Why Airlines Are Allowed to Over-Sell Seats?

tooblue on 13/04/2017 - 00:40

Have any one of you encountered these situations:

The restaurant say: Sorry we oversold your table and do you mind coming back tomorrow for your anniversary dinner?
The theater says: Sorry we oversold your seat and do you mind coming back one year later when the orchestra returns?
The stadium says: Sorry we oversold your seat and do you mind watching Broncos vs. Bulldogs next week instead of Broncos vs. Cowboys Derby?
The seller says: Sorry I oversold my house despite you already paid me in full. Do you mind waiting till I am selling again and I will give you a discount?

But why is airlines industry so special that can make overselling as their standard procedure? Of course cancellation and alteration happens all the time. But no other industries are inconveniencing customers in order to reduce the cost.

Travel

Comments

  • [Deactivated] on 13/04/2017 - 21:22
    +5

    Friend works for Tiger Airways at Sydney. Put the question to her recently and she gave me some interesting stats.

    On average 5% of all seats on flights are no shows on a full flight ratio. Every route is different, flights from Sydney have a higher rate if no shows than a flight from Perth. That's excluding those silly people who roll in late, which sits about 3%. Then there are a small bunch who miss the boarding time. The airline will also take into account the second leg of the booking, if you have not made the first leg there is a high chance you won't make the second so will open up a seat.

    180 seats, 5% =9 seats
    Late people 3% = 5 seats

    Really don't see the issue here, it's all about how it's handled. Wave $500 in front of my face I'll be more then obliged to get off.

    I had my last return trip to Perth funded from Jetstar vouchers from taking an overbooking offer. Waiting 3hrs for the next flight saved me $500 in a flight To Perth that I needed later in the year.

  • thechemist on 13/04/2017 - 22:13
    +1

    If you are Diamond Marco Polo Club member for Cathay Pacific you are GUARANTEED a ticket as long as booking is made 24 hours before the flight. The rich and powerful run by their own rules

    • slewis69au on 16/04/2017 - 08:37

      LOL - i think you'll find frequently flyers and business people are Diamond Marco Polo Club Members. The rich and powerful are on private aviation, trust me you would rarely see any of the 1% on commercial aviation.

  • nuno on 13/04/2017 - 22:21
    +1

    Overselling is quite common but should be banned. It's double dipping by the airlines as cancellations are forfeited and paid in full.
    Imagine they oversold tickets at the footy and ppl where barred from entering the gates holding legitimate tickets.

    All hell would break loosed.

    Yet airlines can get away with it offering measly compensation in return. " Here is your voucher and a discount code for your next flight, sir. Now EfOff and let the high rewards member through."

    • [Deactivated] on 13/04/2017 - 22:55
      -7

      How is it quite common?
      What evidence do you have?
      What research have you done?
      What first hand experiences have you had?

      • ronnknee on 14/04/2017 - 10:21

        Overbooking is pretty standard in the airline/hotel industries. Part of revenue management ie. earning the most amount of money from selling the same products/services.

        • moonphase on 18/04/2017 - 19:13

          It's part of risk management but never seen people do this because they have to accommodate the customer at last minute.

          Also, this was not overbooking at all. They admit that they had to push the customers away for the staffs whom needs to be get on other flight services.

    • moonphase on 18/04/2017 - 19:10

      In that theory, you get paid for not able to enter. This is bit different. You already got in to the stadium and got the seat but later they announce that they need some seats for the staffs for the next game, have to random pick and ask to leave.

      Offers generally occurs on the counter not after seated and they even lied in the beginning. This is not overbooking but just kicking off the customers over their staffs after on board. That is the first place they failed. Second was how they have handled the situation, if that was must for them to get that 4 seats, they should pay more to make people cannot resist to volunteer. Lastly, if the situation went this wrong, whether that is not your airline staffs injured the customer, you would expect to say sorry for what happened. Instead, that airline CEO just picks the line which sounds like "it's not our fault but the customer but feel little bit sorry that we have to kick you out from the plane". That's not how you say sorry.

      I honestly don't care about random pick up if that happened on the checkout. Also, not to mention it is much easier to convince the customer. Why they couldn't do that? Because they wanted to put their staffs on the last minute. What I don't get is, if this is for what they have done wrong and so desperate to make the seat, why not offer more? It clearly seems that US 800 was not enough and they could bump it up to US 1350 by the regulation anyway.

  • Krizy on 14/04/2017 - 00:42
    +3

    (eyeroll) The flight wasn't overbooked, they had a seat for every passenger. The airline needed to get staff to the next city for their shifts. Overbooking is quite common in the U.S., not sure about in AU. In the U.S. there are laws around overbooking that allow airlines to do it if they follow certain procedures around who will be given priority in boarding and providing compensation to those that bought a ticket but aren't allowed to board. Overbooking is a good thing. This wasn't overbooking. Even if it was overbooked, they let the man board and then put the beat down on him for not 'volunteering' to give up his seat. I'd rather get mugged than have this happen; it'd be safer.

    • Windows98 on 15/04/2017 - 15:07

      Before 9/11 airline staff would be seated in the cockpit in this situation. Not anymore.

      The terrorists won.

    • moonphase on 18/04/2017 - 19:15

      This!

      I don't know why people is keep saying "overbooking" is fair so United is ok. It was never overbooking at all.

  • field1985 on 14/04/2017 - 07:51
    +1

    Why Airlines Sell More Seats Than They Have:
    https://www.youtube.com/watch?v=EqWksuyry5w&t=0s

  • thatonethere on 14/04/2017 - 13:34
    +2

    I found this write up quite interesting analysis of the situation

    http://www.nakedcapitalism.com/2017/04/united-passenger-remo…

  • mjjeje on 14/04/2017 - 18:05

    Overselling is quite common back in the days (in my experience) in the mid 90s, I often got bump up to business class because there's no more seat in economy class. Never happen post 2000, I guess they've remanaged their booking system/policy.

    • moonphase on 18/04/2017 - 19:19

      They still bump you to business. You are true that they have better system to not overbook especially on international flights. However, it still happens and you do get free upgrade if they have rooms to do that. I think they have some algorithm based on fare + frequent flyer status + if you have been upgraded recently for similar reason (to not give you again in the short term)

  • neonlight on 15/04/2017 - 18:49

    Bet you are asking cause of United Airlines.

    They deserve to be out of business after being extremely violent to the innocent doctor and he is Asian background, next thing people will stir up is races etc

    • slewis69au on 16/04/2017 - 08:33

      More noob Social media rage BULLSHIT.

      United weren't violent to anyone. They called the police to help them remove a non compliant passenger. Did they handle that poorly? You bet they did, see my previous posts i don't love united. Did the police handle a struggling screaming non compliant crazy person poorly (STOP IT he was doing all of that BEFORE he was even touched, i am sick to death of people saying "he was injured" "he was concussed") - yes they did, they should be better trained.

      Asian is irrrelevant, were the other three people selected in the lottery to get off the plane minorities or an ethnic group other than white? I don't know but i guess not (i have tried and i can't find them, they are not news because they accepted the situation with grace and got off the plane) otherwise more would be being made of it now.

      Learn the facts, learn the FTA rules the airlines operate under and THEN make informed comment.

      There is plenty of blame to go around here, but at least some of it goes to the passenger.

      And the whole Asian thing? Go look up some passengers behaving badly on Chinese Domestic airlines videos - if he did what he did in China either he, the crew or the police would have been beaten up badly by the rest of the passengers!

      • shaybisc on 17/04/2017 - 10:22

        Hysterically resisting removal from a tight space is likely to result in injury, in my medical opinion.

  • katekate1 on 21/04/2017 - 22:41

    We can just hope that the incident like this never happens again.
    I agree to the fact there should be some laws regarding this!

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