Here’s one silver lining for fliers: Airlines have drastically reduced bumping people from flights since a United passenger was bloodied and dragged off an airplane.
The number of passengers denied boarding by U.S. airlines was down 69% in the first nine months of this year compared with the same months in 2017, not counting their regional partners. Bumping at United, Delta and JetBlue each was down more than 96% compared with last year. United says it had two months this fall when it involuntarily bumped only six people out of 30 million.
“We are close to reaching our goal of zero,” says Toby Enqvist, United’s chief customer officer.
The number of people giving up seats voluntarily was also down, reflecting much less overbooking by airlines.
Bumping affects a small number of the millions of people who travel, but it can deeply disrupt ticket holders. Airlines now acknowledge that more readily. “We know this is probably one of the most painful customer experiences you can have as an airline, so we are driven to make that number zero,” says Gil West, Delta’s chief operating officer.
Airlines have historically argued that overbooking and bumping passengers were necessary to fill planes and keep ticket prices low, because even though most fares are nonrefundable, there are still no-shows. Without the ability to sell the same seat twice, airlines said, they would be forced to sell fewer cheap tickets so there were empty seats available for high-fare, last-minute purchases.
The Transportation Department sanctions the practice and requires compensation of up to $1,350 for passengers involuntarily denied boarding.
But now several carriers are essentially eliminating bumping and finding that it’s barely making a dent in their revenue. Airlines say better forecasting of demand for seats on each flight, along with better tools to proactively reroute passengers from flights that actually are overbooked, have allowed them to curtail bumping without losing money.
When college football bowl games are announced, for example, Delta knows there will be fewer no-shows for flights to cities with games than historical models might have predicted. “From a data science perspective, we’re a lot smarter about it,” Mr. West says.
Smoothing Out the Bumps
Since United had a passenger dragged off an airplane, airlines have dramatically reduced involuntary bumping.
Number of passengers involuntarily denied
boarding, Jan-Sept each year
Now the most common reasons for bumping at several airlines are when things go wrong with the operation. Passengers get bumped when one aircraft has a mechanical breakdown and the airline substitutes another plane with fewer seats, for instance.
Carriers pledged to back off bumping passengers after the April 2017 injuries to Dr. David Dao, a passenger on a United Express flight from Chicago to Louisville, Ky. Airport police forcibly removed him from his airplane seat to make room for a United pilot who had to get to Louisville for work.
Since then, United made several key changes. It still overbooks flights because some are almost certain to have no-shows. But it is far more conservative in overbooking, Mr. Enqvist says.
Crews that need to get someplace are no longer allowed to take passenger seats on fully booked flights within 60 minutes of departure time. That’s the circumstance that led to the Dr. Dao mess.
United also created a “solutions team” that reaches out to passengers who might be willing to give up seats in overbooked situations. Mr. Enqvist says the team looks for nonstop flights that might appeal to someone on a connecting itinerary, perhaps booked to get a lower fare, or someone not returning for a week who might be willing to take a later flight.
In addition, United added a feature to kiosks and its app for a reverse auction of sorts, asking passengers on overbooked flights what compensation they’d accept to give up their seat.
And United raised the maximum it’d offer passengers in the form of travel vouchers to $10,000. Previously limits were basically capped by DOT overbooking rules.
Mr. Enqvist says the average amount paid in voluntary compensation is between $500 and $1,000 in vouchers. A $10,000 payout happens maybe once a month. “I think it was more of a statement, a cultural thing,” he says.
Delta actually started its move to eliminate involuntary bumping before the Dr. Dao episode, and now is closer to zero than any other carrier. In the first nine months of this year, only 22 Delta passengers out of 104 million, excluding regional partners, were involuntarily denied boarding. By comparison, United bumped 70 from mainline flights; American 1,041 and Southwest 2,012. (Even including regional partners, the numbers for 2018 are very low.)
Delta says it made two big changes: reducing overbooking through the use of more accurate forecasts of ticket demand and changing incentives for passengers to give up seats voluntarily. Delta experimented with offers beyond traditional airline vouchers, including handing out iPads and offering coupons for extended hotel stays. Gift cards to American Express , Amazon and Delta, some reaching into the thousands of dollars, proved to be the most powerful, Mr. West says.
“It’s a lot cheaper just to take the involuntary denied boarding, but it’s a disservice to our customers,” he says.
Delta also uses reverse auctions and reaches out to customers who might be willing to take different flights when it predicts a particular flight will end up with more passengers than seats.
Southwest chief executive Gary Kelly declared his airline would end overbooking after the Dr. Dao dragging. Chief revenue officer Andrew Watterson says the airline had already come to the conclusion that compensating passengers for bumping them took up valuable gate-agent time and resulted in lousy customer experiences. The cost actually exceeds the modest revenue gained by overbooking, he says.
In the first nine months of 2016, almost 4.5% of Southwest flights saw passengers voluntarily or involuntarily give up seats. Now it’s less than 1% of all flights, Mr. Watterson says. The airline has gotten so accurate at forecasting demand that there wasn’t much benefit to overselling flights.
“If you’d asked me five years ago, I would have accused you of not understanding math. I must admit I didn’t expect this, but the numbers clearly showed to us that the right thing to do was to stop overbooking,” Mr. Watterson says.
American says it hasn’t gotten as low in overbooking as United and Delta because it lacks some technology others are using, such as the reverse-auction offers. But American plans to roll out more tools to reduce bumping in 2019.
For now, the airline is calling customers individually and trying to move them to another flight when it predicts it will have an overbooked flight. “If we can catch a customer at home, we have a very high success rate,” says Julie Rath, vice president, customer experience innovation and delivery.
The reduction—77% for American (not counting partners)—has resulted in fewer complaints filed against the airline at the Transportation Department, Ms. Rath says.
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