Airlines Are Backing Volantio (YC W09), a Startup That Could Fix Overbooking • Hacker News Board

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

#51

Post by hueving » Sat, Apr 14, 2018, 7:31 PM UTC

bogomipz wrote: post #36

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." Which legacy exactly are they "burdened" with? The airlines in US were deregulated in 1980s. The airlines look nothing like they did in the 1950s. The regulatory regime is gone, there's "power by the hour", fuel futures etc. >"Ultimately, they're given a large multi-dimensional optimisation problem ..." Yes and the a…

>You are simply enabling airlines to continue this unethical practice

Don't project your morals onto the rest of us. As a frequent flyer who likes to travel I love this practice. It means lower prices overall and it gives me the opportunity to fly for free somewhere else later if I volunteer out. With the switch to real cash compensation on some airlines, I can even make money if I don't feel like using it to fly.

I have flown over 2 million miles in my lifetime and I have never seen someone forced to give up their seat. The airlines always enticed people to volunteer out with (sometimes significant) compensation.

United behaving like assholes with their forced removal is indicative of their behavior, not the practice of overbooking.

I'm fine with increasing required payouts for forced removals to deal with piss poor airlines that don't conduct an auction until volunteers are found, but banning the practice outright is throwing the baby out with the bathwater due to ignorance of the practice.

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

#52

Post by hueving » Sat, Apr 14, 2018, 7:32 PM UTC

toomuchtodo wrote: post #48

nanis wrote: post #45

Earlier quoted context omitted.

These days, it's not the legacy. It is mostly regulation pushed by Chuck Schumer[1]. Predictably, the policy has made it much more profitable to outright cancel flights at the first sign of trouble. Add to that the consolidation that occurred since then, we are left with: > Four carriers with over 80% of domestic capacity: > - Three large, hub-oriented, global legacy carriers (American, United, Delta) > - One large,…

The US airlines industry is a public utility that attempts to operate (poorly) as private corporations.

Not quite because adding new companies and routes is significantly easier than laying new utilities.

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

#53

Post by jptman » Sat, Apr 14, 2018, 7:41 PM UTC

tyingq wrote: post #3

atanasb wrote: post #2

While this is a step in the right direction it just serves to show how far behind airline companies are in terms of tech. Swapping out passengers on the fly and handing out virtual miles in exchange is seen as "innovative technology"? Hopefully this will pave the way for technological disruption in the airline business.

That's a broad brush. Airlines aren't all at the same point in dealing with overbooking. It's also not a trivial issue given the slim margins and complexity. Consider connecting flights, different fare types (refundable or not, advance purchase, etc). Also, differing aircraft types, how many seats they have, and which crews are qualified to fly them. Oh, and weather. If you think the root cause is "airline IT is inco…

I'm not sure I'd call it "failed commercially at solving booking". Google stopped their work on creating a booking system after the acquisition since they were never interested in getting into booking.

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

#54

Post by chx » Sat, Apr 14, 2018, 7:42 PM UTC

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…

> traditionally, seats can't be resold effectively once purchased

That's not tradition, that's self imposed to make yield management work. If you could just buy a ticket at its cheapest and sell whenever you want then yield management would collapse.

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

#55

Post by nanis » Sat, Apr 14, 2018, 7:42 PM UTC

bogomipz wrote: post #50

nanis wrote: post #45

Earlier quoted context omitted.

These days, it's not the legacy. It is mostly regulation pushed by Chuck Schumer[1]. Predictably, the policy has made it much more profitable to outright cancel flights at the first sign of trouble. Add to that the consolidation that occurred since then, we are left with: > Four carriers with over 80% of domestic capacity: > - Three large, hub-oriented, global legacy carriers (American, United, Delta) > - One large,…

>"These days, it's not the legacy. It is mostly regulation pushed by Chuck Schume" The OPs comment was that the airlines were burdened by legacy from the 1950s. Mr Schumer's legislation is quite recent. Additionally the legislation "Passenger Bill of Rights" is quite reasonable - let your customers off the plane after 3 hours of delay. It's pretty easy to avoid that penalty. It's also worth pointing out that legislat…

So-called "Passenger Bill of Rights" takes away options from passengers[1].

    "We found that for every minute of tarmac time being
    saved there is, on average, a three-minute increase in
    the total passenger delay," said Vikrant Vaze, an
    assistant professor at Dartmouth's Thayer School of
    Engineering who co-authored the study.

    Adopted in 2010, the Transportation Department rule
    requires that passengers be allowed to deplane within
    three hours of boarding or landing for domestic
    flights. Airlines are subject to fines of up to $27,500
    per passenger for violations.

    Hoping to avoid fines, airlines have been quicker to
    pull the plug on flights, Vaze said. That forces
    passengers to scramble to find another flight to reach
    their destination, something that has become
    increasingly difficult as industry consolidation
    reduces the number of available seats on planes.
    Flights that are not canceled have to start lining up
    anew after letting passengers deplane and then reboard,
    adding to the ultimate delay.

    "Most of these extra delays are being felt by those
    exact same passengers," Vaze said. "It's just that
    they're not on the tarmac."

[1]: http://www.chicagotribune.com/business/ct-tarmac-delays-0105...

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

#56

Post by URSpider94 » Sat, Apr 14, 2018, 7:48 PM UTC

nanis wrote: post #29

Fenn wrote: post #27

Earlier quoted context omitted.

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. T…

Part of the issue they are trying to solve is that the optimal pricing problem is overlaid with a currency exchange problem. Airlines can compensate customers with vouchers, upgrades, cash or frequent flier miles; as well as different commitments for rebooking. Each customer is going to have a different value for each of these axes. Learning about passenger preferences will help airlines to make offers that are most appealing to individual passengers.

Ultimately, operating a rebooking system near the Nash equilibrium is great for everyone. People who really need to get from A to B on time have a higher chance of doing so, people who are flexible can trade that flexibility for compensation, and the airlines can operate at higher capacity and sell more high-dollar last-minute seats.

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

#57

Post by toomuchtodo » Sat, Apr 14, 2018, 7:50 PM UTC

hueving wrote: post #52

toomuchtodo wrote: post #48

Earlier quoted context omitted.

The US airlines industry is a public utility that attempts to operate (poorly) as private corporations.

Not quite because adding new companies and routes is significantly easier than laying new utilities.

It barely ever turns a profit over the long term was my point.

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

#58

Post by icebraining » Sat, Apr 14, 2018, 7:59 PM UTC

acqq wrote: post #14

rahimnathwani wrote: post #5

I'm surprised that airlines wouldn't/couldn't build this functionality themselves. Does anyone here have insight into the 'buy vs. build' decision that any of these airlines went through in adopting this company's services?

Here the possibility to say “not our fault, it’s this other company that made an error” when something goes wrong also has some significance.

Didn't work for United.

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

#59

Post by foepys » Sat, Apr 14, 2018, 8:01 PM UTC

fricat1ve wrote: post #47

monksy wrote: post #23

Earlier quoted context omitted.

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)

There was a story that checking ID's on plane tickets was at the top of the airlines lobbying wishlist after 9/11 so they could curtail the practice of people selling unused tickets to another (same gender) person.

If you look at the current situation of the market for concert/festival tickets, you can see why this isn't so bad for consumers.

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

#60

Post by adrianmonk » Sat, Apr 14, 2018, 8:20 PM UTC

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…

Probably an issue, but I'm wary of concluding it would be the dominant factor in such a complex situation.

Passengers will probably also guess that offers are being extended to others on the same flight, and they may feel they need to accept the offer ASAP if they don't want to lose it. Psychologically, limited time offers are powerful. (Maybe powerful enough for passengers to let themselves off the hook on greed punishment, if that is the underlying factor in the Ultimatum Game.)

Or maybe we can just say that Nash equilibrium doesn't apply here? A Nash equilibrium requires all players to know all other players' decisions/strategies, and in this game the passenger does know the airline's decision and their own decision, but they are in competition with other passengers whose decisions they don't know.