Sorry, it is.

You come back with the same point again: "but if the cabin is full..." - that's the point you miss. The airline doesn't fill the whole cabin before showing zero availability. There is inventory left, which can then be given to booking guarantee. Please read post #5 which explains how airlines do it (=not my invention, but this is how airlines manage their inventory every day). You will see that this is designed in a way not to bump anyone.

You only need to bump someone if there are more people turning up as forecasted, but that problem of the algo getting it wrong already exists today. I don't have the number of denied boardings for AFKL, but it's extremely small. So the accuracy of the forecasts is very good.

Also the question you ask about what KL should do if someone with booking guarantee shows up at the gate and the cabin is already filled with people. This has nothing to do with booking guarantee, which is, as explained, a mechanism that gives people a confirmed seat 24 or maybe 36 hours before departure. It's not about turning up at the gate and getting people off the plane.

I think the most likely case for having 6 or 7 people in WL is that they themselves were involved in IRROPS, doesn't need to be major IRROPS, could be as simple as a missed connection due to slight delay.OK so that's for short-haul flight, I don't disagree with you here, my entire post is about J long-haul...
I don't disagree it's a good idea, but if you really have to fly on that flight, you always have the option of flying in Y.Well, no, you might be dealing here with very small numbers, all your examples are about "2 passengers", but what if in fact the algorithm says it's actually more like 0.1 passengers?

But not several days before?

I just gave you examples from this week, which were shorthaul. Have I also been on wait list for long haul? Yes, numerous times. Monday mornings to JFK, or back on Thursday evenings or Friday. For example, check availability of AF 9 or AF 19 tonight from New York to Paris. Zero seats in Business. Which means that you cannot always get a seat.

So then what do you suggest AF/KL do, put availability of 0.9?

PMNW had a rule for a while (I don't remember the years) where Plats were guaranteed FULL Y seats 24 hours in advance and FULL J 7 days in advance IIRC, on any worldwide NW operated flight. I once asked how this would work if the flight were overbooked and whether as the last ticket purchased I would be on the top of the list to be bumped. The response was that NW would pick someone else to IDB if needed, basically paying someone else to not take the flight or be downgraded so that I would get the seat I had booked under the program.

At some point very bad weather was going to cause IROPs the next day (causing an overnight delay in my case) on a TATL WBC ticket and I called the NW Plat line (Chisholm) to try to re-route myself even though my flights had not yet been posted with delays. After conferring with a supervisor, the Plat agent agreed to rebook me onto a different TATL flight and told me to just get to the airport early to have the ticket changed, etc., as everything had been documented. I did so, and then boarded when WBC was called. Along the way a GA said that my seatmate and I were similar cases, but with him being Gold while I was Plat, she had given me the aisle seat and him the window. During PDBs we were chatting a bit, but then stopped when a couple who were boarding loudly pointed to us and talked to each other about how we had taken their seats and they had been kicked back to coach. We just looked at each other and smiled, although it seemed from the conversation we couldn't help overhearing that they had been well compensated for the downgrade and weren't really unhappy about the situation.

You Tube

I am not talking about short haul network. The whole discussion is about the longhaul business guarantee

We largely agree, have a few misunderstandings - and there is one point where you lost me.

Huh? Not at all.

There are *two* things which I believe you have mixed up in one statement:
1) What indeed I am certain to be right: "They could do it". aArlines with sophisticated inventory management have the possibility to manage inventory for certain customer segments by using fare buckets. They do that successfully today. The algorithms doing that are not 100,00% fail-proof, but close enough for airlines to feel comfortable with the very small number of IBD that creates. That is an undisputable fact, and I keep repeating it when it is being put in question. On this point, only on this, yes, I maintain, claiming the opposite is wrong. I would love to move past that point so that the second one, on which I have no fixed option at all but rather ask a question, can be discussed:
2) I *ask the question* why AFKL doesn't do it. There has been very little discussion about that, although that is the actual question that I put out. The few statements I made were that neither do I know whether they have considered it or not. So I am not saying that anybody is right or wrong or that AFKL is wrong not offering it - I just wonder why they don't. And I point out that some people would find it valuable.

Even if I repeat myself: I repeat that I do not know whether AFKL knows about the existence or doesn't. I do accept the possibility that they know it exists.

I concur. Maybe they have come to that conclusion after consideration. Or maybe they haven't considered it (you said in your last post that you were sure that they had considered it. You seem to be sure, I am not. Not a problem)

Well good, if you are so familiar with it, why are we having the debate about booking guarantee creating more IDBs.

Precisely, that is how inventory management works! That is already how they manage their fare buckets today between J, C, D, Z, I and so on: they close lower booking classes so that they can keep higher ones open. At one point they close them all to avoid creating too much overbooking and having to bump people. Nothing to do with booking guarantee. For instance, if the algo gets it wrong and closes I, Z, D, and C too early and only leaves seats in J because the airline expects people to turn up and buy J but then they don't - unsold seats are the result. And vice versa, if you leave availability open for too long (=create too much overbooking) then you create IDBs. We agree on that, don't we? Now just apply exactly that principle to booking guarantee: make the booking guarantee class the highest booking class (with the highest protection level), then close lower booking classes earlier depending on what you expect for the highest booking class. Exactly the same thing as today. Booking guarantee is just a different bucket, the one that you close last.

?? This is the part I don't get. You accept that inventory management is good enough to manage inventory between the different fare buckets, that it manages to close fare buckets earlier or later based on predictions, differentiating between different protection levels - but it wouldn't be good enough to manage one additional bucket using precisely the same methods? Why not?

I agree. In today's world, this is why they leave lower booking classes open long enough toavoid unsold seats. In the booking guarantee world, they would leave "non-Elite" availability open long enough to avoid unsold seats.

To be precise: "leave unsold or steer overbooking in such a way as to be able to accommodate these pax". But yes, that is how it works. Just like the highest fare classes today have the highest protection levels and are the ones closed last.

You are right. You would need 100% reliable inventory management to avoid unsold seats or to avoid overbooking. But that is the case already today. See above: if you close lower booking classes too early you may find yourself with unsold seats if you mis-predict the number of people buying at high fares; or if you leave booking classes open for too long , you create too much overbooking. But that is already a problem with inventory management today, predictions can be wrong. Not different if you introduce booking guarantee. You can get it wrong as well in the future, but there is no reason why you'd get it wronger than before.

In theory, yes. But, the way this was explained to me by a revenue manager is that you hardly have any more fluctuation in the last 24 hours before departure. The ratio of booked seats/available seats (the "overbooking factor") stays pretty stable, and waitlists hardly move.

This is where I fundamentally disagree with you. I believe that over time repeat high fare customers have higher economic value for the company than one-time customers. I would look at LTCV (long term customer value or life time customer value, depending on whose term you use) rather than the economic value a customer generates with one flight. Especially since the booking guarantee customer would in any case have to pay the highest fare. Result: the booking guarantee customer has higher lifetime value and equal transaction-value-on-this-flight.

Whether Plats are always higher LTCV customers is a different debate and may well be questioned.

No. What I have certainty about is that inventory management systems can run a booking guarantee scheme without problems. That is one statement.
What I have no certainty about at all and said so repeatedly and therefore asked the question was if they had considered and dismissed it or never considered it. I don't know. That is another statement.

Yes. Because I can think of some customers who find this valuable.

I accept that. I have absolutely no basis for believing the same or refuting it. Maybe you have some evidence. I just don't know.

Because you mention another airline's inventory.

Is it? Since when? Not in my original quesiton at least. Because it's also in the short haul network that I would find booking guarantee super helpful and where it is sometimes needed.

Yes, you are right. This is exactly the situation where bumping pax will be unavoidable and it will cost the airline. The very same moment where those that can benefit from the booking guarantee will say "Those guys really got me out of a critical situation". In marketing there is something called the gratitude moment which translates into higher loyalty, which is worth money (FYI: there are firms who actively play with that. Make small issues appear big and then let the customer agent who solves the problem appear as the saviour, and create the moment of gratitude, which has been proven to translate into higher lifetime value of those customers)

But there are ways around it: AFKL could suspend booking guarantee in the case of network meltdowns (strikes in France...) and simply revert to the promise that already exists today: "you'll be top of the wait list."

Why? Hypothetical example: ff Lufthansa has to bump a passenger from Dublin to Athens; it can put him on one of four LHG A320 planes that leave in the next couple of hours. Each of those next planes has 160 seats, a total of 640 seats. One connections is via Frankfurt, one via Munich, one via Zurich, one via Vienna. To re-accommodate the bumped pax it has to find just one seat among the 640 seats that leave in the next hours.

Now if KLM has to bump a passenger from Dublin to Athens; it can put him on one of four A320/B738 AFKL planes that leave in the next couple of hours. Each of those next planes has 160 seats, a total of 640 seats. Three connections are via Amsterdam, one via Paris. To re-accommodate the bumped pax it has to find just one seat among the 640 seats that leave in the next hours.

The point that I am trying to make: it doesn't matter if you have four hubs or two or three. What matters is how much capacity you have to re-accommodate bumped passengers. It doesn't matter if all those re-accommodation solutions fly through one or different hubs.

The debate would then be if LHG has a much denser network than AFKL which would allow it to have access to more inventory. Probably the answer depends on what connections one is looking at, and to what extent airline alliances are being taken into account. Being bumped of a Lufthansa flight from ATL or Rio de Janeiro will leave you in a worse place than bumped off an AF flight. LHG has one daily to each ATL and GIG, whilst AFKL have three dailies to ATL (plus the DL JV) and 18 weekly flights to GIG. Bangkok would be the other way around: one AF and one KL, but three (or even four?) daily LHG flights and alliance partner TG.

They do. Already today. Also in Business Class. Nothing news. Algos are imperfect.

You would be right if booking guarantee worked until the last minute, because as you say it would remove the concept of sold out. But that's not what I suggested. The flight *is* sold out even for everybody, including the top customer 24/36 hours (pick your number) before departure. I just apply the same principle that inventory already apply today: close lower booking classes earlier to only leave the higher ones open. I just make the booking guarantee class the highest one.

Yes, we agree.

So far so good. I did get a feeling that you think they didn't have considered it and if they did, they would have offered it. But of course, I can be wrong.

Because it is necessary that a booking guarantee mechanism increases potential IDBs, as I shall follow on:


The key difference is, that even if you leave availability open for too long, you might easily end up with lower income due to lower fares getting sold, but you can still zero out all classes at capacity (or capacity +1 or capacity +2, as you desire, whether that is specific flight capacity, capacity for the rest of the day, group capacity etc.). General guarantee mechanism (i.e. open to all eligible customers at all times) removes this option as it forces theoretically up to unrestricted (but always non-zero) availability.
Eventually, someone will use this non-zero availability to force an (undesirable) overbooking (which is not much of a problem in Y, but is a much bigger issue in J).



Because I believe that booking guarantee demand is much more volatile than general demand and as such less predictable.


I would say the reason is necessarily increased volatility of guaranteed flight demand + inability to zero out a flight in advance.


I would also not expect this to actually exist in the wild, but it would be an option, if it existed.


That is an entirely fair belief. Probably less likely to be shared by AFKL, judging by signals such as the state of Ultimate program...


I would still say it's riskier than not having such a scheme; that however does not mean it can not be worth it to an airline. I just think AFKL has decided, opposite to LHg (and in line with most other airlines around the world, it seems) that it isn't.


Some? Certainly. Enough? That'd debatable.


As a point of comparison of what can drive the difference in risk assesment. Certainly general revenue management takes the structure in account in both cases. ​

OK, maybe I shouldn't have used the term "whole discussion", although to be fair, only one other poster also mentioned short haul, in reaction to your reaction to them, and to point out that they don't disagree with you.

That is actually an extremely good point I haven't considered...


Yes, potentially, or limit the number of "guarantee" seats on any given flight to, say, 2... however, that sort of defeats the purpose of the guarantee I'm afraid, making it sort of a "we'll take you if we have place" stand-in with only slightly better conditions for qualifying elites than general public.

The difference is, if there is flight disruption in Amsterdam, you are down to 1/4 capacity. If there is a disruption in Frankfurt, LH still has 3/4 capacity. Or maybe 1/2 of F seats, if we take a hypothetical destination served from FRA and ZRH with F and MUC and VIE with no F.


Not particularly more inventory, but more distributed, and therefore more disruption resistant.


Yes, but a guarantee concept would make the imperfection even more pronounced, IMO.

It removes the concept of "sold out" at any time sooner than 24h before departure. And as you earlier yourself noted, there is not much sales in this period anyway...