Part I: From Event Recap to the Common Practice of Overbooking
Monday, Apr.10, in the afternoon. I was waiting in line at Washington Dulles Airport, ready to board a United Express flight back to Philadelphia. The TV screen near the boarding gate was showing some CNN sports news, which I often pay the least attention to. Suddenly, I noticed a few people raising their heads almost unanimously from their private tiny screens, casting anxiously surprised looks onto that CNN channel. A video of a wounded passenger being dragged off a plane was shown on the screen, with that male passenger screaming. The caption was: United forcibly dragged a passenger off an plane in Chicago. The gate agent stood in front of me, not at all unnerved by the small commotion, and spoke into her microphone with professional smile: welcome to United Express flight 6138 with service to Philadelphia. We are now pre-boarding customers with disabilities, uniformed military personnel, family traveling with children under 2, and our Global Services members.
United aircrafts in Newark Liberty International Airport (EWR) (picture taken by myself in November 2016)
It was until later that I learned much more fully about the incident that took place on United Express flight 3411 from Chicago to Louisville. To put it simply: on Apr.9, flight 3411 was overbooked. The gate agent finally offered up to $800 United travel certificate in search of passengers who would voluntarily rebook their flight, but the attempt failed. As a result, four passengers were asked to leave the aircraft involuntarily. While the first three complied with the instructions they received, the fourth passenger, David Dao, declined the request. The crew members then contacted the law enforcement to have him be forcibly removed from the aircraft: several Chicago Aviation police officers dragged him off the plane through the aisle with his mouth bleeding and him shouting: “just kill me.”
Many other passengers onboard recorded this violent incident and uploaded their videos onto social medias, where people all over the world exploded with rage. This horrible treatment of a passenger even led to a boycott against United Airlines, most notably among major Chinese social media platforms: unsatisfied passengers suddenly found a good platform to share their complaints about United, and some previously loyal customers sent videos of themselves destroying their United-branded credit cards to show their outrage.
Due to the wide online coverage of this horrible event, discussions around it have extended to many other arenas like social justice. But here, as I am focusing on the study of commercial aviation, I hope that I could bring in a broader perspective from the industry and relate this single event to something much more common.
Overbooking is a legal method almost universally adopted by airlines, global and regional alike, to maximize their “occupation rate of flight guest seats,” an important index that determines a carrier’s profitability. You may wonder why airlines always sell more tickets than the amount of seats they have; the reason is simple: approximately 5%-15% of passengers do not show up for on every flight. This puts the air carriers in an interesting position in which their inventory control staff need to create or use different models to predict the no-show rate and develop the most successful profit-maximizing overbooking strategy.
While this process involves data analysis from the past and special handling of large events (like the Super Bowl) and holiday peak dates where more passengers tend to show up, there are chances that a passenger with a confirmed itinerary is denied to board. Before anyone is actually denied to board, however, airlines agents will usually offer certain compensations (mostly travel certificates or free upgrade for a later flight) and look for less time-sensitive passengers. It is when these offers do not appeal to enough passengers that the process of involuntary denied boarding takes place. While it is legal for airlines to deny passengers to board in an event of overbooking, the Department of Transportation does require that airlines arrange alternative means of transportation and that 200% of the fare ($675 maximum) be compensated to the passenger if he/she arrives 1-2 hours late, with the amount jumping to 400% of the fare ($1350 maximum) if he/she arrives more than 2 hours late.
This is the end of Part I. While I do not intend to into the specifics of overbooking (which belongs to the field of revenue management and involves mathematical modeling), I have found the following article particularly intriguing. Click here for a comprehensive article if you want to learn more about revenue management.
Thanks for reading and I’ll be up here shortly to post Part II, which includes more of my personal thoughts and analyses of this incident after having laid some groundwork.