Originally Posted by
sds1493
According to
this there were 365,000 DBs (342k/23k voluntary/involuntary) in the US in 2017 so it sounds like there is plenty of room for improvement. Granted a lot of the DBs are due to irrops but the overselling model also accounts for the
x number of passengers who simply decided not to travel yet didn't inform the airline.
Rather than paying 'pre-announcers'
compensation, give a small-yet-significant incentive ($20?) cash to their bank account for informing the airline. More information = less uncertainty of what
x is = better pricing/overselling models.
Perhaps only offering the cash incentive to pax on already-full flights.
How does this sound?
DBs won't drop to 0 so, being generous, assumed they can cut this number by 50% so 182,500 DBs. Assume an average cost per DB of $500 (again...being generous) and you get a total DB cost of $91.25m per year.
In 2017, US carriers carried a total of 965m passengers. Assume 90% of them are on non-refundable tickets, which gives you 868.5m passengers that might qualify for this. Assume ticket breakage of 1%, which gives you 8.685m passengers who will take you up on your offer of $20 to let them know in advance. This would cost airlines $173.7m per year.
Now, sure, not everyone who is going to no show is going to tell the airline in advance for $20 so the cost of that program will go down, but so will the savings number from reduced DBs so I still don't see how the economics work.