First VDB on CO
 

I am astonished to see that
(1) their VDB offer starts at $250 USD
(2) VDB offers are negotiated with passengers individually, and even when you explicitly ask, they don't match the offer they agreed with another passenger. I mean, there are a whole plane of passengers to load, and the agents are taking the time to fight for $50-$100 zoo dollars. Do they get a bonus for giving the passenger less voucher for VDB?

Is this yet another characteristics of Continental, beside the landing skills of their pilots?

I don't know about the landing skills you're talking about, but for VDB compensation, they definitely require their GAs to play auctioneer and try to pay out as little as possible. It's just one of the CO characteristics of focusing on minutiae.

In some cases, they've started lower than $250.

What's interesting is that CO's on-time performance is pretty bad (they were last or second to last for each of the last 3 months, excluding Express carriers). You would think they'd try to focus on boarding efficiency, but instead they're focused on saving a bit of funny money here or there.

They also have one of the lowest denied boarding rates in the US industry so the number of flights impacted by this is dramatically lowered as a result. On-time performance is skewed by having a hub in EWR more than anything else. It would be hard to argue that GAs negotiating with pax on VDB payouts has a material impact on on-time performance.

Which is countered by them consistently having one of the highest involuntarily denied boarding (IDB) rates in the industry.

It's possible that their inability to solicit enough volunteers results in them being forced not to oversell by as much. That in turn leaves real money on the table.

While you look at it from an impact perspective, I see it as a lost opportunity for the airline. I think playing the auction game turns people off the process, so fewer people participate.


Many airlines have hubs in congested airports. UA has ORD and SFO; DL and AA have JFK; DL has ATL; CO has EWR; DL (formerly US) has a focus at LGA; etc. While EWR makes an impact to CO's stats, the other airlines are also burdened as well by their congested hubs.

On my last CO VDB they most certainly took a delay because of the oversale. I talked to them beforehand, we agreed on an amount, but protection was the issue (maybe it was too difficult to do in SHARES, I don't know). I wanted a flight they didn't want to do. So I passed and got on the plane.

Once fully boarded, they come on the plane begging for vols. I ask this GA about my protection. They radio someone and they say it's okay. Off I come, and they push late.

I was quite specific about my language - they have one of the lowest denied boarding rates (VDB and IDB combined) in the industry. IDBs are so rare they barely impact the numbers - there was some recent data posted on this.

I got VDB in Omaha on 12/27. I could tell that the flight was badly oversold; e-Checkin offered $200 for a later flight. I declined. At the gate, they were offering $400, which I gladly took.

I was offered $75 for BTR-IAH. :eek:

Needless to say, I declined.

Yes, I posted it. And the numbers were statistically insignificant. Based on true statistical norms, not "CO has x0% more", which is based on an amazingly small sample.

Another thought - OP - nice cheap shot concerning the pilots and landing skills.

There you are playing your numbers games again.

The vast majority of people fly as ticketed. The number of VDBs and IDBs are both very small. That's what we're talking about. Just because the discussion brings up an aspect that doesn't make CO look good doesn't make the number trivial.

There's a higher chance of getting IDBed on CO than there is on other carriers, despite CO's lower DB numbers.

In fact, when presented with an oversold flight, you're more likely on CO to get an IDB than on the other carriers because of this.

When you look at all the DBs of the major carriers and see what percent are VDB vs. IDB, it looks like CO may have a problem getting enough VDBs.

Now that doesn't say why, but it could be the routes it flies, the clientele it has, or it could be that it not generous enough with compensation and/or makes the process cumbersome

If you're referring to that other thread, a statistician posted that they were indeed statistically significant.

We're not talking about large numbers, for sure, but they were statistically significant.

I'd ask the statistician the p-value, but I'll drop it. No need to resurrect that thread.

:D No, it is a numbers game. You can't just cry "you're playing a numbers game" that as a defence whenever you don't like that a point you are making is massively diminished by how rarely it occurs. I'm sure those IDBs are very unpleasant to every single person they happen to. And the number of times they occur is tiny, for all airlines - not just CO.

Yeah, that was me.

P-value for "PMCO IDBed PAX at a higher rate than PMCO in 2Q 2011" is about 2.8 x 1E-66. (Sorry -- I can't figure out how to get superscripts in FT's version of BB code. Anybody have a workaround for that?)

The P-value (for a given conclusion) is basically the probability of having gotten a false positive. More precisely, if I claim "X" with a P-value of p, then I'm asserting that I have data that (1) support my claim of "X", and (2) would occur with probability less than p if "X" was in fact false.

So, the simple interpretation is: if PMCO's overbooking/bumping process is actually less IDB-prone than PMUA's, then in fact we could have gotten the data posted by aacharya in that old thread by random chance. But the probability of getting those data -- or any equally extreme or more extreme data -- is less than 1 in 100,000,000,000,000,000,000,000,000,000,000,000,00 0,000,000,000,000,000,000,000,000,000, if in fact PMCO's overbooking/bumping process is less IDB-prone.

Which leads me to conclude that, indeed, PMCO is probably more IDB-prone. :) In other words, the data are statistically significant.

That absolutely does not mean that it's operationally significant. UA IBDed about 1 in 10,000 pax, while CO IDBed about 1.7 in 10,000 pax. For context, if ua1flyer was at risk of IDB (I'm sure he's not), over his whole career we'd expect him to have around 1 IDB at that rate. So it's not a big risk for any given pax.

It's also probably not a major issue for the airline's bottom line, but some of the related VDB issues mentioned above (profit from overselling at high fares vs. loss from liberal voucher policies) may be.

That's my point. It's a small number for all airlines. The relevance is how small.

Just because it's a small number doesn't mean it's insignificant or should not matter.

Remember the airlines are moving millions of people each month. Even a small percentage has an impact. That's why you look at rates.

When an airline consistently has one of the highest IDB rates in the industry, that is a very likely indicator that something could be improved. And improvement should be a goal for any business.

Good assessment. Thanks for the p-value calculations.