Homepage / Currency / United Airlines is testing a novel way of bumping passengers
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Currency

United Airlines is testing a novel way of bumping passengers

IT IS a classic traveller’s dilemma: you are waiting in the boarding area for your flight, and an airline employee asks over the loudspeaker if anyone is willing to be bumped in exchange for a voucher. You like the idea of sacrificing the unimportant meeting you were scheduled to attend in return for a few hundred dollars of travel credit. Then again you do not fancy explaining this to your colleagues, or sitting about in an airport for three hours waiting for the next flight.

Now imagine that instead of having to make this decision just before you board, you could do it do it several days in advance, in the comfort of your home. Changes the equation a bit, does it not?

  • United Airlines is testing a novel way to bump passengers

  • Why 65-year-olds aren’t old

  • Two documentaries probe Myanmar’s religious strife

  • A key White House post remains unfilled: First Pet

  • Why China’s dog-meat market has expanded

  • The administration asks the justices for clarity on their travel-ban ruling

United Airlines is contemplating a new scheme along these lines, called the Flex-Schedule Program. If a flight is overbooked, or looking like it might be, United will contact passengers who have signed up to the scheme up to five days ahead of departure. They will be given the option of switching to a less popular flight on the same day between the same airports, in exchange for a travel voucher worth as much as $250.

The idea is good news for flyers with flexible travel schedules who prefer to avoid the stress of a last-minute flight change. But it was born of decidedly unhappy events for United and its flyers, most infamously the incident in April in which a passenger who refused to give up his seat to accommodate off-duty airline staff was dragged from the plane and bloodied. That PR disaster, which was compounded when United’s boss initially blamed the customer for his intransigence, forced it into damage-control mode. The carrier quickly made 10 policy changes, including ending the practice of bumping passengers without their consent once they have boarded the plane, and increasing the compensation available to bumped flyers to $10,000. (Congress is now working to ban involuntary bumping altogether.)

Evidently the airline has no desire to hand over $10,000 to customers, even though it likely that flyers will bite long before that figure is reached. But the new scheme is more than just a cure for involuntary bumping. It is also a way for United to boost its profits. Bloomberg spoke with Azim Barodawala, the chief executive of Volantio, which crafted the technology behind the Flex-Schedule Program. It pitched the scheme to United as a way to free up high-demand seats that could then be sold to people willing to pay more for them. According to Bloomberg, in a meeting between Mr Barodawala and United executives it was posited that the programme could increase profits by over a $100m a year.

For once, what is good for an airline’s revenue does not seem to be bad for its passengers. United will remove a constraint on the seat-pricing process—namely, that once a person has bought a ticket, the price cannot be changed—and open it up to something closer to the free market. For a leisure traveller who bought a ticket two months in advance, switching to a flight a few hours later might make no difference, other than the $250 voucher he can pocket. But for a business traveller buying a last-minute ticket in order to make an important meeting, getting on that specific flight can be a necessity, well worth paying hundreds of dollars extra for. The airline will not complain if, by playing middleman, it nets the difference between the additional amount the business flyer is willing to pay and the voucher the holidaymaker receives.

If all goes as planned, United will not be the only airline to test the idea. According to Bloomberg, Australia’s Tiger Airways will unveil its own programme with Volantio next month, with Alaska Air joining in September and Qantas by October. And Mr Barodawala envisions a similar system for hotels—paying someone to move from one branch of a chain to another nearby, if the former is in high demand for a conference or other event.

Generally, the trend toward more stratification in travel has been bad for travellers. (See economy, basic.) But for once—and even if it took a disastrous few months for United to adopt the idea—this move to separate flexible budget-conscious travellers from those with more resources seems like a winner.

Source: economist
United Airlines is testing a novel way of bumping passengers

Comments are closed.