They've got to be kidding, right?

Old Oct 19, 18, 3:44 pm
  #1  
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They've got to be kidding, right?

Waiting to board a flight at D6 this afternoon I heard an announcement asking for volunteers to be bumped off the overbooked AMS-SOU flight.

The deal was a seat on a Flybe flight some four hours later... and (wait for this ) 150 Euro in vouchers of 75 Euro in cash.

75 Euro for a four-hour delay - when passengers are entitled to 250 Euro under EU261???

I hope nobody took them up on their offer...

What cheek!
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Old Oct 20, 18, 2:59 am
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They can (and will) always try...
If nobody bites, the amount will go up.
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Old Oct 20, 18, 9:01 am
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There is nothing in EU261 that says that the offer to volunteers has to be the same as the statutory compensation for actually being subject to IDB.

Article 4.1
When an operating air carrier reasonably expects to deny boarding on a flight, it shall first call for volunteers to surrender their reservations in exchange for benefits under conditions to be agreed between the passenger concerned and the operating air carrier. Volunteers shall be assisted in accordance with Article 8, such assistance being additional to the benefits mentioned in this paragraph


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Old Oct 20, 18, 10:32 am
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What cheek? None.

Voluntary offloading is a reverse auction. Some people value EUR 150 and might well be quite happy with that. If they do, why not turn a lose-lose issue (for a passenger who does not want to be offloaded as well as for KL) into a win-win?

Presumably someone old enough and with the means to purchase an air ticket and fly between two cities is capable of valuing his own time without having others judge him.

If nobody takes the offer, KL simply increases the offer until it reaches the prescribed involuntary amount and then picks who gets the boot.
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Old Oct 20, 18, 1:43 pm
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Haha. There is incredible busines literature about information asymmetries on value propositions. It won Ackerloff, Spence and Stiglitz the 2001 Noble prize in economics. Here we have airliners know things well and hammer this on their staff against non-professionals like you and me. If I were an airliner, of course I would try this since likely 1 or 2 out of the 100s customers will bite since they are not Noble prizes ;-). Even if 20-40 of these do not suffer from information asymmetry, cha nces are 1-2 of the rest will feel fine....
See https://en.wikipedia.org/wiki/Information_asymmetry
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Old Oct 20, 18, 1:52 pm
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And, as pointed out by Often1, there is the voluntary/unvoluntary issue. Sure, it may be that someone can exercise the right to get the level of the EU claim. But that only happens if someone is involuntary bumped off the flight! By offering a lower reward some time before that happens, the airline looks voor voluntees who are happy to take a detour or have a later flight. So it is what you are satisfied with - a sure(but not maximal) recompensation when you take voluntary the offer of the airline some time before take off, or the maximum EU recompensation when you are involuntary bumped off...Those betting on an involutary bump-off with the highest compensation, should not complain if they after all can take their original flight when others are happy with less money and turn over their seats an hour or 2 before departure......You can read another Noble prize on this, Daniel Kahneman: https://en.wikipedia.org/wiki/Daniel_Kahneman
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Old Oct 20, 18, 3:23 pm
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This has nothing to do with information assymetry and everything to do with the fact that the carrier only needs a specified number of passengers to offload and does not care which ones. Individual passengers have individualized situations and needs.

It may be the the lowest-fared ticket held by a non-status passenger happens to be for an important meeting. On the other hand, the highest status passenger holding the most expensive ticket might not care about the four hours. If left to KL to choose, the former passenger likely is denied boarding before the latter passenger. That costs KL EUR 250 in cash (equivalent) and creates a very unhappy passenger who perhaps does not care about the money, but cares about being on the flight.

The volunteer system comes at no cost to EC 261/2004. If nobody takes the offer(s), the Regulation comes into force and whoever gets the boot, gets the cash it requires.
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Old Oct 21, 18, 12:47 am
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My - limited - experience of witnessing EU airlines calling for volunteers shows that all people accepting the offer have no clue about EU261.

This is definitely information asymmetry. Although not surprising at all, very sad from a passenger perspective in 2018. It shows KL does not get (or does not want to enforce) the basics of customer service which is to be fair with the customer in question.
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Old Oct 21, 18, 5:35 am
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It is debatable whether failing to inform passengers of their rights under Reg 261/2004 is a breach of Article 15 of the Regulation and results in the passenger being able to claim the difference between what they have been offered and what they would be due in case of involuntary denial of boarding.
Originally Posted by Regulation 261/2004, Art 15
[...]if the passenger is not correctly informed of his rights and for that reason has accepted compensation which is inferior to that provided for in this Regulation, the passenger shall still be entitled to take the necessary proceedings before the competent courts or bodies in order to obtain additional compensation
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Old Oct 21, 18, 8:14 am
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The only time I volunteered, I was told that KLM policy is to offer not more than 70 Euro. I see that at least some things in that company don't change...
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Old Oct 23, 18, 6:16 am
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Originally Posted by NickB View Post
It is debatable whether failing to inform passengers of their rights under Reg 261/2004 is a breach of Article 15 of the Regulation and results in the passenger being able to claim the difference between what they have been offered and what they would be due in case of involuntary denial of boarding.
I would argue that it's not, because there are no rights applicable in the situation. Otherwise you would have to give a lecture to each passenger, in person, for all their possible rights in all possible situations. This is obviously not the right way to do it neither the spirit of the law.

As for the informational asymmetry, there might be some, no doubt, but I fail to see how someone not knowing about IDB rights applies here.
For one, it doesn't change anything. The passenger would know there is potentially a higher level of compensation in play... unless someone accepts the offer as stated. The same is true if they don't know about the ceiling. From auction perspective, there is no difference between someone accepting 250 offer and someone being offloaded for 250, either case, passenger valued their remaining on the flight at over 250 and didn't take the offer.

Besides, it's always in passengers interest to start the auction rather than go straight to IDB. If I want to fly, it lowers the risk of my being selected for IDB. If I don't care, it gives me the option of recouping some of the cost.
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Old Oct 23, 18, 10:45 am
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Originally Posted by Fabo.sk View Post
I would argue that it's not, because there are no rights applicable in the situation. Otherwise you would have to give a lecture to each passenger, in person, for all their possible rights in all possible situations.
I don't see why this should be so. let us not forget the " and for that reason has accepted compensation which is inferior to that provided for in this Regulation" bit of Article 15. There is clearly no need for the airline to talk about rights which have strictly no relevance to the issue at hand. There is no need, for instance, to talk about rights in case of cancellation or delay when the issue at hand is one of denial of boarding. Knowledge of whatever rights the regulation might give in case of cancellation will not affect what the passenger is going to accept in case of denial of boarding. On the other hand, knowing what the airline is liable to pay in case of involuntary denial of boarding may well affect what the passenger is ready to accept as compensation for a voluntary off-loading. While not the only possible one, this is a sensible and possible reading of Article 15, which would be fully in line with the spirit of the Regulation and, arguably, more so than the reading you put forward..After all, the idea behind Article 15 is that the airline should not be able to benefit from its own reticence in failing to inform the consumer. Requiring the airline to indicate what compensation is due in case of denial of boarding in the context of negotiations for voluntary offloading is fully in line with the spirit of the Article.

Last edited by NickB; Oct 23, 18 at 10:50 am Reason: typos
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Old Oct 23, 18, 12:29 pm
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Originally Posted by Aviatrix View Post
Waiting to board a flight at D6 this afternoon I heard an announcement asking for volunteers to be bumped off the overbooked AMS-SOU flight.

The deal was a seat on a Flybe flight some four hours later... and (wait for this ) 150 Euro in vouchers of 75 Euro in cash.

75 Euro for a four-hour delay - when passengers are entitled to 250 Euro under EU261???

I hope nobody took them up on their offer...

What cheek!
I took the 150 euro voucher once. I was coming off a longhaul flight to CDG, had a short connection and was more than happy to spend an extra hour in the lounge and have a shower etc. Win-win.
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Old Oct 23, 18, 12:40 pm
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Originally Posted by atflyer View Post
Haha. There is incredible busines literature about information asymmetries on value propositions. It won Ackerloff, Spence and Stiglitz the 2001 Noble prize in economics. Here we have airliners know things well and hammer this on their staff against non-professionals like you and me. If I were an airliner, of course I would try this since likely 1 or 2 out of the 100s customers will bite since they are not Noble prizes ;-). Even if 20-40 of these do not suffer from information asymmetry, cha nces are 1-2 of the rest will feel fine....
See https://en.wikipedia.org/wiki/Information_asymmetry
OT but it's Akerlof, spelled with only one F.
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Old Oct 23, 18, 1:52 pm
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Originally Posted by Regulation 261/2004, Art 15[...]if the passenger is not correctly informed of his rights and for that reason has accepted compensation which is inferior to that provided for in this Regulation, the passenger shall still be entitled to take the necessary proceedings before the competent courts or bodies in order to obtain additional compensation
I would interpret this as if the whole clause refers specifically to IDB, not VDB. If the passenger were forced to take a different flight and offered insufficient compensation, they would be within their rights to take KLM to court over the difference. Also, the quoted clause specifically talks about compensation provided for in this regulation. Compensation isn't explicitly specified except for in cases of IDB.
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