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Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

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Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#21

Post by vannevar »

cybrjoe wrote: post #18
vannevar wrote: post #15

There's a much simpler solution to the overbooking problem: eliminate the fraud exemption that airlines currently enjoy, allowing them to sell the same seat twice. The downside is that, if airlines are unable to resell unused seats, more flights will fly partially empty, reducing overall efficiency of the industry. But if they offer standby "tickets" at steep discounts (instead of making every ticket a probabilistic…

Don't all airlines already sell standby tickets? I'm guessing the demand on the average flight isn't enough to cover the chance someone won't show.

If demand were too low for standby tickets, the flight wouldn't be in danger of overbooking in the first place.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#22

Post by sjg007 »

jorvi wrote: post #20
wpietri wrote: post #12

A good start, but I think this could be taken much farther. If we look back 20+ years, we built up very strong rituals around scheduling because we couldn't make the system work any other way. But in-person plans have become much more dynamic as we become better connected. Air travel is still very much in the old world there: we book far in advance, slotting ourselves into fixed-schedule, fixed-capacity options, even…

Tickets should also be liberated from being person-bound. If I have to cancel a NL-CHN trip a week in advance, I lose most (if not all) of the money spent on it, and any recoups are in the form of vouchers. And the airline still resells the seat! However, if I could just sell the ticket on the secondary market, I’d recoup most of my costs.

You could do that in the past but airlines didn’t like it for the reason you mention.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#23

Post by monksy »

sjg007 wrote: post #22
jorvi wrote: post #20

Earlier quoted context omitted.

Tickets should also be liberated from being person-bound. If I have to cancel a NL-CHN trip a week in advance, I lose most (if not all) of the money spent on it, and any recoups are in the form of vouchers. And the airline still resells the seat! However, if I could just sell the ticket on the secondary market, I’d recoup most of my costs.

You could do that in the past but airlines didn’t like it for the reason you mention.

The airline doesn't like it because it enables ticket arbitraging. (That's the reason they're fixed to your name) Also for tracking (err security.. but that's not really their fault)

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#24

Post by Fenn »

wpietri wrote: post #12

A good start, but I think this could be taken much farther. If we look back 20+ years, we built up very strong rituals around scheduling because we couldn't make the system work any other way. But in-person plans have become much more dynamic as we become better connected. Air travel is still very much in the old world there: we book far in advance, slotting ourselves into fixed-schedule, fixed-capacity options, even…

This. (Disclosure: I'm cofounder/CTO of Volantio). Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's.

It may be worth mentioning that airlines are perhaps less-evil than is apparent from the outside. Most of their baffling behaviour is (IMHO) largely due to lack of capabilities rather than malevolence.

Ultimately, they're given a large multi-dimensional optimisation problem in a marketplace with extreme illiquidity (eg: traditionally, seats can't be resold effectively once purchased).

The complexity is, frankly, staggering - the seminal paper on the topic is probably this: http://www.demarcken.org/carl/papers/ITA-software-travel-com...

We are taking the (very small) initial steps in alleviating some of the issues by introducing increased liquidity into the market, but the ultimate goal is helping shift the industry into a more dynamic place (perhaps as described by the parent comment).

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#25

Post by mc32 »

nanis wrote: post #13

The title is a polite way of putting it. In reality, what they are backing is a startup which claims that the data they gather will allow airlines to gobble all consumer surplus by being able to offer compensation equal to the reservation price of the customer: I.e., the compensation that leaves the passenger indifferent between flying on this flight vs giving up their seat. I am going to claim that the airlines back…

As an aside, some have proposed a mechanism derived from this method as a way to fix congressional redistricting.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#26

Post by tyingq »

Fenn wrote: post #24
wpietri wrote: post #12

A good start, but I think this could be taken much farther. If we look back 20+ years, we built up very strong rituals around scheduling because we couldn't make the system work any other way. But in-person plans have become much more dynamic as we become better connected. Air travel is still very much in the old world there: we book far in advance, slotting ourselves into fixed-schedule, fixed-capacity options, even…

This. (Disclosure: I'm cofounder/CTO of Volantio). Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's. It may be worth mentioning that airlines are perhaps less-evil than is apparent from the outside. Most of their baffling behaviour is (IMHO) largely due to lack of capabilities rather than malevolence. Ultimately, they're given a large multi-dimensional optimisation pro…

"Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's."

Personally, I find this common observation off base. Most airlines have pushed the legacy TPF layer into a sort of nosql data store. Both Sabre and Amadeus have been able to pull the business logic out of TPF.

Any sort of lagging technical progress seems more related to either thin margins, or the complexity you point out.

There's certainly room for innovation and improvement. I just hate the framing of the problem being tied to "old systems". It is mostly not true. Varies per airline, and res system, of course.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#27

Post by Fenn »

nanis wrote: post #13

The title is a polite way of putting it. In reality, what they are backing is a startup which claims that the data they gather will allow airlines to gobble all consumer surplus by being able to offer compensation equal to the reservation price of the customer: I.e., the compensation that leaves the passenger indifferent between flying on this flight vs giving up their seat. I am going to claim that the airlines back…

The game theory is indeed complex.

> offer compensation equal to the reservation price of the customer

It's a little more complex than this. It's highly feasible to offer compensation higher than than the original purchase price of the ticket while inducing passengers to move to a different flight, meaning they're effectively being "paid to fly".

In many cases, customers are actually not on their preferred flight in the first place, but merely the one that was cost-optimal at time of purchase.

Changes in market demand in the intervening 3-6 months can easily mean that many passengers on an aircraft can be compensated above their original purchase value to move to their preferred flight.

The above case is an idealised version, but the equilibria is complex and difficult to intuit without experimentation (which is primarily what we're working on).

More news as it happens :)

Sameless self-promotion (I'm cofounder/CTO): We're also hiring (https://angel.co/volantio/jobs / https://www.workatastartup.com/directory/270)

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#28

Post by Fenn »

tyingq wrote: post #26
Fenn wrote: post #24

Earlier quoted context omitted.

This. (Disclosure: I'm cofounder/CTO of Volantio). Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's. It may be worth mentioning that airlines are perhaps less-evil than is apparent from the outside. Most of their baffling behaviour is (IMHO) largely due to lack of capabilities rather than malevolence. Ultimately, they're given a large multi-dimensional optimisation pro…

"Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's." Personally, I find this common observation off base. Most airlines have pushed the legacy TPF layer into a sort of nosql data store. Both Sabre and Amadeus have been able to pull the business logic out of TPF. Any sort of lagging technical progress seems more related to either thin margins, or the complexity you point…

Sorry, I possibly stated that poorly - what I meant was: The current state of duopolistic airlines technology suppliers means that there may not be sufficient motiviation to evolve the capabilities of the old systems.

Case in point: Regardless of whether Sabre/Amadeus have replaced their legacy layer with some sort of nosql, I can absolutely guarantee you that many of their primary APIs are literally screen-scraping terminal sessions and returning the screen as XML.

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#29

Post by nanis »

Fenn wrote: post #27
nanis wrote: post #13

The title is a polite way of putting it. In reality, what they are backing is a startup which claims that the data they gather will allow airlines to gobble all consumer surplus by being able to offer compensation equal to the reservation price of the customer: I.e., the compensation that leaves the passenger indifferent between flying on this flight vs giving up their seat. I am going to claim that the airlines back…

The game theory is indeed complex. > offer compensation equal to the reservation price of the customer It's a little more complex than this. It's highly feasible to offer compensation higher than than the original purchase price of the ticket while inducing passengers to move to a different flight, meaning they're effectively being "paid to fly". In many cases, customers are actually not on their preferred flight in…

> It's a little more complex than this. It's highly feasible to offer compensation higher than than the original purchase price of the ticket while inducing passengers to move to a different flight, meaning they're effectively being "paid to fly".

> In many cases, customers are actually not on their preferred flight in the first place, but merely the one that was cost-optimal at time of purchase.

You misunderstood.

The original purchase is no longer relevant. The airline and the passenger are now in a new game. In this new game, the passenger has a reservation price. Your goal is to estimate that accurately to transfer all surplus from rebooking to the airline and to another passenger.

The passenger is not harmed by this per se. They are indifferent between taking this flight vs taking the compensation and flying on another.

However, in the real world, people don't really like being driven to their reservation prices in your quest to assign all surplus from this new transaction to the airline and a third party.

This is not a new idea. Priceline comes to mind.

You could have chosen to work on a decent auction application for this purpose. Instead, you choose to collect data that is unnecessary to solving the actual "overbooking problem", but has the benefit not leaving any surplus from the rebooking transaction to the passenger.

PS: Just as a side note, I tend to be very understanding when things go wrong when I fly: http://www.flyertalk.com/the-tarmac/the-2013-tarmac-awards.h...

Re: Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking

#30

Post by tyingq »

Fenn wrote: post #28
tyingq wrote: post #26

Earlier quoted context omitted.

"Airlines are very much currently burdened with a legacy that was cemented in sometime in the 50's." Personally, I find this common observation off base. Most airlines have pushed the legacy TPF layer into a sort of nosql data store. Both Sabre and Amadeus have been able to pull the business logic out of TPF. Any sort of lagging technical progress seems more related to either thin margins, or the complexity you point…

Sorry, I possibly stated that poorly - what I meant was: The current state of duopolistic airlines technology suppliers means that there may not be sufficient motiviation to evolve the capabilities of the old systems. Case in point: Regardless of whether Sabre/Amadeus have replaced their legacy layer with some sort of nosql, I can absolutely guarantee you that many of their primary APIs are literally screen-scraping…

"I can absolutely guarantee you that many of their primary APIs are literally screen-scraping terminal sessions and returning the screen as XML"

True, but TPF is scalable enough that it doesn't matter. The API is responsive, flexible, and handles the traffic. The ugliness isn't limiting new functionality, etc.

We spend very little time talking about the cruft at the bottom. The business complexity is more important.

Things like fare classes, discount codes, availability, fare basis codes, reaccommodation, and so forth. If it were all written in rust or Go + microservices it wouldn't be any more straightforward.

Your product seems to confirm that. You aren't reducing that screen scraping any. But you're adding value.

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