Overbooking - what is it? History of origin and development

2024 Author: Harold Hamphrey | [email protected]. Last modified: 2023-12-17 10:06

We can not always afford to go on a vacation abroad, no matter how much we would like to. However, unforeseen circumstances may arise that will not allow it to take place. How to behave in a situation where the flight is canceled is still clear. But what to do if overbooking occurs? What is this word and what is its meaning, not everyone understands.

Definition

The word "overbooking" comes from the English overbooking and literally means "rebooking, resale". The system for selling services or goods, as well as a tool for effectively managing the income of an enterprise, is overbooking. What is this system? Its meaning lies in the fact that the seller or supplier takes more responsibility for the provision of goods or services than he can actually take on. The fact is that, according to statistics, not all obligations will be fulfilled, but only most of them. So, for example, airlines rely on the fact that some of the passengers who bought ticketswill refuse transportation.

The history of the overbooking system

Initially, airlines from the United States began to use the "overbooking" system.

The meaning of such a marketing policy was that passengers were allowed to refuse purchased tickets and receive the amount paid for them without pen alty even in situations where they were late for the flight or immediately before departure. However, this system was unprofitable for some airlines, since the planes flew empty due to abandoned passengers.

After such a sad experience, overbooking came to replace this system. The number of air tickets sold exceeded the number of seats in the cabin. This was done on the basis that not all passengers would show up for check-in.

Situations often arose when all passengers who bought tickets arrived at the check-in counters on time. Under such a combination of circumstances, representatives of the companies offered passengers to voluntarily refuse the flight. In return, they were offered a range of services absolutely free of charge - hotel accommodation until the next flight, service class upgrade, and a meal voucher. The cost of such services for the airlines was much less than the losses that it would have suffered if the same passenger refused the flight. There are usually enough "volunteers" available.

What is overbooking?

There are only four types of overbooking:

• Planned –Not all passengers go through the boarding control, so more tickets are sold than there are seats on the aircraft.
• Situational - occurs when an aircraft is replaced by a smaller one due to technical reasons.
• In one class of service - the number of tickets sold in one class exceeds the number of seats in it, although the occupancy of the aircraft remains.
• Gold - there are passengers, for example, frequent flyers or VIPs, to whom the airline cannot refuse transportation even to the detriment of other commercial passengers.

Airline actions in case of overbooking

You need to know, speaking of the "overbooking" marketing policy, that this is not only the resale of air tickets. It also includes certain activities carried out by the airline's employees.

If during the check-in process it turns out that such a situation has arisen, representatives of the company are included in the work, who begin activities to search for passengers who agree to fly on another flight. This search is carried out by polling passengers or by means of a general announcement in the registration hall. Volunteers are found quickly as the reward is quite a decent amount.

Also, a situation may arise when passengers are forced to upgrade from economy to business class. But such cases are rare.

Overbooking in Russia

The practice of reselling airline tickets has been around for a long time. It was based onstatistics that have been collected over many years on passengers who did not show up for a flight. The percentage of resale is determined individually for each airline. For example, for European carriers such as LuftHansa, EasyJet, it is approximately 5%. Russian carriers have much more. Aeroflot overbooking - about 10-15%.

The percentage of passengers who did not show up for boarding is an internal matter of the air carrier. But the regulation of marketing policy is the competence of the legislature.

In Europe and North America, there are laws that regulate the rights and obligations of both passengers and airlines. Overbooking of air tickets in Russia has not had a legal framework for a long time. It was not officially banned, but was used behind the scenes, which created certain risks. This threatened airlines with litigation, while passengers could only hope for a favorable combination of circumstances.

In June this year, the Ministry of Transport completed the development of a bill regulating overbooking of air tickets. The law, according to preliminary information, will come into force next year.

Overbooking during the crisis

It was during the most difficult crisis period for the country that air carriers, primarily Aeroflot, remembered that overbooking is not regulated by law in any way. What explains this increased interest?

Airlines, especially regional ones, are currently unsure abouttomorrow. The decline in passenger traffic is a consequence of the economic crisis.

Overbooking is one of the most efficient and cost-effective ways to increase aircraft occupancy and improve the carrier's financial position. If it is legalized, revenue will increase.

Arguments against overbooking

Opponents of the legalization of overbooking are organizations that protect the rights of passengers. They argue that such a policy of resale negatively affects the image of the airline and additionally overloads the staff.

Opponents of overbooking also claim that airlines inflate statistics on no-show passengers.

Most Russian domestic flights are operated not every day, and some even once a week. Therefore, passengers may spend several days waiting for the next flight, and if they have connections further down the route, they are likely to miss them.

Foreign experience

How does overbooking work abroad? What is this system in foreign airlines? When more passengers come to check-in than the stated seats on the plane for them, the airline staff is obliged to find those who are ready to fly on another flight. They are offered a number of bonuses in the form of a business class flight, ticket discounts, extra miles on a frequent flyer card, invitations to a luxury lounge, a hotel while waiting.

If there are no passengers who are ready to cancel the flight, the carrier terminates the contract with one of the passengers. But the full cost of the air ticket is returned to him and compensation is paid. According to statistics, such cases occur with one in 10,000 passengers.

How to avoid overbooking: quick tips

Overbooking can be either scheduled or unscheduled. How can you avoid an unpleasant situation?

1. Get to the airport on time - seats fill up towards the end of check-in.
2. Prefer online check-in (luggage can be checked in at the airport at special counters).
3. The direction should not be the most sought after.
4. Avoid early flights.

Few Russian air passengers are familiar with the concept of "airline overbooking". What it is? This is the name of the resale of tickets for a flight, that is, in fact, there are more people who want to fly than there are seats in the cabin of an aircraft. Such a marketing policy for the sale of air tickets was borrowed from Western carriers. Overbooking is legalized abroad, while in Russia this process does not yet have a legislative basis. If you are a victim of such a combination of circumstances, do not despair and remain calm. In this situation, you get additional benefits, since the air carrier will provide the most comfortable waiting conditions and provide good compensation in the form of a flight in the first class of service.