My wife's family recently took a trip to Riveria Maya. We flew from Charlottesville to Charlotte and then onto Cancun.
On both flights USAIR had severly overbooked seats. They were offering the usual free tickets and stuff but it got me wondering....
Why do airlines overbook? The flight to Cancun was full and they bumped 6 people. That's six more tickets to anywhere USAIR flies. I understand that people cancel or never show but heck, just make their tickets non-refundable. That way you have a lighter plane, you consume less fuel, and you still get paid as if the flight was full. Plus you don't have to give up free seats...
I am sure there is a algorithm that figured out it was cheaper in the long run to just overbook but it seems like such a waste...
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Airlines are much like hotels in that people will cancel on short notice. There's somewhere around a 95% show up rate, which means 5% will cancel on you and leave you empty handed.
I would think they do overbooking versus non-refundable is because overbooking means they bump you to another flight and still keep your money. Sure, they may give you a free flight at a later date, but that just helps ensure you get in the habit of choosing their airline when you do make reservations, out of habit.
I would think they do overbooking versus non-refundable is because overbooking means they bump you to another flight and still keep your money. Sure, they may give you a free flight at a later date, but that just helps ensure you get in the habit of choosing their airline when you do make reservations, out of habit.
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Quote:
Airlines are much like hotels in that people will cancel on short notice. There's somewhere around a 95% show up rate, which means 5% will cancel on you and leave you empty handed.
Given that profit margins are about 10% that means you lose half your profits is you don't over book.
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