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Overbooking Flights: a Very Simple Solution to a Very Complex Problem

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Passengers waiting in line to board a Singapore Airlines flight at Hong Kong International Airport. Photo Credit: Accidental Travel Writer

Airlines and Aviation

Should the U.S. Congress and legislative bodies in other countries ban the overbooking of airline flights? An analysis of a complex problem and a very simple and equitable solution.

 

United Airlines has come under some well-deserved criticism for its brutal manhandling of a passenger it wanted to remove from a flight because his seat was needed by an off-duty employee.

Many consumers and passenger advocates have asked why airlines are allowed to overbook flights in the first place. 

If United Airlines Flight 3411 from Chicago O’Hare to Lewisville, Kentucky, only had 70 seats how could the airline be allowed to sell more than 70 tickets?

Are airlines a law onto themselves? Can they really do whatever they want? Unfortunately, the answer in many ways is yes.

First an analysis of the problem, then a proposal for very simple and very equitable solution.

Common Practice

Actually, the overbooking of flights is a common practice by airlines all over the world, but still ...

But problem is usually sorted out before passengers  actually board the plane.

In this case, not only had passengers already boarded the plane. It has transpired that the flight had not really been overbooked, contrary to what United Airlines initially said.

In fact, four airline employees had showed up at the gate after passengers had boarded the plane and asked for seats so they could get to work the following morning.

Otherwise the flights they were scheduled to staff would have to be canceled, or so the airline said.

What If Scenario

Already this raises questions as to whether these employees could not have been flown on another airline (which could have been achieved with the very steep discount U.S. airlines offer each other in such situations) or even driven to their destination in Kentucky. It was only a four to five hour drive.

Why the need to commandeer the seat of an unwilling passenger that had not only paid to sit in that seat - he had already boarded the plane and had done nothing wrong?

Let me propose a "what if" scenario: What would have happened if the employees had not been dependent on boarding that flight to make it to work the next day?

What would have happened if instead one of them had woken up with the flu and called in sick the following morning?

Would the airline have cancelled the flight the employee was scheduled to work on? Or would the airline have called in a replacement?

Surely airlines, like other companies, have contingency plans for dealing with employees that can’t make it to work. Sort of like the contingency plans they have for passengers that don’t show up for flights ...

But I digress.

No Shows

The reason why airlines overbook flights – and the reason why governments allow them to do so – is because many passengers book flights and don’t show up for them. Such passengers are called “no shows”.

Passengers can fail to show up for a number of reasons: a change in plans, a missed connection, bad weather, getting caught in traffic – the list goes on.

But it’s not always owing to circumstances beyond a passenger’s control that they don't show up for a flight. Some passengers deliberately book two or more flights to give themselves flexibility.

When I was working in New York in the early 1980s, I discovered that many companies routinely booked executives on two or more flights – usually on different airlines – “just in case”.

Giving Executives Flexibility

Sometimes this was “just in case” they got caught in traffic or missed their connection. But it was usually more about giving their executives flexibility.

“If everything goes according to plan, Mr. So and So can take the first flight he is booked on,” the companies thought.

“If the meeting takes longer than expected, or if something else happens, he can always catch the second flight or even the third flight.”

So in a way, airlines overbook flights to deal with passengers gaming the system. 

In whatever case, airlines have come up with ways to estimate how many no shows there will be based on past performance, and this varies substantially from route to route, day to day, time to time, and season to season.

It also varies from airline to airline.

Major Hubs

The number of no shows tends to be higher at major hubs such as Atlanta Hartfield International Airport, Chicago O’Hare International Airport, and Dallas/Fort Worth International Airport than at so-called "destination" airports for two reasons.

First, the overwhelming majority of passengers at such hub airports are transit passengers, and Dr. David Dao, the passenger that was brutally dragged off a United Airlines flight in Chicago, was one such passenger.

He and his wife were returning from a vacation in California to their home in Kentucky, changing planes in Chicago.

The thing about transit passengers is that they often miss their connections at the hub because the flights they were flying into the hub on were delayed or cancelled.

Unlike the executives double- and triple-booking flights, this is a legitimate case of "beyond the passenger's control".

Various Alternatives

Secondly, major cities such as Atlanta, Chicago, and Dallas/Fort Worth often have competing airlines, alternate airports (Midway in Chicago and Love Field in Dallas), and other modes of transportation such as intercity buses and trains that travelers can fall back on.

What’s more, if distances are not far, sometimes travelers decide to drive to their travel destination rather than flying. So the number of no shows at major hubs tends to be higher than at other airports.

The number of no shows tends to be lower at so-called "destination" airports, where there are fewer transit passengers.

The number of no shows is especially low at smaller airports, where there are no viable alternatives. Often, only one airline plies the route – and there are no buses or trains that the passenger could take.

Complicated Analysis

Based on a complicated analysis of the number of likely no shows on a given flight, airlines oversell the flight by so many seats.

And most of the time, they get it right. There are exceptions – all too many exceptions. But these exceptions are usually taken care of at the gate before passengers board the plane.

It starts with a request for volunteers, who are offered some sort of compensation - usually in the form of flight vouchers and free hotel stays.

I've known of people that actually arrive at the airport late in the hopes of getting bumped from a flight in order to score the vouchers!

Recommended: Why You Should Reconsider Accepting a Flight Voucher>>

If there aren’t enough volunteers, the airline raises the amount of compensation. If there are still not enough volunteers, the airline resorts the arbitrary denial of boarding based on such factors as ...

  • Membership in a frequent flier programme;
  • Status of membership in the frequent flier programme;
  • How much the passenger paid for his or her ticket;
  • When the passenger checked in.

Thus, a passenger that is a member of the airline’s frequent flier programme with elite status, who paid full price for a first class ticket, checked in early, and was one of the first passengers to board the plane would probably not be bumped.

In theory, but not always in fact ... Check out what happened to another United Airlines passenger the day after the passenger was dragged off a plane in Chicago.

United Airlines Threatens First Class Passenger

Geoff Fearns of Los Angeles, President of TriPacific Capital Advisors, purchased a full-fare, First Class ticket to fly from Lihue Airport on the Hawaiian island of Hawaii to LAX, paying US$1,000.

After being seated and served a complimentary glass or orange juice, a United Airlines employee rushed onto the plane and told Geoff he would have to disembark.

Like Dr. David Dao, who was dragged off the plane in Chicago, suffering serious injuries in the process, Geoff stood his ground and refused to forfeit his seat.

He was told that United had a "priority list" and there was someone "higher on the list" than he was, and if he didn't get off the plane, he would be taken off the plane in handcuffs!

Would that be considered blackmail? All because he had the audacity to purchase a First Class ticket at full price on United Airlines?

He is threatened not only with forced removal from the plane, but also with public humiliation?

In the end, Geoff was downgraded to Cattle Class and seated between an arguing married couple that refused to sit next to each other.

He had to listen to them argue throughout the six hour flight from Hawaii to California.

Just an Unpleasant Experience?

After consulting a lawyer, Geoff contacted United Airlines, requesting a full refund on his ticket. The airline apologized for the "unpleasant experience," but refused to refund his money for the First Class ticket.

Eventually, the airline offered to refund the difference between the price of a First Class and a Cattle Class ticket - and a flight voucher worth US$500.

Refunding money for a service that was not offered is hardly compensation for the inconvenience and humiliation Geoff suffered. He should not have even had to ask for that refund. It should have been automatic.

Shouldn't Geoff also be entitled to compensation on top of the refund to make up for the extreme inconvenience he had to endure?

I mean, what is the point of splashing out for a full fare, First Class ticket if you can arbitrarily be downgraded to Cattle Class at the whim of the airline?

Recommended: Are Flight Vouchers Worth the Paper They Are Printed on?>>

Need for Transparency

Airlines are not always transparent in terms of how they arrive at their decision to refuse carriage to one of their passengers.

United was certainly pretty vague about its decision to boot Mr. Dao from his seat. Was he randomly chosen, as the airline at first maintained? Was he chosen by a computer based on some obscure algorithm? Or did staff get in a huddle and arbitrarily decide on who the unlucky victim was going to be?

In whatever case, being arbitrarily bumped from a seat you paid for seems pretty unfair. No one that has a confirmed reservation on a flight with a ticket that has been paid for in full should be denied passage on that flight for the mere convenience of the airline or one of its employees – or even one of its “preferred” customers.

Is Legislative Action Needed?

Airlines have proven themselves unable - or unwilling - to sort this problem out on their own. Is it time for the United States Congress to act?

No shows are a problem that needs to be dealt with, but that does not give airlines the right to oversell flights. And the solution to this problem is actually quite simple.

All that needs to be done is this: airlines should not be allowed to sell more tickets than there are seats on a plane.

It should be against the law.

When that number seats is reached, passengers wanting to book seats on that flight should be informed of this fact and asked if they would like to either be put on a waiting list or fly to their travel destination on a stand-by basis.

Whether or not airlines want to offer discounts for waiting list or stand-by passengers is up of them.

No Fine Print!

But the process should be transparent. Passengers purchasing such tickets should be made aware in no uncertain terms that their passage is not guaranteed. This should not be hidden in the fine print.

Passengers should be told up front how many people are ahead of them on the list. And they should be able to update that information in real time, allowing them to make alternate travel plans if the need arises.

Most importantly, passengers should not be forced to pay for their ticket until available space has been secured. Otherwise airlines might be tempted to charge a fee for wait-listing a passenger - or removing a passenger from a wait list.

Problem solved. It’s that simple. Write your congressman or other legislative representative now.

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