Airline Overbooking. Not Such A Great Idea Anymore

Who still thinks overbooking by airlines is a good idea? Probably not the senior management at United Continental who forcibly removed a passenger from a flight earlier this week and now probably wish they hadn’t. Here’s just some of the consequences the airline has to deal with as a result of its heavy handiness.

Firstly, the airline got pummeled by the stock market with its shares dropping 3%. Knowing how the US rewards senior management with stock options, this one probably hurts the most.

Secondly, the news went right to the top of the US government with Sean Spicer, the White House press secretary, describing the incident as “unfortunate”. And adding that President Donald Trump had watched the video footage of the passenger’s removal as well. A senior member of the House of Representatives transportation committee and its subcommittee on aviation, Eleanor Holmes Norton, also called for a hearing on the “abusive removal” of the United passenger.

Thirdly, the news went right around the world within minutes of the video being shared on various social media networks. Given that the passenger was Chinese and was overheard to say, ‘I’m being selected because I’m Chinese’, then it’s not surprising that the Chinese social media network, Weibo, in particular, went in to overdrive. By noon on Tuesday, the popular, Twitter-like platform had recorded 46 million readers and 34,000 comments on the topic.

United’s response has been pretty hamfisted all along and the reputational damage it has suffered from the incident will take a long time to repair. But the good news is that the level of overbooking is declining and this may be one of the last stories we’ll read about it.

To  be fair to the airlines, according to EU documents, the statistical chance of all passengers with a valid ticket checking in on time is less than 1 in 10,000 at best, so the chances of it happening are already extremely slim.

And in the US, which provides the best statistics on this matter, the number of people denied boarding — both voluntary and involuntary — has dropped to 552,000 in 2015, down from 1.07m in 1999 (source: Bureau of Transportation Statistics). Those might still look like big numbers but the 2015 level represents just 0.09 per cent of all trips taken by airlines passengers.

We’ve written about airline overbooking in the past and suspect we’ll be doing it again sometime in the near future. Although we doubt that we’ll be writing about United for a while.



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