United Part 2: Misconceptions and realities

There’s a lot of bad information circulating on the famous United/Republic “passenger drag” so I wanted to consolidate a 2nd post with some of them.

Myth: This was an oversold flight

It turns out the flight was probably not oversold. A UA spokesman said it wasn’t. It was a fully sold flight, but a sudden need arose to move 4 flight attendants to SDF (Louisville) and they arrived at the gate after the flight had boarded. In United’s contract of carriage, it defines an oversold flight as a flight where there are more passengers with confirmed reservations checked in by the check-in deadline than they have seats on the plane. That does not appear to be the case on this flight, but Republic and UA got confused about it.

That, in turn, means Republic did not have the right to invoke the clauses of the contract for oversold flights. If so, they are just plain in the wrong, and this becomes a case with far less interesting nuance. United has changed their tune (of course due to public pressure) and are going full mea culpa.

Airline reservation computers oversell all the time, and carefully calculate exactly how much to oversell. It looks like the algorithms decided to not oversell this flight. And they were right — when they called for volunteers, nobody accepted, even at a very high price ($800 to $1,000) for a flight where most tickets are under $200. The algorithms performed perfectly.

Myth: This was United Airlines

Technically it was Republic Airline, a small regional airline dba “United Express.” However, United sells and and manages the tickets and they use the brand, and it’s under United’s contract, so United certainly gets a lot of the responsibility. And I am impressed that UA has not tried to throw Republic under the bus here.

Republic Airways actually operates lots of regional flights for United, AA and Delta, so this could have probably happened to any of them. I don’t know if they have a lot of airline specific training on bumping procedure for their teams. United may have just gotten some very bad luck of the draw here — and then made it worse by defending it at first. And it may be that the bumping policies UA gives to Republic might have made this more likely than the ones Delta and AA give it, but I don’t think they are tremendously different. Some hinges on whether the flight crew was a Republic crew, or a United crew.

But still, though it was not United, the buck stops with United, and at least now, they are not resisting that at all.

Myth: On an oversold flight, they can pull passengers off the plane.

If this had been an oversold flight, their contract still does not let them remove passengers from the plane involuntarily. It says they can “deny boarding.” Deny boarding does not mean remove — there is another section of the contract on removal. More bad news for United/Republic, but again, it makes the case less interesting as it’s an example of something you sort of expect — junior employees of a regional affiliate not being properly trained on what to do in an unusual situation and thus screwing up. That happens in 100 different ways all the time, but each particular incident is rare and probably does not indicate a systemic problem. That’s good — but it is only systemic problems that are of interest to the public, and which would make you boycott a company. If the junior employees make mistakes like this too often, then you have a systemic problem to worry about. (United does not have a good reputation on this count, of course.)

Update: These flight attendants were “must ride” passengers

New information reveals the flight crew declared themselves “must ride.” I don’t have a lot of details, but this is a special designation in the law (not the UA contract) which declares the crew are needed somewhere to avoid cancellation of a flight. Once a passenger is declared “must ride” the plane is required, reports say, to do everything possible to get that passenger to their destination, including delaying the plane and apparent, yes, even involuntary bumping. I am waiting for more information on this status, which would invalidate partly what I say above. They can’t pull you for an oversell, but they may be able to pull you for a must-ride. The law is there to keep the aviation system humming. Once flight crews don’t get to flights, it can mean disruption to more than just that flight.

Myth: If the doctor had just handed one of the police officers a Pepsi, it all would have been defused.

No, but that’s the best joke on this that I’ve seen.

Myth: It’s overselling that’s the problem

With the mistaken impression that overselling was the cause here, a lot of people are stating overselling is evil, and Chris Christie has even called to prohibit it. That’s a big mistake. Overselling is very good for airlines and the flying public. I explained that in yesterday’s post but I will go into more details below. You want an airline that does at least some overselling, though one can debate how much you want.

Myth: The airline prioritized employees over paying customers

In this situation, it needed to move those employees to crew a flight first thing out of SDF. If they had not gotten a crew there, that flight gets cancelled. Roughly 70 paying passengers get stranded against their will. While clearly nobody wants to be stranded against their will, the hard truth is you want to fly an airline that will strand (with good compensation) 4 people to avoid doing it to 70. (Here I am talking about the normal approach, which is to deny boarding to 4 people, not to try do drag people off the plane.) Still, I have to view it as prioritizing 70 passengers over 4, not employees over passengers.

Maybe: They could have driven the flight attendants there or chartered a jet

This is possibly true but possibly not. First of all, these airlines are all about procedure. They don’t authorize junior employees to be innovative or authorize them to spend money. So chances are if somebody thought of that, they had no system with which to do it. That is a fault of the airline but the sad norm of corporate bureaucracy.

Secondly, while I don’t know this to be true, all flight crew operate under a set of complex rules about required rest. You don’t want a sleepy pilot landing your plane, or a sleepy flight attendant helping people get onto the evacuation slides. These rules are very hard and fast. I suspect trying to sleep in a car doesn’t count, and an overnight ground ride is out of the question. Had they acted very quickly, and had a system in place, they could have probably gotten the crew there a bit after 11 — not long after the flight actually landed due to the chaos — so that might have worked, in hindsight.

They could have offered the passengers a limo ride, but again probably had no way to do something that out of the ordinary.

The same applies to an air charter. Getting an air charter on short notice is difficult, but they could have gotten one for the flight crew (or another flight crew) in the early morning if they had a system in place. This is very expensive of course, and so not likely to be in their playbook.

Maybe: They should never have gotten to the point where it was so urgent to get that flight crew moved

Airlines move flight crews a lot. There are airline pilots who live on one coast and mostly work on the other, commuting by “deadheading” on one of their airlines planes.

When you design a system that needs various parts — planes and flight crew — you have to “overprovision,” which is to say leave some wiggle room. That means you have some number of planes, crews and other resources sitting idle or on call, and you use them when something else fails. Everybody does it because you don’t want to run so close to the wire all the time. If you do, the slightest problem causes a cascade of cancellations. Airlines have to worry not just about small problems but even big ones like storms that cancel or delay many flights.

It’s not practical, however, to overprovision to the point that you never fail. You can do it, but it’s really expensive. You have to waste a lot of money, and you don’t have a competitive company. So every systems designer tries to figure out how to overprovision just the right amount. An amount that will have a few failures, but not too many. On top of that, you try to plan so you handle those failures with the least amount of pain, but you accept they will still happen.

What that means — and I don’t have any specific facts about this flight — is that sometimes you will be skating the edge, and sometimes you will fail. Sometimes you will find that crew are not going to make a flight unless you do something a little extra.

The bumping law, I think, is where the airlines find their “extra.” They don’t want to bump paying customers — it’s expensive and hurts customer relations. But they don’t want to cancel flights even more. So every so often, every airline has to find a solution. The bumping law offers them that solution. They can legally deny boarding to paying passengers against their will to make room for crew. This is much more workable, and under their control, than other options like using charter jets, or if distances are short, ground service.

True, but: Just about anything would be cheaper than the hit they’ve taken

That’s true — but only in hindsight. No playbook for these situations is going to say, “If you have to, spend $10,000 rather than bumping passengers just in case it turns into the PR nightmare of the year.” By definition, nobody knew that would happen.

In reality, airlines involuntarily bump 50,000 pax per year and while they grumble, this is the first time it’s ever gone done like this, with eviction from the plane, blood, camera phones and Facebook. So I don’t blame them for not seeing this could happen. I do blame them, however, for not understanding that any time you bring the police into a situation you bump the risk of something bad happening.

True, but: They should have known this would happen once they called the goons.

They should have known, but I can suspect why they didn’t — because they actually do this all the time and don’t have PR problems. Flight crews face unruly passengers reasonably often. They have training for it and procedures. And those procedures do call for getting the police, even knowing how that can go south. What those plans obviously did not account for was doing this when it was completely clear the passenger was the victim, that they only removed him because they wanted his seat. The rules for removing passengers mostly deal with safety issues. When they declare a passenger a safety risk, and the passenger makes trouble and even (rarely) causes a scuffle they are protected if the passenger was really a safety risk, or they can even come up with a credible lie why they thought he was a safety risk. No such story is possible here. Sure, the law says anybody who refuses a flight crew order can be removed from the plane. Technically it says this. In reality, it’s insane to think you can remove somebody for refusing the order “leave the plane” when the order is not given for a valid reason. The law says obey, but every sense of justice goes the other way. In fact, more than that, I don’t think a court would convict somebody for refusing that order, even if they are guilty, because society does not intend to grant the airlines that sort of power.

Put another way, three things are true:

  1. They can’t order you off the plane just to take your seat (but they didn’t know that.) We don’t want airlines to have that power.
  2. Once somebody refuses a flight crew order, you can then order them off the plane.

As such, it’s clear that “we removed him because he disobeyed our order to leave” is a loophole that would never stand up to scrutiny.

Myth: I should worry this can happen to me.

Well, I have to concede this is true — part of this did happen to me! The first flight I took with Kathryn, the airline came up to us after we had boarded, and insisted she give up her seat for a deadheading pilot. The pilot never sat there — instead he went up to use the jumpseat in the cockpit. We were quite angry, especially when her later flight lost an engine in the middle of the Pacific.

But a lot had to go wrong for this to happen. Here’s my guess as to the list of things that went wrong:

  • Something failed in the planned movement of flight crew, and they needed to get a crew to SDF for a Monday Morning flight. They looked over their options, and decided to try to get on UA3411
  • They decided that very late, so the flight had already boarded full when the flight crew came to the gate and said they needed to be on that plane. (I don’t know why they selected this one over the next, I presume both were full, or the next one might even have been oversold. You want to avoid the last flight in any event.)
  • They tried the normal approach — offer an incentive for volunteers. They got to $800. (UA says $1,000.) It failed. Nobody bit. This is a flight where everybody needed to get to SDF.
  • They didn’t know their contract well, and decided they could do involuntary bump to solve their problem. Why not, it’s what they usually do, right? They got mean, declaring the plane would not fly until 4 got off.
  • They really didn’t know their contract well, and figured they could involuntary bump by removing passengers from the plane. They can’t, but they told people they had to leave.
  • Usually that works. In fact, I suspect it’s worked pretty much every time for decades. Not this time. One man refuses to leave. Now they had a passenger refusing flight crew orders.
  • A non-compliant passenger is something they are trained for. They follow their procedure. He won’t leave. They follow their procedure and call in airport cops.
  • The airport cops are thugs. They manhandle him, injure him and drag him. All recorded on camera phones.
  • It explodes on the social networks. The company has no idea how to handle it, and botches that too.

Because so many things had to go wrong, the particular situation is not important. Rare things go wrong all the time. Junior staff at small airlines are not fully trained on contract nuances. Because things had never gone south like this before (and not in the way the plane was supposed to literally fly south) nobody had ever thought to write up procedures to remind gate crews that they can’t remove passengers, and that they can’t bump at all if it’s not actually oversold.

Those of us writing so much about this online only really want to care about systemic problems. What is wrong with the system, not just one gate crew or flight crew. If there is a pattern of errors, what can be done to fix it.

Myth: That poor doctor!

I am hesitant to include this one, because I don’t want to give the impression that I am defending in any way what happened to him, but it is an important fact. I am not saying anybody should be forcibly removed from a plane because the airline wants his seat. This was not just your ordinary passenger. Reports claim Dr. Dao lost his licence to practice medicine from 2003 to 2016 because he was convicted of trading prescription painkillers for sex, and his psych evaluations listed him as having anger management issues. One reason this escalated is that normally nobody dares to defy orders from the flight crew and especially from police. The orders were improper, and the bumped passengers deserve lots of compensation, but you have to attribute some portion of the blame for how far it escalated to Dr. Dao.

So, is overbooking evil or good?

The big question I have found most interesting is the subject of overbooking. Almost all airlines sell more seats on a plane than it actually has. They give you what they call a “confirmed reservation” and that name certainly makes people imagine they have a guaranteed seat on the plane. They don’t, but they almost do, and that’s as I will explain, a good thing for the flying public.

One basic statistic — the no-show rate on flights is around 8%. So a plane with 100 seats, if it is considered “sold out” after 100 reservations. On average, with no overselling or standby pax, it would take off with 8 empty seats. The number is not the same for every flight. Complex algorithms predict the actual number based on history of that flight and the passengers.

Myth: The airlines primarily do this as a fraud to make money by selling the same seat twice

Turns out, when people don’t fill their seat, only rarely does the airline get any money, or a profit from them. Airlines do make money from overbooking, but not the way you think. Most of those no-shows are because of late or cancelled connections. Those are money losers for the airline, big time. They have to rush to find another flight for that passenger, and get no money. Some of them are people who did free same-day changes or otherwise switched off the flight for low fee. A few have tickets with no change fees. A few more did a late flight change and paid a change fee. The change fee is sometimes as high as the ticket, but sometimes it’s much less. The airline pockets the change fee, but not without cost — the biggest one being they turned away passengers they would not have turned away because of the booking.

A few passengers just don’t show and forfeit the entire ticket. But I can’t say I have done that very much in all the many times I have ended up changing a flight, and while I would like to see real stats, I suspect it’s a modest minority of no-shows.

Mostly true: The airlines just want to make more money

Of course they do. That’s no misconception. But as long as the market is competitive, extra costs get passed on to customers.
It’s in the interests of almost nobody for the flight to take off with 8 empty seats when more people needed to be on that plane. Pretty much everybody wants the system to be more efficient, and to have more total passenger capacity. It makes tickets more expensive for everybody to have those empty seats, and means there are more emissions per passenger. Admittedly, it sure is nice if you get an empty seat next to you in coach, but that comes with a cost.

Myth: Passengers get nothing from this except screwed

Even if filling up the planes with overbooking didn’t lower ticket prices or save emissions, the real benefit for the flying public is neither of these. It’s increased capacity. The airline flies 8% more passengers than it would have without overbooking. You want that capacity.

When you are shopping for flights, the flight you want might have 100 seats and have sold 100 tickets. What do you, the passenger want the airline to do?

A no-oversell airline will call that flight “sold out.” It won’t even show up in your flight search. You have to pick another flight, perhaps even another day. Which is a shame because that plane is 99.9% likely to take off with empty seats. A seat you could have been in at the time you wanted.

An overselling airline offers the flight, though usually only at a higher fare class. People who really want that particular flight can buy it. When it gets to 108% sold, they declare it sold out, and no longer offer it (except to certain elites and to deadheading flight crew.)

If they do this right — and that is not a simple if — it works like a charm. In spite of selling 108 tickets for 100 seats, everybody who shows up flies. Nobody even knows it happened. If your flight was truly full, this almost surely is what happened. 8 more people who really needed that flight fly when they needed to. Yes, the airline made more money.

If they overestimate by a small amount, they call for volunteers and offer them flight coupons. Flight coupons are cheap currency for the airline. A lot go unused, and even the ones that get used are retail dollars not real dollars. So for 90% of oversold slots on the average airline, the voluntary system works. Everybody is happy. Those who really needed to fly on that plane do, and those who wanted the reward get to enjoy it. Some people crave these rewards and even deliberately try to get bumped!

But there is involuntary bumping

In the old days, airlines would bump people and give them no compensation. The FAA stepped in, and set fees they would be forced to pay (in cash) if they involuntarily bumped people. This did something else. It put a ceiling on the voluntary offers. From a pure business standpoint, why would you offer $2000 in coupons if you can do an involuntary bump for $800? The only reason, as we see this week, is PR. It just might go sour.

Normally though, involuntary bumping is in the waiting area, not on the plane. In fact, legally it is supposed to be. And it only happens to the people who are least valuable to the airline. They don’t have elite loyalty status, and they bought the cheapest ticket. It’s a reality that customers who pay more get more, and one thing they get is not being involuntarily bumped.

The airlines have gotten good at this. Only 1 in 10,000 passengers faces an involuntary bump. You could fly 10,000 times and it would happen to you once. (Though strictly, if you fly 10,000 times on a higher priced ticket it will never happen, and if you fly on the cheapest ticket, it will happen much more to you, I would guess 10 times more but that’s just a guess of how many people paid the lowest fare.) One in 1,000 will do a voluntary bump, so again most people will never do it in their flying lifetime.

Still, the involuntary bumping law offers the airlines a ceiling. It offers them a solution to their problems. If they underestimated the people who would show, and can’t get volunteers, it gives them an maximum price. If they need to move flight crew, it gives them a way.

This has ended up bad for them, because with this tool in the toolbox, they have no need to make bigger offers to get volunteers if the legal offer doesn’t work. They have no need to put in other systems to move flight crew because they can always use this as a last resort if things go wrong. It’s a safety net.

And yes, it’s even a safety net for the public. If the airlines need to offer $5,000 for volunteers and that happens often enough, they pass that cost on to the flying public. In the end, we’re the ones who pay. Not a lot, of course, but some. More likely it will make them oversell less — which we may or may not want.

How much to oversell?

I think it’s hard to argue that one should not oversell at all, though some do. However, one can certainly argue how much airlines should oversell. Not in terms of percentage, but in terms of how often they get it wrong. They don’t use a fixed ratio. They try very hard to calculate it right, which is why only 1 passenger in 10,000 gets involuntarily bumped. They can improve that number by overselling a little less. But overselling less means telling a lot of people “the flight you want is sold out, even though our computer models predict it is 90% likely to take off with an empty seat.” The more they oversell, the more happy passengers who got the flight they wanted.The less they oversell, the more (but much smaller overall number) happy passengers were not bumped against their will, and the more passengers got an empty middle seat next to them. It’s a trade-off. The “big 3” of United, Delta and AA oversell more than some airlines (Notably Jetblue and Virgin which barely oversell) and less than some of the discount airlines.

An answer: Putting a cap on involuntary bumps rather than prices

While overselling is good for the flying public by effectively increasing the capacity of every flight, the idea that airlines also do it to make money is not false. That does give them an incentive to push it a litter farther than the optimal point for the public. If the government is to get involved, it might want to make only a minor adjustment in this direction. It might, for example, rather than put a price on an involuntary bumps, cap the number of them. The government might say, “You can’t involuntarily bump more than a moving average of 6 passengers out of 100,000” with some penalty if the number gets higher than that. This would cause airlines to either get better at predicting (which they already do) but also to slightly reduce their overbooking, if that’s what we want. It would cause them to increase voluntary offers. It would focus on the problem — involuntary overbooks — rather than public perception. It would make the involuntary bump be less of a catch-all solution to problems. It would be something to be saved for when it’s truly needed.

$800 is too low

If it is 1/10,000 then $800 cap is simply too low.

If it was uncapped and there is no other (legal) way of removing passengers, then the airlines will be forced to keep bidding up the compensation. At some point ($5,000? $10,000) somebody will bite.

Alternately the airline (if just trying to fly personnel around) might decide an alternate might actually be cheaper.

With roughly 90% of the flying public carrying video cameras in the pockets, with (while still in the gate) a direct LTE connection to FaceBook, Twitter etc, the airlines simply can't afford to act and be seen as thugs.

I rate this on a scale of 1 to 10 (with 10 being Tylenol Poisoning) as about a 7 or 8. Possibly worse than Samsung's exploding phones last year as most people didn't attribute malice to Samsung, while they see extreme malice in United's actions (as carried out by the local police.)

The fee

The fee for a long involuntary bump is 4x your ticket, max of $1350. On this short flight, most cheap tickets were under $200 and thus the $800 number.

Compare Delta to United

I think it's instructive to compare Delta and United. Delta overbooks more than United, but almost never involuntarily bumps a passenger.

Delta has figured out that it's not the overbooking that upsets customers, and not even getting bumped. It's getting bumped involuntarily. Delta is very aggressive about finding people willing to give up their seats for a price: when you check in to an overbooked Delta flight, they will ask you if you're willing to bid on giving up your seat. They also give their staff more discretion in offering extra money, food and hotel vouchers, etc.

However, all that said, the simple fact is that all supposedly "confirmed reservations" are effectively standby tickets in this era, because the airlines routinely sell more reservations than there are seats available and they retain the right to bump you to another flight solely because of their overbooking.

There's nothing wrong with that, but there is something wrong with selling these tickets as supposed "reservations" when they are in fact standby. If the airline wants to sell more seats for a flight than the plane can carry that's fine, but any seats subject to involuntary bumping should be sold and priced as standby.

Of course the airlines don't want to do this. They know that they can't sell a standby seat for as much as they can sell a confirmed reservation. But in my mind this is really a matter of truth-in-advertising: they need to be upfront about what the customer is buying and the limitations that come with it, and stop implying that a "reservation" on an overbooked flight comes with any sort of promise to actually travel on that flight.

Doing it better

Pretty obvious you could do it better, and Delta might be smarter.

Of course, this flight was not oversold, so it’s an interesting question what would have happened if Republic was running it as a Delta connection flight instead of United Express.

I don’t think it’s fair to compare confirmed reservations and standby tickets. With a confirmed reservation, it’s 99.99% you are not gong to be involuntarily bumped and get $1,000. On standby, it’s viewed as a 50-50 proposition, and 100% likely on an oversold flight you aren’t getting on with no compensation.

"Myth: On an oversold flight, they can pull passengers off"

Actually, they can pull passengers off the plane for lots of reasons, and you'd never know for sure if they were telling the truth. I've had to get off planes because of mechanical issues ("can't have anyone on board while we change a tire"), because of weight-and-balance issues, because they'd started boarding "too early" and decided everyone on board so far had to get back off and wait in the terminal. Any of those could have been used to get one or more people off the plane, and deal with it outside the plane... and yes, not let some of them back on.

prices not caps

You spent a lot of time thinking about this, so I'm puzzled that you don't come to the same conclusion that almost all economists come to immediately: raise the price of the payment until they find enough volunteers.

In addition to avoiding the use of force, or even violence, the price (or auction) approach will result in the person who has the lowest value for the seat (possibly including United!) being the one to give up access to the seat. Any lottery or other mechanism can and usually will lead to a person with a high value for the seat having to give it up, even when someone else could have done it at less cost. What's more, the operations research whizzes who optimize how much overbooking to do would quickly take into account the expected payments they need to make, and trade-off costs and benefits appropriately.

Why don't you advocate the market solution? Am I missing something?

This was part 2

(Answered Eric on Facebook, but repeating) that this post is part 2, and in part 1 this is the first and most likely solution and the one used by some airlines.

As noted, the issue is that because the law allows involuntary bump for 4 times the ticket price, this creates a strong financial incentive for the airline not to increase the offer to volunteers a great deal beyond that. (They should go moderately higher because volunteers get coupons, and forced-off get cash.)

This event will change that thinking. So far, the old system has worked for the airlines. They forced-off almost 50,000 passengers last year, never getting something like this, so of course they are going to say “let’s do the thing that works and is cheaper” than increasing the offer. It stopped working, obviously.

A more interesting question is, “Is there a benefit to the public of having a forced bump rule with a fixed price?” The general feeling is not, but one might consider it if one feels that extra costs to the airline are passed on to the customers. Then, you might imagine saying, “rather than have the airlines have to raise the offer to $10,000, if that price is really going to be passed on to the public, perhaps it makes sense for a law that means one of us will be paid less and forced off from time to time.” Of course, the money is part of it. A much bigger burden of a forced bump is that the passenger did not volunteer. They might be going to see a dying relative, close a $50,000 business deal or heading to their own wedding. It is not good to bump such people.

So by and large, eliminating force bump seems wise.

I can see some situations that could present a problem. Say the plane is leaving a disaster area or plague zone. Nobody will get off the plane for literally any price, in fear of harm if they stay. But also say that if some pilots can get on the plane — bumping passengers — they can come back with more planes to get hundreds more people off in a few hours, including those bumped. What is society’s interest here?

(Of course in that case the other obvious answer is to drop the safety rules and let the pilots stand, and in fact to even let other passengers stand.) But let’s say the danger is less real, and it’s just a panic. It doesn’t justify cutting the safety rules, but it does mean nobody will accept a voluntary offer. Rare cases, but just barely possible.


I think the issue that has gotten people so exercised in this case is one of fundamental justice. In this case, the idea that once you have bought something, it is your property, and it is unjust to have that taken away from you by the seller. Even if he offers you your money back, or more than your money back. (I know, an airline seat is a funny sort of a "piece of property", it's really the *right* to that seat that you end up possessing temporarily --- like booking a reserved seat in a concert or stage show.) Most of us are taught this at a very young age, and have it reinforced over and over again as we grow up, and organize much of your lives around this principle. A big part of it is that people who act unjustly are punished by agents of the state.

In this case, it was the agents of the state acting unjustly. Which is outrageous. Which is why all the outrage.

This blog posting, and the one before it, make good and reasoned economic arguments, about why there is a (small) economic good to be had (reduce flying costs on average by 8%, versus what it would cost if airlines were not permitted to overbook at all), in exchange for permitting an injustice. I think many people would think that's comparing apples and oranges --- justice and dollars are qualitatively different things.

Now, if someone *voluntarily* gives up their seat, then it's *them* making the decision to move this from a "justice" situation, to an "economic" one. Their possession is not being taken from them forcibly, they are in control of making that decision.

I suspect that most people would be entirely OK with a law that prohibited all airlines from overbooking their planes at all, even though it meant that all airplane ticket prices went up by 8% as a direct result. 8% is a small variation in price; we all routinely see much larger fluctuations than that in ticket prices, depending on whether you buy today or tomorrow. In return, you'd get the certainty that the airline had to treat you justly, which to most people would be more than worth it. (Of course, there are always flight delays and cancellations for reasons beyond the airline's control, but that's a different kettle of fish.)

Small economic good

While 8% cheaper tickets is actually a pretty big thing, and a huge thing when you look at typical margins, my main point is that this is not the value to the public, or just a small part of it.

You want overbooking because it means you get to buy a seat on a plane that would have taken off empty if you were denied the chance to buy it. And when somebody else buys and fills a seat on another plane, it means they don’t buy a seat on your plane.

When you go to buy a plane ticket today, you get a list of flights. Some are marked sold out. This means they are oversold to the limit. If there were no overselling, a lot more flights would be marked sold out. Some days all the flights would be marked sold out, even though all of them will take off with 8% empty seats in that world. You have to fly tomorrow, and for no reason but to avoid this situation one time in a billion. That’s not in passenger interest.


I agree that an 8% cost is huge, if you're unable to pass it along to your customer for some reason. E.g., if that cost is imposed on you, but not on your competitor. Because then your competitor's margin will be 8% better than yours, all else being equal, and he'll eat your lunch.

However, if such a cost is imposed on all players in the market, then 8% extra is just part of the cost of doing business, and basically ho-hum. For example, airlines' fuel costs fluctuate by much more than this some years, and they react by just raising their prices. (Strangely, they never seem to lower them again...)

But, as you say, that's not your main point: that the convenience of having more seats available at booking time is the real reason customers should like this.

I suggest this is self-correcting: that if airlines aren't allowed to over-book anymore, they'll end up simply laying on more flights. This is an extraordinarily competitive marketplace, which is quite capable of knowing well in advance pretty much exactly how many people want to fly a particular route at any time of the day, on any given day of the week/month/year. As long as they can capture their ticket money profitably, they'll lease more planes and make them available.

No matter what, any given customer is sometimes going to find that the specific flight she wants is full, when she gets around to trying to book it. Boo-hoo, shoulda booked earlier. And there're always alternatives available; sure, maybe not as convenient as your preferred direct flight, but pretty much always workable. I posit that the rate of this happening will be *exactly the same* if over-booking is outlawed.

The one argument you made earlier, that I *do* buy, is the one about reducing field consumption, and hence CO2 emissions. For sure, flying 12 full planes along some route, instead of 13 planes that are 92% full will end up spewing more emissions. (Not quite 8% more, because each plane is a bit lighter, and so burns a bit less fuel --- about 2% less, I reckon.) So, over-booking is indeed good for the environment.

Not that simple

In reality, if they add another plane, it flies at some other time. The problem is you don’t get to fly on the plane you want or need to fly, because it is “sold out.” But 99.9% of the time it will take off with empty seats. If there is only one flight a day (common for long haul flights) they can’t put on another plane very easily. You don’t fly the day you want — empty seats do. And this happens to 8% of passengers, rather than having 1 in 10,000 passengers not fly they day they want by rude surprise.

Yes, people would be willing to pay the money. Hell, I pay for business class sometimes to get more space. I understand that very well.

And no, airlines will never say “shoulda booked earlier” because the people who book late pay more, sometimes a lot more. They are the best customers of the airline. They are the ones that let the airline make money and sell all those cheap tickets which are very low profit. You want those guys on your plane, and you also don’t want them not allowed on another plane so that they take seats on the one you want.

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