The Business Of Tourism – Overbooking And The Airlines

By David Jessop

News Americas, LONDON, England, Fri. May 19, 2017: When I go to the theatre, I buy a ticket which has seat number on it. When I am there, the seat is mine for the duration of the performance. I have paid for it, and if I fail to show up, the seat remains empty and the theatre keeps my money.

I know of no theatre which would sell more tickets than there are seats in the hope they might earn more, or which might decide at the last minute that one of their staff should sit in my seat. The same holds true of every other ticketed payment-in-advance service I can think of.

It is therefore with amazement that I read some of the evidence given on May 2nd by US air carriers to the US House Transportation and Infrastructure Committee on consumer issues.

The hearing came shortly after the online publication of the globally damaging images of a passenger being dragged from an overbooked United Airlines flight, to make room not for another passenger, but for repositioning airline employees. To add insult to the very real injury, the matter was then made worse by the airline’s CEO, Oscar Munoz who, in his first response, appeared incapable of showing any empathy for the customer, or of understanding the damage he was doing to his company’s brand.

At the Congressional hearing, as you might expect, representatives of United Airlines delivered a carefully considered and, one assumes, public relations and legal counsel drafted apology.

However, in the type of corporate doublespeak that has become increasingly common, but which drives customers crazy, United Airlines President Scott Kirby told the Committee: “We view overbooking as something that actually helps us accommodate and take care of thousands more customers than we would otherwise be able to.”

Just as astonishingly, American Airlines, in answer to questions on issues such as the swinging ticket-change fees almost all airlines charge, and the continuing incorporation of fuel surcharges into ticket prices – oil prices have been at near record lows since the end of 2015 – suggested that such matters were mostly “about our way of offering low fares to consumers” or as existing to “give customers more options and more choices.”

Only the low-cost carrier Southwest recognized what customers really want. In the formal part of his testimony, the airline’s Chief Operating Officer, Bob Jordan, confirmed that beginning on May 8, “Southwest will no longer overbook flights” and that the airline had upgraded its reservations and forecasting systems to make this possible. “Simply put, discontinuing the practice of overbooking is completely consistent with our other customer-friendly policies,” Jordan said.

Reading and viewing the airlines’ formal testimony to the Congressional Committee and the responses given to the questions asked, one cannot avoid the conclusion that legacy air carriers have become arrogant; prefer the evasive language of marketing to plain English; and have lost track of the honesty and authenticity that most consumers want.

Judging from some of what was said, it would seem that they appear to care little about passenger anger over proliferating charges for everything from food to checking bags; paying more for seats that might have a little extra legroom but the same service level; incomprehensible fare structures that constantly change; high charges for one-way fares; or the legal caveats that appear designed to protect the airline, not the consumer.

The reality is, as William McGee the travel and aviation consultant to the not-for-profit US Consumers Union observed, there is no reason for airlines to overbook. “Greater market concentration, reduced competition, and state-of-the art reservations and yield management systems allow airlines to closely manage selling all available seats,” he said.

He also noted that airlines are carrying record high passenger loads of between 80 and 100%.

The hearing indicated how far apart most airlines are from the way they are regarded, particularly by those customers who sit in the back of the plane. The congressmembers spoke about angry calls from constituents, and the Chairman of the Committee, Republican Congressman Bill Shuster, threatened that if the Committee did not see meaningful results that improve customer service, the airlines will not like the outcome.

Despite this, the thinking in the new US Administration is to loosen consumer protection. This suggests that the long-suffering air traveler should not expect change anytime soon, unless more events of the kind recently experienced by a customer of United go viral.

EDITOR’S NOTE: David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org