In a season of crowded planes, long security lines and numerous delays, there are only two kinds of travelers: those who dislike the airlines, and those who loathe and abominate the entire industry with every fiber of their being. So the Department of Transportation is not risking a mass revolt when it entertains the idea of making carriers pay large sums to passengers who, after buying a ticket, find it doesn’t come with a seat.
Airlines overbook to assure full flights, but when everyone shows up, not everyone gets to go. Involuntary "bumping" of passengers is an old custom that has gotten more onerous, since it’s not as easy to get on the next flight as it used to be. So groups claiming to represent consumers have been demanding that the government force airlines to boost their compensation.
Currently, offenders have to pay a maximum of $200 if a customer is rebooked on a flight scheduled to arrive within two hours of the original one, or $400 for flights that arrive later. Organizations like the Consumer Federation of America propose that these figures be raised to restore the value they had before inflation eroded it — which would amount to $624 and $1,248.
You will not hear many travelers oppose getting more satisfaction when a ticket agent spoils their day. But it’s hard to see a problem serious enough to justify Washington’s intervention. And in this case, an attempt to help consumers at the expense of carriers promises to leave both worse off.
The industry has good reasons for this practice. A no-show passenger can mean an empty seat, and every empty seat costs the airlines cash they badly need. As a group, they have managed to operate in the red for six straight years. Overbooking can be the difference between a flight that makes money and a flight that loses money.
Contrary to what you might assume, this supposedly rampant abuse is about as common as a vacant exit row. Out of every 10,000 passengers, on average, only 1.45 are involuntarily bumped. You could expect to fly thousands of times before you would ever be left at the gate.
One reason for this is that the airlines don’t like turning away paying customers. So they strive to sell no more tickets than is absolutely necessary. Wallace Beall, senior director for revenue analysis at US Airways, told The New York Times, "Employees call in sick because they don’t want to deal with overbookings." A passenger who is barred from boarding by Airline A is a passenger who in the future will go to great lengths to accumulate frequent-flier miles on Airline B.
Another reason few travelers get bumped is that the carriers solicit volunteers with ample enticements, which offer travelers a better deal than the government does. If you agree to be put on a later flight, you can generally expect to get a free roundtrip ticket to anywhere in the continental United States.
Of course, some travelers really have to get where they’re going in a hurry. But those who put a high priority on not being turned away can easily protect themselves. If you buy your ticket early enough to get a seat assignment, you’re virtually immune from bumping. Likewise for passengers who check in online and get their boarding passes.
The typical bumpee is someone who decides to fly at the last minute or doesn’t check in until arriving at the airport. But that’s also the person who, if airlines are deterred from overbooking, won’t be able to buy a ticket at all. Instead of having a tiny chance of not getting aboard, this poor soul would have a 100 percent chance of not getting aboard. How would that make him better off?
It wouldn’t. Fliers also benefit from the lower fares that overbooking helps to pay for. Without it, you would pay for the cost of your seat — and part of the cost of the empty one next to you. By selling more seats than they actually have, carriers can maximize revenues and minimize costs. Those two achievements help to preserve the low fares we enjoy today, which in inflation-adjusted terms are roughly half what they were 30 years ago.
Involuntary bumping, with the current modest compensation, is a less-than-perfect method of reconciling the interests of travelers and airlines. But there’s no system so imperfect that a helping hand from Washington can’t make it worse.