Delta’s New Overbooking System Makes Sense for All

Overbooking is a contentious topic for many. Airlines think this is an important process that helps their bottom line. Inevitably, some people will not show up for a flight, so selling more seats than are available in reality makes financial sense. Airlines use mountains of historical data to do this as accurately as possible, but sometimes more people show up than planned. Sometimes, that means there are more people than seats.

In this case, airlines try to take care of the situation by asking passengers to give up their seats for some form of compensation - usually some type of credit that can be used toward a future flights. Many savvy travelers love this policy, as it's a quick way to get some cheap traveler. In fact, I know some who ask before boarding if the flight is oversold because they really, really want that compensation.

Having volunteers beforehand helps, but oftentimes there aren't enough passengers who are willing to do that. So instead the gate agent has to make an announcement and find some more people willing to take a delay - something that can turn into a time-consuming process.

Delta has been playing with a new solution over the past few weeks that has been getting a lot of press recently. The airline uses booking data to see how likely your flight is to be oversold when you check-in online or at an airport kiosk. If it's likely, you have the opportunity to bid on the compensation you would like to receive.

I think this works for both sides of the deal. Delta bumps people who bid the least, so the cost of overbooking is minimized. Meanwhile, the customers who are the most willing to be delayed get their compensation. Hopefully, less time is spent looking for volunteers so that makes boarding a bit faster.

[found via Tnooz]