CEO of Air Canada has come out in defense of airlines’ practice of overbooking flights

Discussion in 'Air Canada | Aeroplan' started by misman, Jun 20, 2017.  |  Print Topic

  1. misman
    Original Member

    misman Gold Member

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    Don't usually post here, but thought you may find this interesting...

    http://www.huffingtonpost.ca/2017/06/20/air-canada-ceo-overbooking_n_17223874.html
     
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  2. londoncalling

    londoncalling Silver Member

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    I think overbooking is fine as long as they follow their data base. One problem is that almost all fares have a penalty attached to them for no show or changes so I would think no shows have to be down substantially.
    However, many of AC's flights depend connecting traffic and late/cancelled arrivals at their hubs allows them to calculate their risks with data management tools that seem to work for the most part.
     
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  3. mevlannen
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    mevlannen Gold Member

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    Overbooking seems to be thoroughly 'baked-in' to AC's revenue model. What I would like to see is that vouchers be applicable toward full price of a future flight, since the 'fare' component seems to be so miserly-small these days.
     
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  4. YULtide

    YULtide Gold Member

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    The claim that overbooking reduces airfares is a little rich. Then in the same breath he says it's a small percentage of seats. So if it's a small percentage, why is it so worthwhile?
     
  5. mevlannen
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    mevlannen Gold Member

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    Like the old matchbook-cover joke had it:

    "Feed the cats to the rats, and the rats to the cats, and get the cat pelts for free?"
     
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  6. powell090

    powell090 New Member

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    it is really interesting, please keep updating.
     
  7. The Lev
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    The Lev Silver Member

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    Because they do LOTS of overbooking but only relatively rarely do they end up in an oversold position where they have to bump people due to overbooking. If they can no longer overbook, they save the cost of IDG compensation but give up substantially more revenue at the front end.

    In addition, even if the airline doesn't directly raise its fares, consumers will pay more because the airline will hit the ratchet points sooner where the fare moves up to the next higher fare bucket. Hypothetical example... AC has programmed its system so that on a particular aircraft and route the Tango fare goes from bucket L to T when there are 30 seats left to sell. If they are willing to oversell the aircraft by 10 spots, it means that the T fare will kick in with 10 fewer passengers already booked than was previously the case.
     
  8. mevlannen
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    mevlannen Gold Member

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    The Lev, thank you! I had not quite comprehended what the airline's business case for overbooking might be. I had thought of it in terms of retail queueing theory, as most-commonly seen implemented in medical waiting-rooms.

    /elane

    Dr Elane to the universities and the airlines, but of science, not medicine. No enforced waiting-lists in my practice!
     
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  9. GodOSpoons

    GodOSpoons Active Member

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    What does AC know about low fares? Today's seven day, RJ-only fare BOS-YUL is $1502. 14 days, $601.

    Timothy

    They clearly need to overbook more, I guess.
     
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