Saturday, April 29, 2017

Southwest's Change

From Yahoo:
"Southwest to stop overbooking flights. Will other airlines follow?"

Overbooked flights are a regular occurrence in the airline industry, but one major carrier has announced it is bucking the trend. Southwest (LUV) CEO Gary Kelly said in an interview with CNBC that the airline will soon put an end to overbooking flights.  “I’ve made the decision, the company made the decision, that we will cease to overbook going forward,” he said. The news comes just weeks after passenger Dr. David Dao was involuntarily bumped from a United flight, and violently removed from the plane after refusing to give up his seat on the overbooked flight. Dao received a concussion, broken nose and two broken teeth, his lawyer says. He is now suing United Airlines (UAL).   While the United incident has caused many airlines to rethink their overbooking policies, Kelly says it’s not what inspired his decision. “I bet we don’t overbook a flight more than say one seat,” he said. “We’ve been taking steps over the last several years to prepare ourselves for this anyway.”   In an email to Yahoo Finance, a Southwest spokesperson confirmed that the airline will no longer book a flight over capacity as part of the selling process. “As we have dramatically improved our forecasting tools and techniques, and as we approach the upcoming implementation of our new reservations system on May 9, we no longer have a need to overbook as part of the revenue management inventory process,” said the airline. But that doesn’t mean that flights will never be at overcapacity at the time of departure. The spokesperson clarified that occasional “operational challenges” may require the airline to ask volunteers to give up their seat. Still, this will happen less frequently because overbooking will be discontinued.   Airlines regularly overbook flights because some passengers simply don’t show up. By overbooking, airlines are able to reduce the number of empty seats and keep fares low. So far Southwest is the only airline that has promised to stop overbooking, but several airlines have updated their policies on the issue.  On April 14, Delta (DAL) announced that it would offer customers up to nearly $10,000 in compensation to give up their seat if a flight was overbooked. Previously, gate agents were only allowed to offer passengers up to $800; now that number is $2,000.  If the airline still doesn’t get volunteers, supervisors can offer up to $9,950 in compensation. This is up from the previous max of $1,350. Even with the changes, the maximum payout will probably be tough for passengers to actually get. The airline’s contract of carriage very clearly states that the amount of compensation is “subject to Delta’s sole discretion.”

^ I'm glad that Southwest is doing this. Over-booking should be illegal, but until that happens - if it happens  - then it will be up to the airlines to do what is right and that is not to sell something they don't have (extra seats.) ^

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