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

#71

Post by bogomipz » Sat, Apr 14, 2018, 9:41 PM UTC

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.

Indeed and not that long it was very common to sell airline tickets you had purchase but could no longer use.

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

#72

Post by mseebach » Sat, Apr 14, 2018, 9:41 PM UTC

kwhitefoot wrote: post #66

As far as I can tell overbooking is an almost exclusively US phenomenon. In Europe I don't know of anyone who has been 'bumped' off a flight because it was overbooked. Low cost airlines like Ryanair manage to fill flights without overbooking. There is a lot to dislike about Mr O'Leary's company but I don't think anyone worries that their ticket is not going to be honoured.

Ryanair doesn't operate connecting flights, and they sell very few flexible or refundable tickets. These are the main opportunities for people to not make their flights, and thus for overbooking to be attractive.

A passenger not showing up is pure profit as Ryanair even gets to pocket the taxes, which are only payable on actually flying passengers (you can claim them back, but there's a substantial handling fee IIRC).

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

#73

Post by tysonzni » Sat, Apr 14, 2018, 9:42 PM UTC

elbasti wrote: post #46

There's already a well-proven technique for price discovery: it's called a _market_. But because there's no real market for airplane tickets--the airlines basically forbid secondary transactions--we're forced into a world of centralized planning, and by an entity that's fairly incompetent at that. This entire thing would be solved if plane tickets could be bought and sold in some sort of marketplace. The airlines cou…

Interesting idea. However I suspect that in such a secondary market most liquidity/volume would only exist last minute, making it less likely to improve yield optimization (for airlines) or consumer choice (for passengers).

It's baffling to me that the overbooking problem is solved at the airport, minutes before take-off.

Think about how excess seats usually come about: a passenger doesn't show up because of some unforeseen circumstance which occurs last minute. By the time that passenger decides they can't make the flight, it might be too late to generate sufficient demand for that ticket. Potential buyers of that ticket have to be packed and ready to go. And where do we find those people? At the airport.

The population of people who are super flexible in both destination and time is probably not sizable enough to generate enough volume in a secondary market.

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

#74

Post by kelnos » Sat, Apr 14, 2018, 9:44 PM UTC

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.

I'm sympathetic to the ban on ticket transfers since allowing that would create a market for ticket scalpers. Buy up inventory on a popular route well enough in advance so the prices are low, wait until the flight fills up, and then resell tickets for a higher price.

This is what currently happens with tickets to music and sporting events, and you end up with actual attendees spending more money than they'd otherwise have to pay, while random predatory third parties pocket the difference.

I met someone a couple years ago who admitted to me that she was essentially a professional ticket scalper, buying up tickets to shows she knew would become popular and would be able to make a profit on. She was careful to purchase in a way that was unlikely to get flagged by Ticketmaster's (and other's) systems to detect this sort of thing, and always stayed under ticket maximums and avoid shows where transferring tickets is harder to do. She was actually supporting her entire lifestyle doing this, without having another job. I found it pretty gross. I don't want to see this happening with airline tickets as well.

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

#75

Post by madeofpalk » Sat, Apr 14, 2018, 9:44 PM UTC

tysonzni wrote: post #67

kwhitefoot wrote: post #66

As far as I can tell overbooking is an almost exclusively US phenomenon. In Europe I don't know of anyone who has been 'bumped' off a flight because it was overbooked. Low cost airlines like Ryanair manage to fill flights without overbooking. There is a lot to dislike about Mr O'Leary's company but I don't think anyone worries that their ticket is not going to be honoured.

Low cost airlines like Ryanair manage to fill flights without overbooking. Presumably the reason why US airlines overbook is to maximize yield since almost always some passengers don't show up. Any reason why non-US airlines don't do the same? I suspect it has to do with ticket regulations but would like to learn more.

These flights are still full though

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

#76

Post by mseebach » Sat, Apr 14, 2018, 9:44 PM UTC

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.

I've never seen standby tickets on sale in a first order way. Usually, it's when you're on a rebooked or connecting flight, they'll offer you standby on a better (but sold out) option.

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

#77

Post by kelnos » Sat, Apr 14, 2018, 9:47 PM UTC

monksy wrote: post #64

foepys wrote: post #59

Earlier quoted context omitted.

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.

Which both situations are made worse by locking in the consumer and preventing them from backing out of the transaction.

I've never completely understood why this was the case. If I'd be theoretically capable of finding a friend (or even complete stranger) to sell my plane ticket to if I found I couldn't travel, then it should be equally easy for the airline to do so. And yet, refundable fares are often significantly more expensive than non-refundable fares.

I can certainly understand and support some kind of monetary penalty for breaking out of a reservation, but it seems like airlines err too far on the side of making you think twice before canceling or changing your plans after the initial 24h window is up, and penalizing you heavily if you end up doing so.

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

#78

Post by madeofpalk » Sat, Apr 14, 2018, 9:48 PM UTC

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?

Airlines are very interesting companies that have a difference sense of economics. Mainly though, outsourcing is core to their business at every level - booking systems and the rest are externally provided, flights are outsourced (code sharing), consultants + contractors + agencies for as long as the eye can see. Hell, even the lounges aren’t ran by the company (they’ll be outsourced to a hospitality company).

Adding on an additional technology provider is nothing out of the ordinary.

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

#79

Post by mseebach » Sat, Apr 14, 2018, 9:53 PM UTC

ggm wrote: post #63

The investment by non-US carriers intrigues me, because there is no significant overbooking problem worldwide: its a mostly US phenomenon as I understand it. The rebooking-because-cancelled, thats a huge problem anywhere. So, I suspect the JV partners are looking to benefits for unexpected surge loads and overflow from late/dropped flights in a tight jet schedule.

I think it's a media attention thing. Flights are overbooked all over the world, and people get involuntary bumped. I just did a couple of searches for "[lufthansa, british airways, qatar, emirates] overbooked", and it's not exactly unheard of. It's a relatively rare event, though, but one that caught US media attention due to the pretty gruesome removal of Dr Dao last year (which wasn't even an overbooking incident).

There's also the factor of the uniquely dense and complex nature of the US domestic network. More flights with more connections make for more uncertainty in the system, to which overbooking is an answer.

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

#80

Post by ryanwaggoner » Sat, Apr 14, 2018, 9:59 PM UTC

bogomipz wrote: post #68

hueving wrote: post #51

Earlier quoted context omitted.

>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…

>"Don't project your morals onto the rest of us" I'm not projecting "my" morals onto anybody. Intentionally overbooking and knowing full well that you are going to bring inconvenience and stress to people is just plain fucked up. That's not really a grey area. If you bought a ticket to a movie and then were asked to leave the theater before the movie started in order to make room for someone else who bought a ticket…

If a significant fraction of people won’t show up AND a significant fraction of those who do show up will have flexible plans and be happy to take a later flight, “overbooking” seems a lot more reasonable.