seadog83

Out of curiosity why are airline seats so unique and different in terms of many commodities?

Essentially when you buy a ticket in advance, you're buying a futures contract for travel. You're positing that committing to the price today, will be lower than if you just show up at the airport in a month or whatever. No different than buy committing to the price of $100 bushels of corn today, you're assuming it will be cheaper than a month down the road.

Now, if the price surges due to drought, but you really don't need that corn, you can sell your right to buy at a great price. Why shouldn't you be able to do this with airline tickets?

I booked a flight to the states 10 days ago, and noticed that the flight for my days has gone up 3x to $1200, while the next day is still the same $400 I paid. Since clearly there is a huge demand for that one day, I would have no problem going one day later if it would allow me to cash in. In all fact aside from the loosest of schedules, my dates were entirely dictated by the cheapest flights.

It seems that really the airline has all the benefits of every side here. Unlike options you can't let higher priced ones expire worthless and buy on the open market if the price drops. You similarly can't take advantage of rising prices if demand suddenly shoots up. I suppose via efficient market theory that by retaining all the rights and profits that that will translate to lower fares because if they don't make it by reselling the same seat twice someone bailed on, they will make it from higher fares, but still just seems unique to a handful of industries that operate this way.

rrgg

If you're buying a service, is that really a commodity? Also, with an option can't you take delivery early by exercising the option any time up to the expiration?

travelmad478

emma69

Would you really only want to be able to buy from ticket resellers rather than the airlines directly? I know I wouldn't, but if you allow the reselling of the tickets, then companies will buy them, create artificial demand, be able to command a premium price, and in the end the only people better off are the middle men.

The idea of having a 'my plans are flexible' box on booking would be interesting, you could select your parameters (e.g. same day needed but different time ok, or +/- 3 days etc.) and if the airline needs you to, they move you (with appropriate compensation - could take the form of an upgrade, or a future travel voucher maybe?)

Often1

Everybody wants to turn inflexible tickets into flexible tickets. What OP proposes would damage the flexible brand and fully flexible tickets are often vastly more expensive. Nobody in their right mind would pay the full boat if they could pay less and have the same features.

As to commodities futures, that is analogy which simply does not work. That isn't unique. FT is full of them. Most of them don't work either.

jrl767

concur; this is ripe for abuse
this, on the other hand, could be an intriguing approach that might -- to some extent -- reduce the often-frenetic search for VDB-takers half an hour before boarding is supposed to start

some airlines are already occasionally soliciting interest at check-in (both online and at airport kiosks), and I've even received a few emails ("Your flight is overbooked and we are seeking volunteers willing to make alternate arrangements") within the 24-hour window, but I suspect broader implementation would probably complicate things for Revenue Management at multiple levels

I think emma69 is suggesting a "limited flexibility" scenario where -- only if necessary -- the airline would offer options within the passenger's parameters ... these tix would necessarily have to be at a higher price point, but perhaps still well below "fully flexible"

Proudelitist

A few reasons. First of all, think of the horror that is concert seating. One they became a tradable commodity, large firms started buying up huge blocks of seats and then reselling them. Other organizations, such as radio stations that would give out prizes bought up the best seats right away. So if I wanted front row center, they were gone. Short of winning the contest, even if I had money in hand I would be unable to get those seats.

So if they allowed unregulated, gray market resale of seats, here is what would happen...people would go into the business of buying seats up. It would be the best ones first of course..exit rows, etc. At their large volumes, they would get top tier status quickly and before you know it, your ability to select those seats as part of your status would be useless. They would be gone the second the flight is open to book. You would end up having to buy from these brokers, and yeah you would be paying alot more.

Do the airlines care about one off's onboard between people? No. Do they care if I tell a swap requestor I want 100 to swap? No. But if you could buy and trade on the open market..then yeah, they would take notice.

Kevin AA

An even cheaper ticket that allows the airline to make you change your travel time or date based on their needs? Please don't give them any ideas. Basic Economy is bad enough.

EricH

If you want an option, the airline will sell you one. You want it for free. No way.

paperwastage

travel agencies do this already

sometimes airlines actually block out the seats on the plane (so that the tour group travels together). sometimes they don't

eurowings has a mystery flight option that's related to this (loose destination but fixed dates)

you pick dates and general theme (beach, party,...). eurowings probably picks/sells off their cheapest tickets to you

https://www.eurowings.com/skysales/B...?culture=en-GB


I don't think airlines overbook that much, to need to invest in this technology

they already have their existing technology (during checkin or boarding, solicit interest on VDBs)

swag

In the '00s, you did used to be able to fly cheaper if you were flexible enough to not care about a specific flight time.

It was called Priceline bidding. But that faded away and was fully discontinued a few years ago. What OP suggests is effectively an extension of this, where the airline can choose alternate dates as well as times, and doesn't have to assign you a flight at transaction time, but can assign you a flight later. If the consumer demand wasn't there for the original proposal, I doubt it's there for the much greater uncertainty that OP has.

seadog83

I'm not sure I follow how me essentially saying "I'm willing to fly on any of these 5 days, at your convenience, provided you give me some inventive" Is me demanding additional flexibility. That seems like less to me. I'm not talking about getting a refund, I'm talking about being able to trade them like you would a TV or some contractors you have on standby. Does any airline out there even offer that? Ie I buy a fully refundable ticket for $1000 to Nola for Mardi Gras when the cheapest available is $400 a year in advance. I hold it until Mar 2nd, and see that of the few tickets still available, they're $2500 each. How do I sell mine for $2000? At best any airline I think would offer is what I paid, forbidding direct transfer to someone else.

The reason this came up is that recently an acquaintance had their week long vacation cancelled last minute by the tour operator, and they were refunded the money. Needless to say this is mostly worthless because they didn't want the money - they wanted a vacation, and it is impossible to book something similar at such short notice for the same price. That got me thinking about the whole comparisons to options, because in effect it's like the airline "bought" the option back, except that they didn't have to do it at time-adjusted market rates (ie the cost for the same trip on that day), but rather at the price they sold it for. As everyone knows (generally) tickets are cheaper well in advance, so there is clearly a huge inverse time decay component to the pricing - but apparently it only goes one way.

But yes fair point about the re-sellers buying things up. Truthfully that's exactly what would happen, and possibly even the airlines themselves making their own exchange to further cash in. Didn't ticketmaster have a subsidiary that did that exact thing? "Sell" tickets they controlled to themselves, make it part of a "package" that included a hat or something, so they could essentially scalp them legally?

Anyways it was just a curious thought experiment.

travelmad478

pinniped

The original Priceline kind of tried to do this. Not the change part, but you'd give them dates and a price and they'd give you the least-desirable possible seats on that date, presumably based on the airlines' needs (at least proxied by what the airlines were showing as the cheapest prices to Priceline).

The problem was that when I tinkered around with it, the price was never low enough to make me willing to play, suggesting the airlines didn't really need to do this. It couldn't have been too popular with travelers either. But I'd compute the value of status and miles, the value of my time in terms of the worst-possible option, discount that from the lowest non-Priceline fare, and take a shot. It always was rejected. I think a lot of Priceline's original business model was just people who didn't do any research or people who placed no value on earning miles or status.

In the U.S., starting in the mid-1990s (I think), the airlines were able to lobby the government under the ruse of "security" that they needed name matching. The reality is that it's simple revenue protection for them and another step in the erosion of individual rights vs. those of the corporations who own and operate the American government. Prior to the 90s, there was not a huge brokerage market like there is for concert tickets: that was not the airline's reasoning for requiring name matching.

Often1

UA tried this for a bit during 2018. I am not sure if it is still using it. Basically offered a free change on inflexible tickets for flights that were not merely overbooked but solidly at risk of an oversale. Reportedly not much uptake. Possibly there aren't that many people who have real flexibility any longer and flights are routinely full so the alternative may be a ways off.