Should airlines be allowed to overbook flights and bump passengers?
Overselling seats can actually benefit travellers, expert says
Bumping passengers from overbooked flights is a widespread, perfectly legal industry practice.
Nonetheless, many travellers are outraged by the notion that airlines can actually bar them from flights they've already paid for.
Now, some who've been burned by bumping are speaking out, raising questions about the fairness of overselling airline seats.
"Bumping a fully paid customer? Unconscionable," Neil Crone told CBC News earlier this month after being bumped from an oversold Air Canada flight.
"How do they get away with it and why would they even consider it?" said the Port Perry, Ont., resident.
The grumbling probably won't sway airlines to give up what industry experts say is an acceptable way of doing business. But some caution that airlines need to do their best to make the bumping process as smooth as possible for passengers.
"Certainly, they should offer compensation and they should do everything they can to make it right," says Mara Lederman, professor of strategic management at the University of Toronto's Rotman School of Management.
Overbooking a good thing?
The overbooking issue became a hot topic recently when CBC News ran a story about Crone being bumped from his Toronto to Miami flight. He had to wait 12 hours for another flight, missing a day's vacation.
We then heard from other Air Canada passengers. They included a Toronto woman who missed her $10,000 cruise due to bumping, and 10-year-old boy bumped from a flight with his family for a March break vacation.
"They shouldn't be able to sell the same product twice," says the boy's father, Brett Doyle from Stratford, P.E.I.
The issue was also thrust into the international spotlight earlier this month when passenger David Dao was forcibly removed from an United Airlines flight in Chicago.
Dao and three other passengers were ordered to leave the plane to make room for some added crew members.
Lederman says the United case, where a passenger was dragged off by security, was an appalling and unusual incident that should never have happened.
But she adds that the practice of overbooking flights in general is not such a bad thing. "There are some people who would not get on a flight but for the overbooking policies," she says.
Many airlines sometimes oversell seats on flights to maximize profit, calculating that a percentage of booked passengers will not show up or cancel.
When those calculations are off, paying passengers risk getting bumped.
While a bumped passenger may get lots of media attention, Lederman says the rate at which it happens is actually rare.
She adds that overselling seats provides passengers with some benefits, such as helping keep costs down.
"If an airline has to fly a plane 10 per cent empty, it's going to have to earn a little more revenue from the paying passengers to cover the empty seats."
The practice also allows airlines to sell flexible fares, where passengers can change their flights.
It also offers a win-win situation when someone desperately needs to catch a flight and someone else happily volunteers to give up a seat in exchange for compensation, says Lederman.
"That seat is now being given to someone who more badly needs to get home. So that mechanism for resolving it is a very good mechanism."
How to make it right
To create a winning formula, Lederman says airlines should be flexible with the amount of money they offer people to give up with their seats and catch a later flight.
"If you raise it high enough, somebody is going to volunteer."
Following the United incident, U.S.-based Delta Air Lines announced that it will now allow gate agents to offer up to $2,000, and supervisors can offer up to a whopping $9,950 to coax people to forfeit their seats.
"Overbooking is a valid business process," said Delta CEO Ed Bastian in an earnings call last week.
He added that the real issue is not airlines overselling flights but instead how they deal with it.
Airline analyst Fred Lazar offers another solution to soften the blow of bumping. The York University professor says airlines tend to target passengers who buy the cheapest fares and don't pay for a pre-selected seat.
Lazar suggests airlines should tell these passengers in advance if they're at risk of being bumped.
"If passengers have this information, then if they get bumped, if there's adequate compensation, there's no reason to complain," he says.
Will money make it better?
Airline experts agree passengers who are bumped involuntarily need to be adequately compensated.
The Air Canada passengers CBC News spoke with all received some kind of compensation for their troubles — ranging from $800 cash to a $2,500 travel voucher.
The federal government plans to streamline the compensation process this spring when it announces an air passenger bill of rights.
It will lay out minimum requirements for compensation for airline mishaps ranging from lost baggage to being bumped from flights.
"The goal is to develop a regime that is transparent, open and that everybody knows what to expect," Transport Minister Marc Garneau's spokesperson Marc Roy told CBC News.
But even regulating compensation may fail to prevent some passengers from protesting a practice they believe shouldn't exist in the first place.
"I thought if you paid for the flight, you got the flight," says passenger Crone.
ABOUT THE AUTHOR
