More Flights Are Overbooked, but Payoffs Are Rising
The bad news: the likelihood that travelers will be bumped from an overbooked flight may grow worse this fall when airlines shrink their fleets to cut unprofitable flights and inefficient planes, meaning even fewer empty seats than there are now.
The good news: airlines are required to offer richer rewards — twice the amount of money they used to pay out — for passengers bumped from a flight. The payoff can be even greater for people who know how to bargain.
In the first six months of the year, about 343,000 passengers were denied seats on planes, according to the Department of Transportation, out of 282 million passengers. Most of those people volunteered to give up their seats in return for some form of compensation, like a voucher for a free flight.
But D.O.T. statistics also show about 1.16 of every 10,000 passengers had their seats taken away outright because of overbooking — which may sound like a low rate, until your name is called.
“I hear all kinds of nightmares,” said Clay Escobedo, a supervisor at the Reno/Tahoe International Airport in Nevada. He was told earlier this week that there were not enough seats for his family on a Horizon Air flight to Los Angeles, where they were to connect for a trip to a resort in Mexico. “I didn’t think it could happen to me.”
Back when most tickets were refundable or easy to change, and the airlines offered multiple daily flights to many cities, carriers used to routinely overbook about 15 percent of their seats. Passengers who missed their plane could simply catch a later flight.
Rules are tighter now, and passengers with nonrefundable tickets can only expect a credit for an unused ticket, often minus a hefty fee, if they change their flight. That means they have more incentive to show up.
But airlines still overbook, regarding bumping as a necessary part of doing business, especially in the face of record fuel prices. Overbooking, after all, helps ensure flights are as full as possible, a priority for the financially troubled carriers.
That strategy can also backfire on the airlines, said Tim Winship, an editor with SmarterTravel.com, a Web site that offers travel advice. The practice is “bad for them, it’s bad for morale, and you end up with a potential riot on your hands among people who have to be compensated,” he added.
Even with the higher compensation for being bumped, many passengers are angered by the practice.
“It feels like I’m paying them for goods and services, and what I’m getting back is some useless voucher and a ‘good luck with getting home,’ ” said Andrew Cox, a manager at a Jimmy John’s sandwich shop in Lansing, Mich.
He agreed to give up his seat at Kennedy International Airport in New York last week in exchange for a $400 voucher good toward a future Delta flight and a seat on a later flight, only to find out that his later flight was canceled.
“There’s just so much passing the buck,” Mr. Cox said. “Of course there are things that can’t be controlled, but a flight has a certain amount of seats. It’s pretty simple. If flights are being overbooked, then what does that say about how the airline runs their business?”
For Delta Air Lines, bumping became a big concern last summer, when 3.3 passengers out of every 10,000 travelers were bumped, more than double the industry average.
So Delta started using new technology to better track differences in no-show patterns based on time, day and season.
“We now have a much better view of how many passengers we expect to show up” for the same flight on a Tuesday versus a Friday, said Betsy E. Talton, a Delta spokeswoman. The methods have helped Delta cut its involuntary bumpings in half, putting it more in line with the industry average. In fact, the rate of forced bumping for all the airlines declined in the first six months of 2008, compared with the same period last year. But the rate remains higher this year than in all of 2007, and has been on a steady climb since 2002.
Meanwhile, Continental Airlines said it was introducing a new feature on its Web site and at airport kiosks that lets travelers automatically check in within 24 hours of their return flight. The step is meant to save travelers the trouble of going online to check in the day before their return flight. It can also help protect them against getting bumped, since Continental will know that they plan to make the flight.
The higher cost of payouts, which the Transportation Department doubled this spring after last summer’s travel chaos, gives the airlines extra incentive to refine their overbooking models.
Travelers can now receive up to $400 if they are involuntarily bumped and rebooked on another flight within two hours after their original domestic flight time and within four hours for international. They are eligible for up to $800 in cash if they are not rerouted by then. The final amount depends on the length of the flight and the price paid for the ticket.
Even stricter rules apply in Europe, where compensation ranges from 125 euros (about $185) to 600 euros (about $888), depending on the length of the flight and the amount of time the passenger will be delayed.
Compensation must be paid immediately in cash, or with a voucher if the passenger accepts it, and the airline must offer a choice of a refund, a return flight to their departure city or an alternative flight. Volunteers also receive compensation, which they negotiate with the airline.
Passengers are learning, however, that if an airline does not get enough volunteers at a lower figure, they might be able to bid up the offer, and also obtain sweeteners that include vouchers for meals, hotels, transportation and even plane tickets.
Mr. Escobedo, traveling with his wife, daughter and two grandsons, was told there were only three seats for them for their Horizon Air flight to Los Angeles to connect for their vacation in Mazatlan, Mexico.
“I stood my ground,” he said. “I kept telling the agent, ‘That plane better not pull away from the gate. You need to make another announcement.’ ”
The agent complied, and, once everyone was on board, asked for two volunteers so the Escobedos could travel together. The airline offered a free round-trip ticket, good for a year, to anywhere that Alaska or its partner Horizon Air fly, and promised that volunteers could still reach Los Angeles via San Francisco that day.
Stephen Schwartz, a graphic artist, immediately put up his hand, as did Margaret Cockrell, a professional development educator. Her reason for volunteering? “This family deserves to go on their vacation,” she said.
Mr. Schwartz added: “A round-trip ticket. Who could pass that up? Now, I can go anywhere I want.”
When Mr. Schwartz arrived in San Francisco after giving up his seat from Reno, he learned his connecting flight to Los Angeles was also overbooked. There, the airline was offering $250 vouchers to passengers who would agree to take a later flight.
Mr. Schwartz said he was tempted, but ultimately declined because he had arranged to be picked up in Los Angeles so he could reach his job at a summer camp.
But Mr. Schwartz had already received an unexpected reward. As he gave up the seat in Reno, Mr. Escobedo, head of the vacationing family, handed him and Ms. Cockrell each $20, so they could buy themselves lunch.
“They saved the day for me,” Mr. Escobedo said.