Newspaper article St Louis Post-Dispatch (MO)

Nicklaus: Publicity Makes Airlines Clean Up Their Act on Overbooking

Newspaper article St Louis Post-Dispatch (MO)

Nicklaus: Publicity Makes Airlines Clean Up Their Act on Overbooking

Article excerpt

I hate to burst anyone's bubble, but you're probably not getting a $10,000 offer the next time Delta or United overbooks your flight.

Even so, that deceptively large sum should help you and other passengers avoid the fate of Dr. David Dao, who was dragged from a United Airlines flight because he just wanted to get home to Louisville, Ky.

Publicity over the incident caused the airline industry to rethink the way it handles overbooked flights. Delta Air Lines, where involuntary bumpings already are rare, led the way by allowing supervisors to offer as much as $9,950 to passengers willing to give up a seat.

Its previous $1,350 limit is the maximum the Transportation Department requires airlines to pay someone who is bumped involuntarily. Until the Dao incident, airlines were willing to hide behind government rules, inconveniencing customers while saving money.

Last week, United authorized offers of up to $10,000 to customers who give up seats. Southwest Airlines said it will simply stop overbooking its flights.

These are passenger-friendly moves, but here's a reality check: Offers to bumped passengers will almost never get close to $10,000. And Southwest, which bumped 14,979 people involuntarily last year, almost certainly won't drive that number to zero.

Daniel Rust, assistant professor of transportation at the University of Wisconsin-Superior, thinks the big maximum offers from United and Delta "are for public consumption. Airlines are saying, 'We are serious about this.'"

"The higher cap is going to resolve almost any situation," says David Swierenga, of consulting firm AeroEcon. "I can't imagine them not being able to get volunteers for well under $10,000."

Overbooking situations proceed like an auction, with the airline raising its bid until a volunteer gives up his or her seat. In the incident in Chicago, United offered $800 and got no takers, but a $2,000 or $3,000 sweetener might have avoided a lot of bad publicity. …

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