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dlpoole

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dlpoole
June 15, 2010 2:59 pm

Bumping compensation should apply to all carriers because of the increasing use of regional carriers to serve smaller markets and their no lesser disruptiveness and potential expense to the traveler.

Passengers may lack check cashing privileges away from their home airport, yet face unplanned and likely elevated expenses after being “bumped.” They should have a mandatory option of cash payment. An credit card credit, if immediate, would be more secure and as useful to more passengers than either a check or cash.

The proposed compensation limits are too low to provide an incentive to the airlines to limit overbooking and may be arbitrarily unfair to certain travelers. The Wall Street Journal recently re-proposed a 1977 proposal by the late economist Julian Simon of an auction… more »

…that would offer bumped passengers a gradually rising reward for giving up their seat. The arguments are rather compelling. See the WSJ, June 8, 2010, “Auctions for Overbooking” or http://online.wsj.com/article/SB10001424052748703303904575293011757655060.html « less
dlpoole
June 19, 2010 12:56 am

The airlines will overbook so as to optimize their financial results under any given set of caps, so some passengers will still be involuntarily denied boarding on overbooked flights.

An auction will more accurately price the delay and the sellers (the delayed passenger(s)) will be left with no complaint that it was involuntary. An auction would also force the carriers to face the cost of overbooking in customer dissatisfaction and better inform their flight scheduling decisions.

I recall hearing seats being auctioned by progressive increases in the promised compensation by gate agents, but that was long, long ago and under far greater seat availability and lower probabilities of cascading delays and subsequent denials of boarding for those who took the compensation. Those procedures were… more »

…surely regulated by DOT, (perhaps when the industry was more heavily regulated,) so perhaps those earlier rules should be revisited. « less
Moderator
June 15, 2010 6:23 pm

Thank you for your insightful comment and alternative suggestion. With regard to your comment on the caps, what do you think would be a better amount, in your opinion to limit overbooking, or, if as you say the auction scheme is a better alternative, how do you think the DoT should go about implementing and enforcing such a system for the airlines?


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