Bump in the Night and Day on Airlines


It’s not exactly 2+2=4, but I think it still qualifies as a basic math equation. The breakdown:

Airlines reduce the number of flights as well as the sizes of planes (fewer seats) + business travelers and others returning to the airways following the worst of the recession (more people looking to fly)  = a likely record year for bumped passengers.

I told you it was pretty basic. In the first quarter alone, nearly 220,000 passengers bought tickets but were unable to get on the flights. We’re not going to get into a detailed discussion of overbooking, but those numbers are a problem (they are 25% ahead of a year earlier). Since we’re into the straighforward talk, I’ll share the comment of a Florida airline economic professor, who said, "If you go to a concert and there are 1,000 tickets, they don’t sell 1,100 tickets. They sell 1,000."

Some more numbers to keep in mind:

  • After a 6.9% reduction in capacity among the six biggest U.S. airlines in 2009 (the biggest cut since 1942), another 2.8% was slashed early this year
  • Southwest, probably the top dog in the business whether judging by results or personal experience, typically sells 140 to 142 tickets on a flight with 137 seats. The reasoning: empty seats mean lost revenue, raising the prices even more for future flights
  • Despite nearly 89% of the first-quarter bumpings being voluntary (travelers accepting vouchers or other incentives to switch flights), the involuntary rate of 1.73 for every 10,000 passengers was a 37% increase. The 2009 rate of 1.19 was a 13-year high

In my infrequent travels, the search for those willing to give up their seats has seemingly been on the increase. I rarely have the flexibility to participate. For business travelers, being bumped can have costly consequences.

Airlines are struggling and this is part of their attempt at a solution (along with those nasty baggage fees; I’ll save that for another day). OK to overbook or do we need a no-bump game plan? You make the call.

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