> The problem isn't overbooking. The problem is not auctioning the seats higher when overbooked.
This. Oh so very much this. United could have avoided this whole debacle simply by not imposing price controls on the market for seats when it became a buyer rather than a seller.
Could they have averted disaster with money? It's astounding that there were no volunteers when they offered USD 800 for a seat, 800 dollars is a nice sum. Every single passenger on that airplane thought there was a catch involved, they were getting again 800 dollars in airline vouchers, which everyone knows have big gotchas attached. The airline has a trust problem, which won't improve anytime soon.
My understanding is that the next flight was something like the following afternoon. Business travelers are basically not going to voluntarily take a later flight at all. With respect to vouchers, most people don't travel all that much so a 1 yr. voucher isn't worth much. But offer cash (or a voucher at 2x) and you'll get people at some point.
> Business travelers are basically not going to voluntarily take a later flight at all.
This. As a business traveler, I don't know how I would justify this to my finance department and/or management. It would take too much effort to justify the change in travel plans for a shitty voucher that I'd probably never be able to redeem.
I once received the $500 voucher, and as an infrequent traveller, it was completely useless. The voucher went unused and expired. I wish they had offered me cash.
Now, I am a frequent traveller and mostly travel on business. Now again, the vouchers are useless to me.
I think the airlines should offer real cash instead of vouchers. More people would be ready to take those instead of vouchers.
Regardless of how heinous it might be to someone that a whole flight turned down $800, I can guarantee there was a number for every single person on that flight that would have averted the disaster. Now some of those numbers were probably much, much higher than others but I guarantee everyone had a number they would have agreed to (barring extenuating family circumstances or the like).
I think there would be takers even for $800 if it was cash but other commenters have pointed out that united never offered money but rather travel vouchers in small denominations that you cannot use more that one of in a single transaction.
I can offer $100k in thanksgiving fun bucks as well every time I screw up majorly. It will be in denominations of $50 and you can use them towards future consulting with me. My consulting starts at $100 per hour with minimum of one hour. You cannot use more that one voucher per transaction.
It was $800 in vouchers for other flights, not cold hard cash I believe. And even if it was actually $800, that is not worth missing a day of work unplanned for many people- the Doctor they dragged off the plane who had patients to see thought so.
Well in this case the market is distorted by the fact that regulations allow the airline to not let people board for a much smaller cost. If the airline didn't have that legal out, they would be forced to negotiate terms with each passenger whose contract they wanted to break.
Without regulations the airlines will just put a "we reserve the right to uniterally terminate this contract with a full refund" clause in their contracts.
Status quo: offer increasingly higher flight vouchers until you hit the federally mandated rate of 400% ticket price cash rebate, capped to $1350.
Without regulations: offer increasingly higher flight vouchers until you hit 100% ticket price refund cap.
> For example, an involuntarily bumped traveler who arrives to his final destination more than two hours late (fours internationally) is entitled to an amount worth 400% of his one-way fare (capped at a maximum of $1,350).
There are no regulations forbidding United to offer more when a passenger is already seated, and that passenger thus can't be legally bumped (apart from because of safety reasons maybe).
I am well aware of how it works. What I said is that the incentives to offer more than what they are legally required to offer by the IDB regulations (which does have an upper limit) are significantly lessened since the IDB rules give them a "get out of contract free" card for that amount.
And they could have offered the passenger free United flights for life and it still would have cost less than this embarrassing and protracted PR catastrophe ever will.
PR disaster happens at 40,000 feet and gets recorded by smartphones. Since they're still in the air the footage hasn't been uploaded to the internet yet.
The on-board AI supercomputer makes the determination that the negativity of a plane crash would be less than if the footage leaks out so it decides to crash itself in order to maximize profits.
This. Oh so very much this. United could have avoided this whole debacle simply by not imposing price controls on the market for seats when it became a buyer rather than a seller.