How much is your seat worth?
United Airlines has finally agreed to pay a decent sum of money to passengers willing to give up their seats in an overbooking situation
The position of United Airlines on the subject of overbooking airline seats gets more curious by the moment. Reacting in panic to a recent public-relations disaster (the manhandling of Dr. David Dao, who refused to give up his seat on an overbooked flight), the airline now claims it will pay such passengers up to $10,000 for voluntarily leaving future flights.
Of course, no one expects United (or any other air carrier) to ever pay as much as $10,000 to future cooperative passengers.
Those of us who have encountered overbooked situations, as I have, will recall that all sensible airlines adopt a much simpler policy: If a flight is overbooked, they conduct something of a reverse auction, providing an ascending list of payments to people who will help out the airline by leaving the flight — and nowhere near $10,000 is required.
Who among us would fail to give up our seat (for a later flight) if we were offered a few thousand dollars for doing so? Why United failed to reduce the number of flight passengers during the David Dao incident is a mystery — and one explained by the frequent blindness United Airlines has shown with respect to customer service. A smart airline
starts the reverse auction with a proposed payment, then raises the price a few hundred dollars or so at a time until it finds a passenger willing to accept the reward for helping out — and nowhere near $10,000 is ever required. Why doesn’t United simply adopt such an obvious solution to the overbooking problem?
In the meantime, various legislators are still advocating to make overbooking an illegal activity. To do so would instantly require a major increase in the cost of airline seats. Overbooking is a sensible response to the tendency of many passengers to not show up for a flight they’ve booked. And penalizing the practice would increase the cost of airline seats by 20 percent or more. Since the reverse auction is such an obvious response to overbooking problems, I would encourage you to think ahead when boarding your next flight. Calculate a figure ($1,000? $1,250? $1,500? $1,750?) that you would accept in exchange for giving up your seat? There’s money to be made from overbooking!