How Delta masters the game of overbooking flights (free markets not force)

SuperstringTheory said:
So that is your excuse for supporting more government/socialism for the rich?

The free market could have solved this easily. But since it might hurt United you are ok with big government stepping in to save them from their mistake.
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Oh spare me the free market fundamentalism! Common sense would dictate that this would blow up into a PR disaster.
 
Mott the Hoople said:
Not to be an apologist for United but the local cops are hardly big government and they were probably clueless that the cops would beat his ass.
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not to be a realist, but they called their closest government enforcement agents with full power to do what they needed, so how is that not big government?
 
Mott the Hoople said:
i wouldn't take the travel vouchers. I volunteered once to give up my seat for a travel voucher to fly anywhere in the continental US. It came with so many restrictions I couldn't use it. I'll never do that again.
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The company was within their rights to offer it :) They figured the PR hit is worth less than 800 :D Corporations have the right to do stupid things.
 
Mott the Hoople said:
Not to be an apologist for United but the local cops are hardly big government and they were probably clueless that the cops would beat his ass.
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Cops are part of the government. To me, "big government" means illegitimate government. According to google that's the common way it is used. What does it mean to you?

Cops tend to settle things by threatening and then using force. Who does not know that?
 
Mott the Hoople said:
Oh spare me the free market fundamentalism! Common sense would dictate that this would blow up into a PR disaster.
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What ru on about? I have not said a damn thing about the "pr disaster." That's not really the market solution. The market solution would have been to tell them to offer more for passengers to accept being bumped.
 
SuperstringTheory said:
It is ultimately overbooking. There were more ticket holders than available seats.

Moving crew is something they do regularly and for some good reasons they give them priority, The problem is how do you resolve the issue of too many tickets/not enough seats.

United called for a big government bailout. The right solution would have been to offer more money until someone agreed to be bumped.

Maybe the government should just charge $10000 for the service of passenger removal. I am pretty sure someone would have taken less than $10000 to give up their seat.
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This flight was not over booked. It's common for every airline to overbook, assuming some will change their plans. That's not the case here, or the 4 passengers who got bumped would not have been allowed to board.

United should have booked the staff on another airline, or put them on a train. But this wasn't the way to go about making last minute changes.
 
cawacko said:
Excellent column from The Grumpy Economist on the United situation and personalized tickets to price discriminate. I hadn't thought of it from this perspective.



Commentators seem to have noticed a lot of the economics of the United fiasco: Yes, don't stop auctions at $800. (WSJ review and outlook.) Yes, if you need employees at Louisville so badly, call up American and buy a first class ticket. Book a private jet. Or, heck, you're an airline. Bring up another plane. Don't drag people off planes to save a measly $500.

The one economic point that I haven't seen: the whole issue also comes down to airlines' use of personalized tickets to price discriminate. (And most of the TSA's job is to enforce that price discrimination by making sure you are the name on the ticket.) If you could resell tickets, the problem would go away. Then the airline must sell only as many tickets as there are seats on the plane, as concerts do. If people aren't going to show, they put their tickets on ebay -- or another quick peer to peer ticket trade platform -- and someone else buys them. Including the airline, if it wants to send employees around. Standby disappears -- want to get on the plane? Bid for a ticket. We still get efficiently full planes -- fuller, even -- nobody ever gets bumped, and the auction for the last seat is going on constantly.

Yes, one of the hardest lessons in economics is that price discrimination can be efficient. Business class cross subsidizes leisure and pays for fixed costs. But the airlines could speculate in their own tickets as well, so its' not clear in a data mining race that scalpers would reap the price discrimination profits better than the airlines themselves.

Holman Jenkins adds, in a brilliant column,

While we’re at it, what’s wrong with Chicago airport security? Did not a single officer say, “I’m having no part of this. If United can’t deal with its
overbooking mistakes in a civilized, non-cheapskate way, how is it my job to manhandle innocent customers?” This also smacks of our national malaise
—police who need an armored personnel carrier before they’ll roll up and serve a warrant, who wait outside Columbine High until they’re sure the
shooting has stopped.

And do not the other passengers rebel at seeing such treatment? Well, maybe not the first time, but I suspect the next time they try to drag a customer off an overbooked plane, there will be a riot.


http://johnhcochrane.blogspot.com/2017/04/united.html?spref=tw&m=1
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First....reselling tix opens up myriad natl. security issues. And the passengers did indeed rebel as the cops dragged that guy off the plane.
 
SmarterthanYou said:
so?

then they would have no reason to say that they were, right?


then what happens when you DO get bumped?
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You get bumped at the gate before you board. It's common for the attendant at the desk to announce the over booked status, and start making offers. Why the hell would they board people, only to yank them off? This was a last minute decision to transport employees.
 
SuperstringTheory said:
What ru on about? I have not said a damn thing about the "pr disaster." That's not really the market solution. The market solution would have been to tell them to offer more for passengers to accept being bumped.
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Given that this wasn't an over booked issue, they tried to get off cheaply. I've been doing some reading. Often, a late 'booker' will pay thousands of dollars for the right to get a seat at the last minute. So, if the airline just snagged someone for $2000, they'll offer $1200 to bump someone.

In this case, they were looking for the passengers who got the best deals on their tickets, because they weren't going to make a cent on the transport of employees.
 
Althea said:
You get bumped at the gate before you board. It's common for the attendant at the desk to announce the over booked status, and start making offers. Why the hell would they board people, only to yank them off? This was a last minute decision to transport employees.
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I'm not disagreeing with you on the bolded part.
 
Althea said:
Given that this wasn't an over booked issue, they tried to get off cheaply. I've been doing some reading. Often, a late 'booker' will pay thousands of dollars for the right to get a seat at the last minute. So, if the airline just snagged someone for $2000, they'll offer $1200 to bump someone.

In this case, they were looking for the passengers who got the best deals on their tickets, because they weren't going to make a cent on the transport of employees.
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and in the event of a refusal to accept?????
 
SuperstringTheory said:
Cops are part of the government. To me, "big government" means illegitimate government. According to google that's the common way it is used. What does it mean to you?

Cops tend to settle things by threatening and then using force. Who does not know that?
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Well by that logic all government would be "Big Government". That's just anarcho-libertarian nonsense rhetoric.
 
SuperstringTheory said:
What ru on about? I have not said a damn thing about the "pr disaster." That's not really the market solution. The market solution would have been to tell them to offer more for passengers to accept being bumped.
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Has it occurred to you that there were a vast array of peaceful outcomes that would not involve the market at all? Like...guess no one will get off...ok...lets fly to Louisville.
 
Mott the Hoople said:
It's local! :)
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Neo-confederates might think of big government as the federal government only but that is not how libertarians use it.


https://en.wikipedia.org/wiki/Big_government


Big government is a term generally used by conservatives and libertarians to describe a government or public sector that they consider to be excessively large and involved in certain areas of public policy or the private sector. The term may also be used specifically in relation to government policies that attempt to regulate matters considered to be private or personal, such as private sexual behavior or individual food choices.[1] The term has also been used to define a dominant federal government that seeks to control the authority of local institutions - an example being the overriding of state authority in favor of federal legislation.[2]


Big government is primarily defined by its size, measured by the number of employees or budget, either in absolute terms or relative to the overall national economy. The size of government can also be reckoned by the number of "spheres of involvement". The concept can also be defined by the perceived role of government in society, the quality of services (that is, the impact of government effort), and the degree of democracy and societal representation.[3][4]
 
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