Originally Posted by
sbm12
If IM/RM is doing their job best then the Y seats that are going to sell should be held for them by not selling the GLSTK seats in the first place rather than bumping those customers. Even with the breakage on the VDB funny money you're still spending more than you should be generally with little RoI. Finding that balance is the goal and if the company is not bumping but also not limiting Y seat sales at the end then they're doing something quite right.
Actually, I think you are wrong. The reason that you sell GLSTK fares is that they are typically sold months in advance. That's money in the bank -- a free loan to the airline! It also assures them a 'baseload' for the flight.
Selling full fare Y tickets at the last minute is much more of a statistical process. You will never accurately predict precisely how many Y's you'll sell 3 days before a flight -- just a mean, and a std deviation. So if your model says that you will sell 6 Y fares 3 days out, with a stdev of 3, how many seats should you hold back? 6? 7? 8? 9? And what about when the 10th guy shows up and wants to buy a Y ticket? Do you turn him away because your model didn't predict him? Of course not, you smile, take his $1200 and then go bump some K-fare chap by giving him his E[$400]=$200 voucher!
(Actually, I'm pretty sure the CO way of doing business says they are smarter then their customer, so since the model didn't predict him, he must not really want to fly that day..... LOL)
You seem to think that IM is a deterministic process. Ever heard of stat arb? It's pretty amazing stuff.