Southwest to stop overbooking of flights

Discussion in 'Southwest Airlines/Airtran Airways' started by swamt, Apr 29, 2017.

  1. swamt

    swamt Veteran

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    I honestly don't think that stopping the overbooking will have a huge effect on the profits. I would think that by stopping the overbooking would encourage more travelers to go with SWA. Bumping 15,000 passengers last year, wonder how much all them cost? Some of those bumps could have resulted in a hotel stay, meals and transportation back and forth. So I would be more inclined to say that profits would stay relatively the same, or maybe even increase to more passengers going with SWA so not to be bumped. It is interesting how SWA took a different road than all the legacies by rolling out a stop to overbooking rather than going with a larger pay out formula for overbooking like Delta, AA and United did. Gotta give JB a tip of the hat by having the only (first) written policy that doesn't allow overbooking flights.

    Southwest Airlines to end practice of overbooking flights ...
     
  2. FWAAA

    FWAAA Veteran

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    The executives pretty much agree with you:

    http://www.latimes.com/business/la-fi-southwest-overbooking-20170427-story.html

    WN improved its VDB and IDB numbers in 2016 compared to 2015, but WN still had a very high IDB rate compared to DL, UA and AA. The rate of IDB at WN was 1 passenger per 10,000 which was 10 times the rate at DL (0.1 per 10,000), double the rate at UA (0.43) and 50% higher than AA (0.64). To be fair, those rates for DL, UA and AA don't include their regional operations, where overbooking tends to be a bigger problem. If we included all the regionals in the mainline numbers, WN might not be such an outlier.

    Except for Delta, WN also had the highest rate of VDBs in 2016 among the big airlines, which meant a lot of vouchers. Of course not all of them get used, but when they do get used, they replace actual cash, and that hits revenue.

    https://www.transportation.gov/site...viation-consumer-protection/2017MarchATCR.pdf (page 34 of document, p 35 of .pdf)

    The 15,000 IDBs last year probably cost WN less than $1,000 each all in, or less than $15 million. That's a rounding error for a $20 billion airline. The federal IDB max is $1,300, and with frequent flights, WN passengers probably don't have long delays on average to their destination, reducing the payouts.

    For many years, AA had an extremely low rate of IDBs because it had perfected the computer modeling and forecasting to match overbooking to the rate of no-shows, but in recent years, the IDBs have increased. AA was also very generous in VDB vouchers to prevent IDBing passengers. Years ago, it was routine to hear offers at LAX of $1,200 to $1,600 in vouchers to persuade passengers to delay their trip to JFK by a few hours.
     
  3. SharoninSAT

    SharoninSAT Veteran

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    Overbooking by SW has always been in place to make up
    for the large amount of no shows. Since we started the new
    policy that the no shows entire reservation is cancelled and all
    funds forfeited, I'm happy to say that we don't see as many
    no shows anymore so no need for overbooking and we'll have
    less oversold flights.
     
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  4. does this plane go to paris

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    Please correct me if I'm wrong, but doesn't WN have a higher rate of of IDB's because they compensate 10 Minute Rule Customers? When you have multiple flights between cities and are clearing stand by's to ensure a full flight, as a gesture of goodwill, WN has compensated those folks that were 10 minute Ruled and either placed them on the next flight or placed on the stand by list. If the flight went out full and no stand by's cleared, then no compensation. If we cleared Stand By Revenue and enforced the 10 MR, we listed them as IBD's and either placed them on the next flight or stand by list. Sharon?
     
  5. SharoninSAT

    SharoninSAT Veteran

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    #5 SharoninSAT, May 1, 2017
    Last edited: May 7, 2017
    We do not compensate 10 Minute Rule Customers. If they've checked in announcements
    are made before clearing revenue standbys. As long as they show up within 2 hours
    from their original departure time, they'll be allowed to go standby on the next flight
    without any upgrade in fare or if they want a confirmed seat on a later flight they will
    pay the difference in fare if there is one. No shows have a 2 hour grace period after the
    flight to either change or cancel their reservation before the entire res is canceled
    and the funds forfeited. Hope this helps to clarify.
     

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