Comment by rconti
Comment by rconti 2 days ago
No, overbooking is a business decision justified by the fact that, statistically, not all passengers will actually show up for their flight, and lower load factors cost money.
Comment by rconti 2 days ago
No, overbooking is a business decision justified by the fact that, statistically, not all passengers will actually show up for their flight, and lower load factors cost money.
A 2019 study of 5 European airports in 2019 had no-show rates of 14.4%: https://www.ozion-airport.com/product/comparative-analysis-n...
However, my understanding is that airlines have much more sophisticated per-flight and per-passenger models that calculate the predicted no-show factor based on the historical rates for that particular route (e.g. you're more likely to get more no-shows in business class flying from NYC to SF compared to holiday travelers with a reservation on the Florida Keys)
That blows my mind, I would expect maybe 1 or 2 passengers per plane at most. I'm trying to think of what factors would cause that many no-shows, it has to be mostly missed connections?
I can't imagine spending hundreds of dollars and just not showing up.
Delays getting to the airport and missing the plane. Cancelations with full refund. "Hidden city" ticketing. Layover delays. Businesses booking blocks. Flexible flights ( https://www.travelperk.com/guides/flexible-travel/flexible-f... ). Changing / rebooking flights for an earlier or later time.
A friend of mine works for a Management Consultancy firm and they have full flex tickets if they miss the 8pm flight home they can take the next one or fly back the next morning. All without additional fees. So I believe business travel is the biggest factor when it comes to missed flights.
Side note: His employer is the biggest client of a major European airline.
Keep in mind they sell a lot of tickets where one of the features that allows for a premium price is that they allow late cancellations or changes to other flights. Holiday travelers are pretty "reliable", but business travelers might have changed needs at the drop of a hat (say you meet another prospective client on a business trip and decide to stay another day to fit in a face-to-face meeting).
I'm sure other factors such as sudden illness and migrateable tickets make a sizeable chunk too.
They probably do pay millions of dollars in wages for business analysts to figure out what this rate is on their flights.
They probably just have an SSRS report that prints out in a few dozen offices automatically on some schedule.
I'm not trying to be pedantic but this is table stakes stuff. I know we're supposed to shy away from saying things like this but compared to the other engineering that airlines have to do, this is easy. It costs - at most, including wages - a few tens of thousands of dollars yearly to come up with these figures. It's a fraction of the salary of one United Airlines BA.[0] This cost might go up if one of the senior developers convinces their boss that this needs to be a machine learning model but unless they're resume pumping it's going to be at most PCA and a regression.
This is not a team of people working for months on this one thing.
[0] https://www.glassdoor.com/job-listing/analyst-revenue-manage...
What is the "no show" rate?