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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

#41

Post by [deleted] »

nanis wrote: post #32
Bahamut wrote: post #31

Earlier quoted context omitted.

This reminds me of a flight I booked about 3/4 a year ago from SF to DC - I had a suboptimal layover in Houston, which was rerouted to be a layover in Chicago after the hurricane triggered changes to my routing. Unfortunately for the airline, it then had to deal with a situation where they overbooked by 10 people. I was offered a first class seat on a direct flight + $600 to switch, which I happily accepted. In truth…

> I would’ve been happy with just any seat on that direct flight. And, the goal of the Volantio is to collect data on you so that the airline never over-compensates you. That is, all the benefits from the rebooking transaction accrues to the airline. Imagine every time you went to buy a coffee, the coffee shop charged you exactly how much you value the next cup of coffee.

[deleted]

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

#42

Post by mbesto »

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…

> The current state of duopolistic airlines technology suppliers means that there may not be sufficient motiviation to evolve the capabilities of the old systems.

So then what is the motivation to change this now? This seems like simple economics to me.

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

#43

Post by heisenbit »

Maybe I'm cynical here but any technology that allows safer overbooking will be used to squeeze more bookings on a plane again increasing the risk of upset passengers and PR disasters. Markets lead to exploring boundaries and the boundary to overbooking is the willingness of the company to suffer the consequences. That willingness is cultural and will not be changed by technology.

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

#44

Post by bogomipz »

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…

>"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."

Just to recap the "Dr Dao United Airlines" incident mentioned in the article - United airlines had a passenger forcibly removed from a flight for not agreeing to give up his seat for off-duty United employees.[1]

The reason the doctor wasn't interested in giving up his seat was because he had patients to see. I think that meets most people's criteria of "malevolence."

https://www.economist.com/blogs/gulliver/2018/04/david-dao-a...

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

#45

Post by nanis »

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…

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, point-to-point oriented ‘low cost’ carrier (Southwest)

> Six much smaller carriers, each with less than 5% of the market

> - Three smaller, primarily hub-oriented carriers (Alaska, jetBlue, Hawaiian) > - Three much smaller point-to-point travel merchandisers, heavily reliant on ancillary fees, so-called ‘ultra low cost carriers’ or ‘ULCCs’ (Spirit, Frontier, Allegiant)

The main legacy are the huge health care and retirement obligations. Baumol (1982) discussed the airline industry as an example of a contestable market[3]. Free entry & exit no longer applies.

[1]: https://www.nytimes.com/2009/12/22/business/22passengers.htm... [2]: https://www.eyefortravel.com/revenue-and-data-management/us-... [3]: https://econpapers.repec.org/article/aeaaecrev/v_3a72_3ay_3a...

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

#46

Post by elbasti »

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 could even take a cut of every transaction!

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

Imagine instead a world where you could buy and sell plane tickets.

- On purchase, I could set a reserve price for which I'd be willing to sell my plane ticket, and have the price go up as the time of flight got near.

- Late to the airport--perhaps I could trade tickets with someone on a later flight that wants to leave sooner?

- I have a flexible lifestyle. Standing order for tickets to the beach|family|wherever at a low price, as long as I have 5 hour warning before flight time. Gonna miss your flight? I'll buy it.

Let the airlines take a cut of every secondary transaction and let app developers & market makers figure out the use-cases.

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

#47

Post by fricat1ve »

monksy wrote: post #23
sjg007 wrote: post #22

Earlier quoted context omitted.

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)

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.

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

#48

Post by toomuchtodo »

nanis wrote: post #45
bogomipz wrote: post #36

Earlier quoted context omitted.

>"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…

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.

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

#49

Post by vannevar »

intopieces wrote: post #38
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…

Your solution means higher ticket prices overall, which consumers have repeatedly indicated they do not want. Most people don’t get bumped from flights. Most people don’t want to pay x% more to see their family once a year.

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 changing cost increase.

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

#50

Post by bogomipz »

nanis wrote: post #45
bogomipz wrote: post #36

Earlier quoted context omitted.

>"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…

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 legislation was in response to unreasonable practices by the airlines in the first place. I'm not sure why it is even relevant here.

>"The main legacy are the huge health care and retirement obligations" How is this relevant to discussion about the practice of intentionally overbooking?

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