I posted this inreply to a thread at usaviation.com's US board. Anyone here have a valid arguement that I am missing? No one there has as of yet.

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On 9/10/2002 8:05:36 PM CPRich wrote:

Explain to me the exact mechanics of how US loses money if I don't show up. If the flight is not sold out, there was no opportuntity to reuse the seat. And if I can call up to the minute before the flight leaves, then you didn't have the opportuntity to play revenue maximization games, reprice seats, gain a customer that was scared away due to lack of availability, etc.

If the flight it sold out, and people are on standby, I can't beleive a seat actually would go empty. That's what stand-by and the 30-minute check in is for, n'est-ce pas? I don't show up, they cancel my seat, give it to someone else, flight takes off full.


Please give me a realistic scenario where my no-show causes an opportuntity cost loss due to empty seats. And remember, you give me up until the minute before the flight leaves to escape with "frame it" status.


And what is the justification for needing to re-book a flight right away? Suppose I do call in advance and give you the courtesy of being able to give 1 more person a boarding pass at check in vs. waiting for stand-by to clear. Why do I need to give the specific date that I will be reusing it? When I rebook, there needs to be space available in my fare class, etc., so why not give me a day, a week, a month to rebook it? (other than the extra $100). I foresee lots of flights 330 days out being booked and then disappearing later. What havoc will that throw in the reservations process??
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Come on folks, can no one answer this? Hmmm??

There actually is an answer where it is theoretically possible (which I have a further reply to). Surely the professionals know more then we mere 200k mi/yr fliers.

In absence of a rebuttal, I can only assume that my hypothesis is correct - these policies do not correct any flaw that would cost the airline money, they merely allow the airlines to resell to someone else something I have already paid for, while keeping my money even though I didn't use it.

US doesn't lose money if you don't show up. But, if it lets you apply that value to a future flight, versus you losing the original ticket completely and purchasing a brand new ticket, it loses money.

That's probably their logic.

d

I doubt that the airline could demonstrate that it actually lost money simply because you, one individual, failed to show on a particular day at a particular time. Your challenge is clever because it is designed to produce precisely that answer.

But if the airline reduces no shows across its entire system, it reduces the complexities of its systems. It has the opportunity to match capacity more closely to sales. It can reduce its overbooking levels, which means that less time and money have to be spent on managing that. That also reduces the amount they spend/give away to people playing the bump game.

My impression (not being in any form of management) is that the airlines are looking to make efficiencies of perhaps a handful of percentage points in these areas. The companies are so big, though, that this could have a real effect on the bottom line.

The other effect is this. The airline pricing model is designed to tease out of people exactly what they are prepared to pay for their variant of the product, out of all the different variants that are in the market. If you object to the new "anti no show" rules, the airline is basically challenging you to decide - do you want the flexibility of being able to no show, and how much is it worth to you? Some people will accept the new rules because they don't need the flexibility, but the airline then loses nothing.

If you do need the flexibility, and you are prepared to pay the extra money (even under protest), you were obviously prepared to pay more for your ticket than you were previously paying. The airline has, through the new rule, got you to pay closer to that figure, rather than you having advantage of the same discount as people who don't need the flexibility.

I generally agree with these replies, I don't think it is about the airlines losing money when you don't show, it's about them increasing revenue. They are basically forcing you to pay more for flexibility. In my opinion this is entirely fair. In 1999-2001 when everything was rosy and many companies were not paying attention to travel costs this was not a problem for airlines. But when the economy tanked everybody started buying discount tickets and expecting the same level of service, flexibility, food and frequency of flights because they are an elite flier. Well, if everybody flies on $300 tickets fifty times a year everybody will be elite but the airlines are still going to hemorrhage money.


[This message has been edited by BigKing (edited 09-13-2002).]