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Sunday, April 23, 2017

Involuntary denied boarding - right or wrong?

For 35 years I've been a frequent flyer. Not once have I been denied boarding because of an oversold condition, much less been chosen involuntarily to "de-board" (what a word!). Three reasons why I've avoided this:
  • My status in frequent flyer programs. Airlines go out of their way not to anger their most frequent flyers.
  • People flying on business usually pay high fares because they buy their tickets on short notice. When administering an oversale, airlines often sort passengers based on how much they paid for their tickets: lowest priced, first off.
  • I avoid booking a flight if no advance seat assignment is available — an indication of a possible oversale. Although holding a seat assignment is no prophylactic against misfortune, holding a reservation without a seat advancement (except on airlines like Southwest that don't offer preassigned seats) is asking for trouble. By the way, Southwest does oversell.
Nevertheless, IDB (Involuntarily Denied Boarding) happens to other people and someday it may happen to me.

It's easy to criticize the airlines for overselling, but think about it. People who hold reservations sometimes don't show up at the last hour for a variety of reasons. Often times it's business people whose schedules get screwy; we rebook our flights at the last minute. Sometimes people traveling for personal reasons like vacations become ill or have a flat tire or don't arrive early enough at the airport to complete check-in and screening. No doubt, airline employees who work at ticket counters have heard 10,001 explanations, most of which are probably truthful, for missing a flight.

An airline could choose the most conservative policy to never, ever oversell. (For many years JetBlue took this approach; I don't know whether they still do.) The statistically likely consequence would be unused seats on flights. Some people wanted to travel on those not-full-at-departure flights, but a strict policy never to overbook would force them onto other flights instead. Those are silent inconveniences that you'll never hear about.

Furthermore, airlines run on relatively thin profit margins. They make their money with volume. On a 150-seat airplane, the difference between carrying 140 passengers and carrying 150 is often the difference between profit and loss for that flight. Why are airline margins so tight? The Southwest effect. Twenty years ago when Southwest was still an insignificant factor in the airline industry, ticket prices were relatively high and "load factors" — the average percentage of seats sold — could be as low as 60% for an airline to make money. Now ticket prices are relatively low, and filling an airplane is more important. Oversales help the airlines offer low fares. The government could absolutely prohibit overbooking, but the effect would be higher ticket prices. Is that what you want? Maybe, maybe not.

The attitude of the government has been that the free market should sort this out. The government does set minimums for IDB compensation, and the government does publish the rates at which each airline has IDBs. ("Involuntarily" means the gate agent could not buy cooperation by offering vouchers or, in the most rare of circumstances, hard cash.)

Let me make two other points. You might think your seat is safe after you've boarded, but actually your seat is not safe until the airplane leaves the ground. I've seen planes pull away from the gate, taxi, return to the gate, change passengers, and then leave the gate again. It happens, although seldom.

Lastly, an airline reserves the right to put its own employees on a flight and to remove you to make room for them. This can happen even when a flight has not been oversold. To illustrate, assume that 100 people board a plane that has 100 seats. There was no oversale. Suddenly and unexpectedly a replacement pilot is needed in the city that the flight is destined for. The airline has the authority to remove a passenger so that the pilot can take that seat. This happens every day, but usually the airline induces someone to relinquish a seat voluntarily. If incentives don't work, however — on the day before Thanksgiving, incentives don't — fewer people overall might be inconvenienced by denying boarding to one person.

Can this be abused? Definitely. A poorly run airline can find itself short a crew member simply because of the airline's own incompetence. And there's always the possibility that the CEO of the airline bumps a paying passenger. But think twice about eliminating an airline's flexibility to put its own employees on a flight that has no empty seat.

The last word: avoid United. American and Delta treat their customers better.