Originally Posted by
AeroWesty
Interesting that UA had the highest IDB rate while at the same time they also had a financially significant lower than predicted use of issued tickets. I wonder what the corollary is there.
Well, it's a different metric. That predicted use formula is calculating the percentage of revenue that's been used, so it doesn't mean that the ticket is not flown in that they have a no show. If a ticket is not flown and the revenue is kept, then that would be considered used and they could recognize that revenue at the time the ticket is cancelled (i.e., changes must be made by time of travel or ticket has no value).
What that formula represents in the context of them having to warn on profits like they did a few weeks ago is that they used materially fewer tickets than they had statistically anticipated. What that suggests to me is that they had a higher rate of advance purchases, and a lower rate of closer-in purchases than they had previously, which is what they based their estimates on.
That would also seem to jive with the anecdotal evidence of business customers leaving, not to mention the evidence demonstrated by the lower financial results, as business customers tend to pay higher fares and book closer in.
Originally Posted by
mitchmu
So, this means that COdbaUA is actually making a conscious decision NOT to offer the level of compensation that DL is offering, that makes a flyer feel OK with being denied boarding.
That certainly could be part of it. Another part may be the ability to reaccommodate effectively. A cheap bump may be fine if the reaccommodation is good (e.g., minimal delay, quality seat on rebook, etc.).
However, I have seen a number of lowball offers from COdbaUA that are for $200 for an overnight. While it may work in some cases, it may not work so well in others.
Originally Posted by
mitchmu
There are regulations for minimum allowable compensation in IDB cases, right? So, this means that, most likely, CO has decided that they won't pay more than the minimum required by law, and that DL is probably paying more than the minimum required by law, to convert IDB to VDB and end up with a happy PAX.
IDB compensation is regulated, and in many cases is more than the VDB compensation offered. I've heard many stories from GAs where they are writing significant checks, sometimes $1,000 or more, for IDBs.