Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Southwest to Stop Overbooking as United Uproar Echoes

bloomberg.com

Post reply on HN
Print view View original

101–110 of 335 posts

Re: Southwest to Stop Overbooking as United Uproar Echoes

#101

Post by gshulegaard »

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…

Overbooking is key for maximizing producer surplus. Whether or not that is economically advantageous to the economy as a whole is a different and more complex question.

But the notion that a company maximizing it's surplus is _always_ beneficial to consumers is tricky but more likely false within the confines of my limited understanding of contemporary economic theory.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#102

Post by deepnotderp »

amorphid wrote: post #84
corford wrote: post #81

Earlier quoted context omitted.

Overbooking is a technique used by legacy airlines. Pure LCCs don't use it (certainly in Europe) because their tickets are non-refundable other than from EC261 claims and they don't have inter-lining or partnerships with other carriers. I'm surprised Southwest were overbooking in the first place given they're a budget airline... Edit: An exception may be Easyjet (though I've never seen it happen and I fly them a lot)…

Southwest flights aren't that cheap unless you book in advance. And they used to (still might?) have a very flexible refund policy. You could not show up for a flight, never call, and still get a full credit for the value of your ticket to any other Southwest flight in the next 12 months w/ no penalty. I really like Southwest.

Yeah, they're super flexible, Southwest is pretty amazing.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#103

Post by jupiter90000 »

gregschlom wrote: post #17

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 wit…

The issue I have with that is then these middle-men buyers would step in like they do for NFL and concert tickets, buying up all/most supply almost immediately when it becomes available for any reasonably popular flight. Then they charge double the price, and there's not much one could do other than pay double or not fly.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#104

Post by eric_the_read »

gregschlom wrote: post #17

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 wit…

You used to be able to do this in the long-ago; you'd even see people selling tickets in the classified section of the newspaper (kids, ask your parents).

The problem is, the airlines would rather make more money by selling the new person the ticket at an inflated price (presumably if they cared enough to save money, they'd have bought in advance), and from you as well in ticket change fees. This was sold to us as a post-9/11 fix to ensure terrorists didn't buy tickets, but I doubt that was the underlying reason.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#105

Post by crystalmeph »

gregschlom wrote: post #17

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 wit…

The problem here is really selling all seats for the same price.

Airlines know that some customers are price-sensitive, e.g. those planning a trip months in advance, and some customers less so, e.g. business people flying out to a last-minute meeting.

So if they just sold all the tickets for the "average" price, they simply wouldn't get as many customers, because all the price-sensitive customers would go to their competitors still doing things the old way, and there's no guarantee that they will attract enough of the less price-sensitive customers, unless they lowered prices even more than the previous average, and if they actually make less than the current average price, this is simply not a viable plan.

In addition, since the customers you have left tend to book later, you won't know for sure if you're filling up your plane or not until closer to the departure date, and that could potentially wreak havoc when allocating planes to routes.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#106

Post by bilboa »

beamatronic wrote: post #38
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…

Is it possible to sell an overbook and a non-overbook class of tickets separately, and clearly delineate that to the customer as such?

Yes, that's what "standby" tickets basically are. Some airlines would (not sure it's still a thing) sell you a "standby" ticket for cheaper than a normal ticket, which meant you show up and wait at the gate until near departure time, and then if there are any seats available they let you on the plane. If not you have to wait for the next flight.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#107

Post by amorphid »

pauldino wrote: post #93
amorphid wrote: post #84

Earlier quoted context omitted.

Southwest flights aren't that cheap unless you book in advance. And they used to (still might?) have a very flexible refund policy. You could not show up for a flight, never call, and still get a full credit for the value of your ticket to any other Southwest flight in the next 12 months w/ no penalty. I really like Southwest.

They've restricted it slightly: now you have to notify them at least 10 minutes before the flight. But still no penalties - I really hope they don't have to do away with that policy since that's the main thing I like about Southwest.

That's still flexible enough for my needs. Thanks for the info.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#108

Post by davidf18 »

brandonmenc wrote: post #90
WillPostForFood wrote: post #74

Earlier quoted context omitted.

Counter-counter point: Southwest boards faster, by far, than airlines using the standard pre-assigned method. That means less time sitting on the plane, or waiting to board the place. Also means less abuse of selling seat upgrades.

Anecdotally, boarding speed is not my major complaint - failing to secure an aisle seat, however, is.

Exactly!

Re: Southwest to Stop Overbooking as United Uproar Echoes

#109

Post by jfoutz »

ewanm89 wrote: post #53
jrockway wrote: post #44

Earlier quoted context omitted.

You're right that it's not intrinsically essential. To an airline, a flight that leaves with an empty seat is basically throwing money away; that empty seat doesn't mean you can take less fuel, fewer flight crew members, or wear out the airplane less. Therefore, the empty seat saves the airline no money. Furthermore, people often miss their flights. Overbooking is one way to deal with these two assumptions. Assume a…

Well, there is more fuel left in the tank, so there is less on the refill so yes it does save fuel, not much but it does save some. I prefer no refunds for no-show policy myself, that is how it works when I buy a ticket to see a play. Now refundable upto 48 hours before the flight might be even fairer.

Fuel is funny, because you keep some, but you're paying more by moving more mass. It's sorta like a special case of th rocket equation.

Re: Southwest to Stop Overbooking as United Uproar Echoes

#110

Post by Cyph0n »

pauldino wrote: post #93
amorphid wrote: post #84

Earlier quoted context omitted.

Southwest flights aren't that cheap unless you book in advance. And they used to (still might?) have a very flexible refund policy. You could not show up for a flight, never call, and still get a full credit for the value of your ticket to any other Southwest flight in the next 12 months w/ no penalty. I really like Southwest.

They've restricted it slightly: now you have to notify them at least 10 minutes before the flight. But still no penalties - I really hope they don't have to do away with that policy since that's the main thing I like about Southwest.

That's still better than most other airlines. I'll definitely be considering SW from now on. I'm assuming they only do domestic flights?
Post reply on HN