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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

#101

Post by bogomipz »

URSpider94 wrote: post #94
bogomipz wrote: post #68

Earlier quoted context omitted.

>"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…

Airlines would be willing to do this if all tickets were 100% non-refundable, non-exchangeable, no excuses. But, that would be a terrible experience for customers. Imagine if you missed your flight, and were informed that you had no choice but to pay for another ticket. Movie theatres can do this because the $12 loss of missing a movie is annoying, but not life-changing, and the social contract is that event tickets…

>"Airlines would be willing to do this if all tickets were 100% non-refundable, non-exchangeable, no excuses. But, that would be a terrible experience for customers. Imagine if you missed your flight, and were informed that you had no choice but to pay for another ticket"

In the US all three big carriers - American, United and Delta all charge $200 to change non-refundable tickets.[1]. Any you pay the fare difference if any on top of that. So there's already a hedge in place.

[1] https://www.forbes.com/sites/alexandratalty/2015/07/20/dont-...

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

#102

Post by bogomipz »

ryanwaggoner wrote: post #80
bogomipz wrote: post #68

Earlier quoted context omitted.

>"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.

>"If a significant fraction of people won’t show up ."

I think its safe to say that there isn't a "significant fraction" of people who don't show up for their flights.

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

#103

Post by bogomipz »

tyingq wrote: post #93
bogomipz wrote: post #92

Earlier quoted context omitted.

>"Most airlines have pushed the legacy TPF layer into a sort of nosql data store." Sorry what is TPF here?

The legacy IBM mainframe OS that powers the base layer for most airlines, and also things like credit card transactions. It's completely different from the most prevalent mainframe OS (zOs/MVS). https://en.m.wikipedia.org/wiki/Transaction_Processing_Facil... Think of it like nosql. High transaction rates, and high contention. Great when used for it's strengths, terrible otherwise. Close to bare metal, and hard to mat…

Oh interesting. Thanks for the link. I guess I always just assumed it was some old IBM 360 series. Cheers.

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

#104

Post by URSpider94 »

bogomipz wrote: post #101
URSpider94 wrote: post #94

Earlier quoted context omitted.

Airlines would be willing to do this if all tickets were 100% non-refundable, non-exchangeable, no excuses. But, that would be a terrible experience for customers. Imagine if you missed your flight, and were informed that you had no choice but to pay for another ticket. Movie theatres can do this because the $12 loss of missing a movie is annoying, but not life-changing, and the social contract is that event tickets…

>"Airlines would be willing to do this if all tickets were 100% non-refundable, non-exchangeable, no excuses. But, that would be a terrible experience for customers. Imagine if you missed your flight, and were informed that you had no choice but to pay for another ticket" In the US all three big carriers - American, United and Delta all charge $200 to change non-refundable tickets.[1]. Any you pay the fare difference…

Yes, but they don’t usually charge you this fee if, e.g. you miss a flight.

Additionally, that $200 fee comes nowhere near covering the lost revenue if you change flights a day in advance of departure and that seat isn’t re-sold.

I hope you can see that a last-minute change (even with a nominal fee) means the plane takes off without a paying butt in that seat.

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

#105

Post by bogomipz »

URSpider94 wrote: post #104
bogomipz wrote: post #101

Earlier quoted context omitted.

>"Airlines would be willing to do this if all tickets were 100% non-refundable, non-exchangeable, no excuses. But, that would be a terrible experience for customers. Imagine if you missed your flight, and were informed that you had no choice but to pay for another ticket" In the US all three big carriers - American, United and Delta all charge $200 to change non-refundable tickets.[1]. Any you pay the fare difference…

Yes, but they don’t usually charge you this fee if, e.g. you miss a flight. Additionally, that $200 fee comes nowhere near covering the lost revenue if you change flights a day in advance of departure and that seat isn’t re-sold. I hope you can see that a last-minute change (even with a nominal fee) means the plane takes off without a paying butt in that seat.

If you miss your flight due to a delay by the airline such as missed connection then you will not pay this penalty. If you miss the flight because you overslept or got stuck in traffic then yes absolutely will pay this penalty. You will have to pay this fee at the counter in order to be rebook. I also wouldn't call $200 plus any change in fare for the rebooked flight "nominal."

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

#106

Post by wpietri »

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…

No, those are your morals. And you're projecting them on to everybody. "Just plain fucked up" is another way of expressing your personal values, not a rational argument.

I get that you value the "but we had a deal" criterion for fairness above the other things people value in this situation. Which is fine! You do you. And I agree that forcible removal is a bad idea that we should ban.

But booking so that the airplane will probably be full and paying people to wait a bit when statistics make it overfull is something that the great majority of the public is fine with. Flexible people like it quite a bit.

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

#107

Post by wpietri »

bogomipz wrote: post #102
ryanwaggoner wrote: post #80

Earlier quoted context omitted.

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.

>"If a significant fraction of people won’t show up ." I think its safe to say that there isn't a "significant fraction" of people who don't show up for their flights.

The fraction is obviously significant to the people trying to make sure airplanes are fully utilized, so this seems like a word game to me. People miss flights all the time.

A brief look for stats doesn't turn up hard data, but TechCrunch has it at ~5%:

https://techcrunch.com/2017/04/11/overbooking/

Someone who worked in ticketing for two airlines says it's 2% for flights to hubs, and 5-8% for flights from hubs, because of missed connections:

https://www.quora.com/What-percentage-of-people-who-check-in...

According to IATA, a good year for airline industry profits is circa 5%:

http://www.iata.org/pressroom/pr/Pages/2016-12-08-01.aspx

So even if we take the lowest fraction, 2%, filling those seats represents 40% of the profit margin. That sounds pretty significant to me.

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

#108

Post by vannevar »

tetrazine wrote: post #65
vannevar wrote: post #49

Earlier quoted context omitted.

The percentage increase in price shouldn't be any greater than the percentage probability of getting bumped from a flight, which as you point out, is relatively low. If every hundredth seat is overbooked on average, then you've got 101 passengers for 100 seats. If they all paid $100, then you could offset the lost revenue from the 101st passenger by charging the remaining passengers $101 each. Not exactly a game chan…

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped. This rate is very high and makes overbooking valuable. The difference in cost includes both the relatively low bumping rate and the relatively high missed/cancelled flight rate. Many routes make very little revenue per flight (not per passenger) after overhead - at times in the hundreds of dollars, if I recall correctly - a…

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped.

Based on personal experience, I doubt this is true. Ask yourself how many times have you done this? I've flown hundreds of times, but have only missed a handful of flights. So the collision rate should be very close to the actual overbooking rate.

I haven't been able to find any figures on the actual rate of overbooking. But I did see a statement that 11% of bumps are involuntary. And the overall rate for involuntary denial is 0.09% according to this article, for instance: https://www.ft.com/content/e4cb5744-1e9d-11e7-a454-ab0442897....

That suggests that the overall rate of overbooking collisions is around 0.9%, which is close to my overbooking estimate of 1%. Even if I'm off by an order of magnitude, the impact on fares would be no more than 10%.

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

#109

Post by vannevar »

mseebach wrote: post #69
vannevar wrote: post #49

Earlier quoted context omitted.

The percentage increase in price shouldn't be any greater than the percentage probability of getting bumped from a flight, which as you point out, is relatively low. If every hundredth seat is overbooked on average, then you've got 101 passengers for 100 seats. If they all paid $100, then you could offset the lost revenue from the 101st passenger by charging the remaining passengers $101 each. Not exactly a game chan…

Overbooking != Bumped passengers Most of the time, by a large margin, all of the passengers who show up for a flight get on it. That's the premise for overbooking, for any given flight, some number of passengers don't show up (including for reasons like missed connections, which the airline still have to fix). Sometimes, though rarely in the grand scheme of things, too many passengers do show up, and bumping is neces…

Indeed. See my reply to @tetrazine below: it appears that 90% of bumps are voluntary. But per my original comment, the rate of overbooking is quite low, and legally eliminating it should not have a big impact on fares.

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

#110

Post by mseebach »

vannevar wrote: post #108
tetrazine wrote: post #65

Earlier quoted context omitted.

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped. This rate is very high and makes overbooking valuable. The difference in cost includes both the relatively low bumping rate and the relatively high missed/cancelled flight rate. Many routes make very little revenue per flight (not per passenger) after overhead - at times in the hundreds of dollars, if I recall correctly - a…

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped. Based on personal experience, I doubt this is true. Ask yourself how many times have you done this? I've flown hundreds of times, but have only missed a handful of flights. So the collision rate should be very close to the actual overbooking rate. I haven't been able to find any figures on the actual rate of overbooking. Bu…

You're just assuming overbooking away on a single, personal anecdote. Here's mine: I fly a lot on flexible tickets, and in periods have "missed" almost every flight I was scheduled on. But even your experience works out to about 1% missed flights (order of magnitude on "handful"/"hundreds"). If that pans out as average, then airlines should overbook each flight by a couple of seats, and expect to have to bump very few. "Just not overbooking" then amounts to removing a couple of seats from every flight. Only focusing on bumping completely misses this aspect.
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