Passenger help

[TomBascom]

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Could someone please help me out on a question about passenger booking? A neighbor just came to the house and was laughing about U's booking system, and how we are loosing money. Here's what happened friday afternoon in Phil. and maybe someone can explain why.
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It's pretty simple. The company decided on 8/27 that free stand-by shouldn't be free for people who have non-refundable tickets. Originally the only option was to by up your ticket to a full fare. The kinder and gentler version of the rule now permits stand-by in exchange for $100.

The reasoning (from interviews with the responsible VPs) is that business travelers have been buying more and more non-refundable tickets (after all they're in business and have to watch costs) and this is depressing revenues. (Something like 88% of corporate travel is now on discount fares...) Yet someone thinks that a business traveler will be especially willing (maybe even happy) to part with $100 to stand-by.

They'd rather send (incredibly valuable and highly perishable according to some persons) empty seats out than allow someone on a non-refundable ticket to stand-by for free. After all -- someone might want to hand over a walk up fare for that seat!

 

[TomBascom]

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On 10/12/2002 2:31:53 PM RealityCheck wrote:

... From a business standpoint U can potentially make more money on change fee/ stdby fee on what I gathered was a non ref cheaper than business fare ticket in that market.
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Or... the 3:30 flight is popular for a reason. And perhaps there was a person who would have paid a walk-up fare to be on that flight. Just one of those would balance quite a few $100 stand-by fees. But instead of freeing up a seat...

 

[RealityCheck]

[BLOCKQUOTE][BR]----------------[BR]On 10/12/2002 9:03:03 PM TomBascom wrote: [BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/12/2002 2:18:51 PM RealityCheck wrote: [BR][BR]The customer is not blameless either. It is necessary to overbook...[BR]----------------[BR][/BLOCKQUOTE][BR][BR]RC -- where do you get these ideas? Is this something that management dishes out in an indoctrination video or something? It isn't necessary to overbook. Nor are those reasons the real ones for doing it. They are, at best, a minor contributor to the economics.[BR][BR]It's simply profitable. It's a basic capacity management strategy. You find things like this used everywhere. It allows you to fly planes with much higher load factors than you would otherwise achieve. But in order for it to work well the system needs to have some elasticity. Restricting stand-by works against that elasticity and is counter-productive in the long run.[BR]----------------[BR][/BLOCKQUOTE][BR]then your counter suggestion is to book every plane to its numerical max and that's it, is that what I am to understand? Even on flights with a 10 to 20 pct statistically tracked no show flight, that is your suggestion, right? That the airlines shd take standbys (an untracked statistic)into account before overbooking, right?[BR][BR]I won't even stoop to debate this one. [edited by moderator]. That's not cynical, it is REALITY![BR][BR][BR][BR][BR][BR][BR]

 

[ClueByFour]

Last year, the company I work for earned (not EBITA, but available to common type income) about $200 million on sales of about $7 billion. Crappy margin. Bad year. 5,000 layoffs or so.

US lost what, $2.5 billon on $7 billion of sales or thereabouts? I'd guess a couple of million of that or thereabouts came from my employer.

I think you guys really need to take a serious look at what the management over there has told you over the years. Most of your customers, particularly those who remain VFFs now that the economy has tanked, probably have made more money (profit) that US has during it's entire existance. What does that tell you?

 

[TomBascom]

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then your counter suggestion is to book every plane to its numerical max and that's it, is that what I am to understand? Even on flights with a 10 to 20 pct statistically tracked no show flight, that is your suggestion, right? That the airlines shd take standbys (an untracked statistic)into account before overbooking, right?
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That's not what I said.

I'm defending overbooking -- it's a good thing for everyone. Restricting stand-by, however, is not. It works against the factors that make overbooking work.

If stand-bys aren't being tracked that sort of makes you wonder how anyone in the crystal palace could make a rational policy decision about them...

Anyhow, to answer what seems to be your question, yes potential stand-by defections ought to be taken into account when determining inventory levels for sale. All sources of fallout need to be considered.

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I won't even stoop to debate this one.
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Naw, just cut right to the mudslinging -- it saves time.