Channel 9

Silliness

August 25, 2008 – 12:13 pm

The New York Times ran a timely story over the weekend noting an increase in the number of passengers involuntarily denied boarding due to overbooking.  The occurence has reason to about 1.2 per 10,000 from levels as low about .8 per 10,000 in 2001.  The story was timely because my MDW-PIT Southwest flight was oversold and needed volunteers to take the next flight 1.5 hours later that day.

The story has its merits.  Flights are crowded and if supply (flights) are cut disproportionately demand, then involuntarily bumping will occur more often.  It is good for consumers to be aware of this.  And readers were certainly interested as the story topped the Nytimes.com “Most Emailed” for part of the weekend.

At the same time, I feel obligated to stick up for overbooking.  With all due respect to Tim Winship, overbooking is not a bad strategy, as he tells the New York Times, “The practice is ‘bad for them’, it’s bad for morale, and you end up with a potential riot on your hands among people who have to be compensated.”  Overbooking is not a haphazard practice and airlines do everything they can, employing complicated algorithims, to maximize the number of seats flown on every plane without denying boarding.  As noted above, even everyone’s “fee-free” airline, Southwest, overbooks airlines.  It is simply one of the few ways to make money in this business.  Even when too many people show up for a flight there are more often than not a handful of people that are overjoyed to take the compesation offered by the airline.

I could go on, but the moral here is that to view “overbooking” as bad is, well, naive.  Airlines may do plenty of things wrong, and I’m happy to note when they do.  But, overbooking is not one of them.