickets are non-refundable. If a customer changes their mind, they use the airline app to put their ticket up for sale. They can try to sell the ticket at the same price, or at a discount (or maybe even at a higher price?)

3. Airline charges a small fee (something like $10) every time the ticket is transferred to another person.

Since this has never been done - to my knowledge - there must be something wrong with it. But I wonder what it is?

Re: Southwest to Stop Overbooking as United Uproar Echoes

#18

Post by maccard »

aresant wrote: post #12

This response feels knee jerk. It's been demonstrated in countless other threads (1) and articles (2) how economically important it is to overbook. Overbooking is central to airline profitability and their ability to provide flexibility - like partial refunds, or SW's "open tickets" policy on business select. As a consumer I appreciate these things and find them incredibly useful. United's response of "We'll push the…

The main budget airline in Europe (Ryanair) doesn't overbook flights, and as far as I am aware never has done. They managed a net profit of 1.4 billion dollars last year.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#19

Post by zdean »

aresant wrote: post #12

This response feels knee jerk. It's been demonstrated in countless other threads (1) and articles (2) how economically important it is to overbook. Overbooking is central to airline profitability and their ability to provide flexibility - like partial refunds, or SW's "open tickets" policy on business select. As a consumer I appreciate these things and find them incredibly useful. United's response of "We'll push the…

I think if there's any airline that I'd give the benefit of the doubt for making a change like this, it would be SW. I can't imagine that a conversation around this issue ONLY came up for them after the (most recent) United fiasco.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#20

Post by nommm-nommm »

jonknee wrote: post #9
mwfunk wrote: post #7

Earlier quoted context omitted.

Well, if it's a 1-2% decrease in revenue there might be a 1-2% price increase. I thought the margins for US airlines were incredibly small (could be wrong, I'm no expert).

They also won't have to pay the people who get bumped which will somewhat offset the lost revenue from overbooking.

I was under the impression they didn't actually pay people bumped, only gave them a voucher for their next flight that they probably won't even use.

Do they actually give cash?

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