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How To Avoid Being Bumped, Overbooked

This article originally appeared on the Motley Fool.

Last week, a disturbing video showed a  United Continental   (NYSE:UAL)  customer being violently dragged off an oversold flight. Not surprisingly, this incident has caused outrage around the world and sparked calls to boycott United. It also has many people wondering how they can avoid being subjected to a similar experience.

Of course, most oversold situations are resolved in a far more civilized manner. However, it’s always inconvenient to get involuntarily “bumped” from a flight. Moreover, every airline in the United States overbooks its flights at least some of the time.

All but one, that is.  JetBlue Airways   (NASDAQ:JBLU)  is the one holdout that chooses not to overbook its flights, to be more customer-friendly. Yet even JetBlue has to “bump” customers sometimes — and this has become a more frequent occurrence in the past year.

Overbooking is inevitable

There’s a simple reason United Continental and most of its peers overbook their flights: Doing so is extremely profitable.

First, customers sometimes don’t show up for their flights. Thus, on average, airlines can sell a few more seats than they actually have on the plane without running into trouble. Of course, they sometimes miscalculate, but the benefits of this strategy far outweigh the costs.

Second, airlines like United earn most of their profits from transporting business travelers, who tend to be less price-sensitive. If a business traveler is willing to pay a $1,500 walk-up fare for a flight from New York to Chicago, it makes sense for the airline to sell that customer a ticket even if the flight is already full. Most of the time, the airline can entice someone else to take a later flight by offering a voucher for several hundred dollars toward future travel.

Yet getting “bumped” is extremely rare

Despite the widespread adoption of overbooking, airlines don’t have to bump customers against their will very often. Generally, when flights are oversold, airlines are able to find enough volunteers to take later flights by offering generous vouchers.

Indeed, airlines have a strong incentive to avoid involuntary denied boardings, especially when they don’t have another way of getting the affected customers to their destinations quickly. In most situations, the Department of Transportation mandates that airlines provide cash compensation equal to 400% of a customer’s one-way fare — up to $1,350 — if a customer who gets bumped reaches his or her destination more than two hours late (for domestic flights).

Thus, for every million passengers who flew United Airlines mainline flights in 2016, there were just 43 involuntary denied boardings. This was below the industry average of 62 involuntary denied boardings per million passengers.

Overbooking isn’t the only reason you might get bumped

While overbooking is the main cause air travelers get bumped, it isn’t the only one. Occasionally there may be a broken seat that can’t be used….

Read the full article from the Source…

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