Why is AC allowed to get away with overselling flights?

citrus242 · Post by **citrus242** » Sat Jul 15, 2006 7:34 am

I have a friend at AC that tells me they quite often oversell flights by as much as 50 seats? How is this allowed? Are you allowed to sell an item that you know does not exist? Does AC say to the passengers "sorry we intentionally oversold the flight by 50 seats" or do they just say "sorry the flight is full". Either way I would be PISSED if I just drove through 3 hrs of traffic to find this out. If the public is not aware of this I think they should be. You walk through canadian terminals these days and there are quite a few billboards of Westjet ads stating they promise never to oversell a flight. Again this is just a reflection of AC and their customer service. No wonder why WJ is going to blow you out of the water in the coming years.

loopy · Post by **loopy** » Sat Jul 15, 2006 7:44 am

From today's Toronto Star:

http://www.thestar.com/NASApp/cs/Conten ... 8332188492

If this is the model for the "recovered and healthy" legacy airline going into the future

, they better wake up! It won't be too long before their poor customer service begins to have a financial impact

justanotherpilot · Post by **justanotherpilot** » Sat Jul 15, 2006 7:55 am

Not to mention their cabin crew are unfriendly and not helpful. Would it kill you to smile once in a while.

gonfly'n · Post by **gonfly'n** » Sat Jul 15, 2006 8:47 am

coming back from Edmonton I was informed that the flight had been overbooked. They offered to pay for my hotel room......never the less i could see how it inconveniences a lot of people.

TopperHarley · Post by **TopperHarley** » Sat Jul 15, 2006 9:21 am

Every airline oversells their flights. It's part of "revenue management." A large percentage of people usually don't show up for their flights, so if an airline only sold the bare minimum number of seats available, they would be taking a loss on pretty much every flight.

The problem, however, is trying to guess that magic number of how many seats should be oversold. Computers are used for this, which try to predict how many no-shows there will be, based on past data. It's obviously impossible to come up with the right number, and that's why sometimes passengers get turned down.

It's part of the business and is certainly not isolated to Air Canada.

Jeremy Kent · Post by **Jeremy Kent** » Sat Jul 15, 2006 10:16 am

C-HRIS wrote:Every airline oversells their flights.

I don't think Westjet does.

Longtimer · Post by **Longtimer** » Sat Jul 15, 2006 10:21 am

C-HRIS wrote:Every airline oversells their flights. It's part of "revenue management." A large percentage of people usually don't show up for their flights, so if an airline only sold the bare minimum number of seats available, they would be taking a loss on pretty much every flight.

The problem, however, is trying to guess that magic number of how many seats should be oversold. Computers are used for this, which try to predict how many no-shows there will be, based on past data. It's obviously impossible to come up with the right number, and that's why sometimes passengers get turned down.

It's part of the business and is certainly not isolated to Air Canada.

The low fare carriers don't have the same problem as the majority if not all of their fares carry cancellation charges and penalties if you don't travel as booked. The majority of AC fares (% of seats sold or so I am told) don't carry any penalty for not turning up for the booked flight.

Westjet rules which apply to all of their fares.
Departing
- SPECIAL FARES
- Change and cancellation guidelines are based on the fare which is being changed or cancelled.Same Day Cancel - , All fares, taxes, and fees may be put into a credit towards a future flight with WestJet, or the guest can pay a $20 CAD/US cancellation fee (plus tax) per itinerary with the remainder refunded back to the credit card.After the day of booking, changes to this fare are subject to a minimum $40.00 CAD/USD change fee (plus tax) and any difference in fare, per person. Name changes are subject to a $40.00 CAD/USD fee (plus tax).
- After the day of booking, all fares, taxes, and fees are non-refundable; however, they may be used as credit towards a future flight with WestJet.Cancellations are subject to a $40.00 CAD/USD cancellation fee (plus tax) per person.
- Credit files are created for the remainder of the funds, and will expire after one year.
- Changes and cancellations are accepted up to 2 hours prior to flight; however, guests who do not show up for a flight do not receive a credit or a refund
Air Canada on the other hand does not apply any penalties to their Latitude, Latitude Plus or Executive class bookings with the result that folks who pay those fares will not think twice about no-showing.

ahramin · Post by **ahramin** » Sat Jul 15, 2006 10:21 am

C-HRIS wrote:Every airline oversells their flights.

Westjet doesn't and neither does JetBlue just to name a couple.

The less one makes declarative statements, the less apt one is to look foolish in retrospect.

citrus242 · Post by **citrus242** » Sat Jul 15, 2006 10:52 am

Yeah but oversell by 50 seats. Thats pure BS expecting 1 in 5 passengers to not show up. They should be charged for selling a product they don't have in possession. I am 100% sure there are laws against that.

xsbank · Post by **xsbank** » Sat Jul 15, 2006 11:08 am

Thing is, the seats are paid for whether or not anyone shows up for the flight. What they are trying to do is maximize their revenue, which means 2 or more tickets for every seat.

Westjet gets you by giving the first few customers a cheap seat, using advertising that gives the impression that all the seats are cheap, but in my experience, charging more than A/C. Besides, who wants to make 4 or 5 stops to get from Ottawa to YVR? No-frills doesn't mean cheaper.

Deal with it.

chancellor · Post by **chancellor** » Sat Jul 15, 2006 11:13 am

These airlines should make the fares non refundable within 24 hours. Most of the no shows are the ignorant business types un fortunately the ones that get screwed are folks that save up to take the family on vacation.

gr8gazu · Post by **gr8gazu** » Sat Jul 15, 2006 11:24 am

xsbank wrote:
Westjet gets you by giving the first few customers a cheap seat, using advertising that gives the impression that all the seats are cheap, but in my experience, charging more than A/C. Besides, who wants to make 4 or 5 stops to get from Ottawa to YVR? No-frills doesn't mean cheaper.

I think people buy the tickets knowing full well what the price is. The ones that got the cheap seats just booked sooner.

4-5 stops between YOW and YVR?? Really? That would suck. Where all do they go between YOW and YYZ because I frequently take the YYZ-YVR segment non-stop?

Jeremy Kent · Post by **Jeremy Kent** » Sat Jul 15, 2006 11:25 am

Well, a couple points...

It's always been this way... well as long as I've graced God's green Earth, anyway. I'm sure there is NOT a law against it, citrus, otherwise they wouldn't be doing it. If you look in the fine print, I imagine it's clearly spelled out there somewhere. It is perhaps one of the benefits of the advent of LCCs... if you want to buy a seat and show up at the last minute knowing it'll still be there, go LCC. If you're an "ignorant business type" who requires more flexibility (the strength of air power, incidentally!), go Legacy.

AND -- more of a pet peeve than a solid argument, but -- if you're flying an airline that oversells and want to ensure that you have a seat, don't check in 30 minutes prior to push!! I know the majority of people are pretty green when it comes to flying... but if I can somehow show up on time I'm not sure why it's so complicated for everyone else.

TopperHarley · Post by **TopperHarley** » Sat Jul 15, 2006 11:39 am

ahramin wrote: The less one makes declarative statements, the less apt one is to look foolish in retrospect.

Ok, I'm sorry, maybe not every single airline oversells their flights, but every airline employs one mechanism or another for revenue maximization. If they don't, then they're not operating in a very intelligent manner.

2milefinal · Post by **2milefinal** » Sat Jul 15, 2006 1:00 pm

From the STAR article
"If lightning is detected around the airport, Transport Canada requires a "red alert" to be imposed. This brings all activity on the ramp to a halt."

Is it really a TC thing? I thought it was a company(AC) thing.

fingersmac · Post by **fingersmac** » Sat Jul 15, 2006 1:22 pm

This isn't just a phenomenon associated with the aviation industry. It is common practice in the hotel industry to overbook rooms. The hotel would rather walk guests to another hotel than have empty rooms. Like C-HRIS said, they want to maximize their revenue.

ahramin · Post by **ahramin** » Sat Jul 15, 2006 1:22 pm

Hey C-HRIS, what was JetsGo's mechanism for revenue maximization?

fingersmac · Post by **fingersmac** » Sat Jul 15, 2006 1:28 pm

$30K "training" bonds?

TopperHarley · Post by **TopperHarley** » Sat Jul 15, 2006 2:00 pm

ahramin wrote:Hey C-HRIS, what was JetsGo's mechanism for revenue maximization?

I think fingersmac raises a good point

Although they may have been more focused on keeping expenses low (and many would argue, unreasonably low) as opposed to maximizing revenues (profit= revenues-expenses...try to maximize R, while minimizing E, all the while keeping in mind that some goals are attainable and others are unrealistic). When a company starts to offer $29 fares for a cross-Canada flight, that's usually a sign that something is not quite right!

Seeing how most expenses for an airline are fixed costs, trying to maximize revenues is usually chosen as the more viable route.

citrus242 · Post by **citrus242** » Sat Jul 15, 2006 2:37 pm

This isn't just limited to last minute checkins. I bet you (not bet actually know) that flights 2 weeks from now are oversold by 50 seats and I bet if I called right now and booked a flight on that particular flight do you think the CSR would even inform me of the flight being that oversold? Not a chance. They would wait until you checked in after spending the whole day travelling to catch your flight. And the checkin people wonder why we customers get bitchy NO S__T.

Jeremy Kent · Post by **Jeremy Kent** » Sat Jul 15, 2006 3:52 pm

Overselling with Opportunistic Cancellations

Interesting read... goes to show at least that there is a method to the madness, and that Air Canada and like-minded carriers do not oversell just to tick you off, citrus. Protesting is about as useful as is my griping about gas prices... c'est la vie!

rd1331 · Post by **rd1331** » Sat Jul 15, 2006 4:03 pm

It is completely legal for them to do this. Most airline, more than 50%, do this and have done this for years. It is part of the airline industry. It is the odd few like Westjet and Jetblue that do not.
IATA, International Air Transport Association, has been allowing this for years. It is rare that someone has to be involuntarily taken off the flight as passengers will normally volunteer for the next flight with a voucher.

Jaques Strappe · Post by **Jaques Strappe** » Sat Jul 15, 2006 6:00 pm

Most Legacy carriers oversell their flights based on statistical data which shows a percentage of "no shows" for that route. If a boarding card is not used, the airline doesn't get paid. The only way to ensure proper revenue is to either fly an airplane as full as possible or charge those who don't show. Guess which option is more popular?

Another huge cost to the airline and general inconvienience to the passengers is the idiot who checks in, checks his bag, then heads to the bar to watch the game and doesn't show. Now we have to incur at least a 30 minute delay to off load the belly, retrieve his luggage and re load the hold. This can cost the airline hundreds of thousands of dollars in busted connections, illegal crew rest etc.. This happens daily.

Rather than just blame the airline, think about it a little, there is usually an explanantion.

Bugz · Post by **Bugz** » Sat Jul 15, 2006 7:33 pm

xsbank wrote: Westjet gets you by giving the first few customers a cheap seat, using advertising that gives the impression that all the seats are cheap, but in my experience, charging more than A/C. Besides, who wants to make 4 or 5 stops to get from Ottawa to YVR? No-frills doesn't mean cheaper.

Deal with it.

For your information, neither AC nor WestJet have YOW-YVR direct flights. Each do it with one stop. If you were to book for tommorow the prices would look like this, including taxes:

AC: $ 539.19
WesJet: $ 497.85

Spend the 10 seconds on research next time

charlie_g · Post by **charlie_g** » Sun Jul 16, 2006 6:32 am

The fact that Westjet does not overbook is one of many reasons why I haven't flown AC in years, and am in no rush to unless I have no other option. The last thing I need at the beginning or end of a trip is the stress of walking up to the counter, hoping that the seat *that I paid for* is still available.

Overselling seats is just another reason why AC doesn't get it. As Westjet continues to grow, they will eventually bury AC and it's antiquated approach to the airline business.