The Creeping Racket of United’s “Overbooking”

There once was a time when I could care less about what airline I took. I went to the first online booking site I could find, searched for the lowest price and packed my bags. I was not a frequent traveler by any means, at least not by airplane. I might squeeze in one trip a year when I had the money to do it. Frequently, my only yearly travel was to Bermuda, where I have close family.

And then I married my wife. She’s a travel nut. She’s been arranging international travel for herself and her family since she was around 12 years old. I’d really never met someone so versed in the intricacies of air travel as she was, or anyone who could sit down for a half an hour and find the best travel “deals.” Usually “deal” meant “cheap tickets” instead of “great experience.” In the beginning of our marriage, these flights were arranged using Continental Airlines.

You remember Continental, don’t you? Great service and meals even on short flights. Space for your carry-on, because no one was trying to avoid a checked-baggage fee. Those were the days.

For someone who had possibly traveled by airplane about five times his entire life at age forty, this sudden ramp-up in travel was jarring and anxiety-ridden. Most of my air travel had occurred prior to 9/11, so the additional security was confounding and honestly, frightening. This did nothing to engender me toward air travel. The jostle to get a seat, the crazed rush to get into the plane and shove overly-large baggage into an overly small space was bizarre and frustrating to me.

Well, just as we were getting married, United purchased Continental. Continental was struggling to stay competitive and the merger with United seemed to make sense, in a merger kind-of-way. For Continental’s customers, there was a heavy sigh of sadness as they realized that they would be forced to transfer their miles to possibly the worst airline they could imagine (maybe, just maybe, American Airlines was the definitive “worst”). They would now be nearly forced to continue to use an airline they’d actively avoided for years.

Why did people avoid United? As a premium airline (as compared to JetBlue or Southwest), United pioneered the “nickle-and-dime” approach to customer service. Once they caught wind that people accepted snacks-only flights on JetBlue, United followed suit. After the merger, United started charging for checked baggage. My wife maintained a United credit card account in large part to avoid this charge. United is now charging for the use of overhead bins. They have progressively made luggage an “extra” expense for travel, adding charges over and above their ticket prices for nearly anything you want to bring with you.

Come to think of it, I had never been asked to make a purchase on an airline prior to flying with United. The first time an air hostess approached me to buy food and snacks on a flight was supremely uncomfortable. But that was just the beginning.

I soon became prepared for the inevitable “overbooking” of our return flight home. I saw an article over the past fews days (possibly on Wired.com) where United only claimed less than a single percentage point of “overbooking.” I must be the unluckiest traveler in the world, because fully a third of our return flights home included a request to “volunteer” for a later flight. As a result, I pleaded with my wife to normally make arrangements to return home twenty four hours prior to the end of our time off to avoid arriving home the morning I needed to return to work.

Imagine, cutting your trip short to accommodate the business habits of your airline. That feels backward to me. Doesn’t it to you? And don’t misunderstand, I realize the business acumen behind overbooking. Any airline could lose loads of money averaging a few empty seats per flight. But due to no-shows? That line of reasoning makes no sense. The last time I checked, no-shows didn’t get refunds, so the airlines don’t lose money at all. This is assuming the no-show made no attempt at communication a week prior to travel. So, United still gets something from no-shows, whether its a fee for re-booking or the full price of the ticket. Or both.

And lets define “overbooking,” while we’re here. To be clear, the only definition of “overbooking” that I accept is for customer seats, period. Accommodating on-duty or off-duty employees does not count. An airline cannot call a fully booked flight “overbooked” because they want to transport off-duty employees on that full flight. Honestly, it should be illegal (from a consumer protection standpoint) for any airline to remove a paying customer to accommodate an employee that United wants to transport somewhere. This is simply a cost-saving/time-saving strategy, since United can certainly pay to transport their employees by other means without removing customers from flights. That’s a cost of business expense, not a required inconvenience to a paying customer.

United’s current policy creates an adversarial relationship between employees and customers. It’s evident on nearly every flight I take with them. Air hostesses berating customers for boarding too slowly, antagonistic announcements for overbooked flights and the like.

Most importantly, this policy puts a certain lie you’ve been told to the test. Overbooking is a business strategy used to reduce “losses” from no-shows. The problem is, by and large, United loses no money from no-shows – it’s an invalid argument. Have you ever not shown up for a flight and gotten a refund a week later? I didn’t think so. Not unless there were tragic circumstances involved. What is more likely is that you were given an additional charge for not showing up – a “re-booking fee.” So, to reiterate, no-shows – defined as ticketed customers who do not show up for their flights – actually make United more money. Now you know the real reason for overbooking.

United gets your original ticket price, plus a no-show fee and they get to fill the seat with another paying customer (or an off-duty employee, for whom they do not have to pay transportation costs). This is literally a racket, as in, the definition of “racketeering.” Yet United gets to present no-shows as a business loss to the public. A business loss that requires overbooking. Let me give you an example.

I am currently on a trip to visit Nashville. I chose to drive here and my wife made arrangements to fly here with my daughter a few months ago. The day my wife and daughter were to take their flight, she saw a weather report indicating heavy thunderstorms and tornado activity on her flight path, so she chose to drive with me, instead. A pretty typical no-show. Hers was just one valid reason out of many to not show up for a flight. And since there is no incentive to contact United, we did not contact them.

She was a no-show for a round-trip flight to/from Nashville. Not only will she never get her ticket price back, she will also not get a refund of the ticket for our five year-old. We can fairly assume that those seats were filled. So, United got a minimum of double the ticket price for my wife’s and daughter’s seats. Then they charged my wife a “re-booking fee” for her return flight, which they canceled but for which they gave my wife a credit. So, as a result of a “no-show,” United received the ticket price for two tickets that were never used and and additional fee for a ticket that was used. In addition, United probably filled the seats my wife and daughter didn’t use, with other paying customers or off-duty staff.

No-shows are not a loss. They’re a free-and-clear profit if the seats are filled. There is no justifiable need for “overbooking” based on no-shows. Even if the seats weren’t filled, they were paid for and most likely resulted in additional fee revenue.

Well, ok. There is one justification. More profits. More nickel-and-diming customers to make more profits. No wonder Continental couldn’t compete.

What you may also not understand is that United (and many other airlines) skirt federal law by convincing you to “volunteer” for a later flight if yours is overbooked. By federal law, if you lose your seat due to “overbooking” the airline is required to pay you up to four times your ticket price or roughly $1,400, which ever is the smaller amount. Airlines get around this by making it inconvenient for you to take your refund and book a separate flight (which is also likely to be overbooked). By inconveniencing you, they convince you to sign a waiver for a voucher that you may never use and which has provisos (blackout dates, voucher only good in the continental US, etc.). So, for the trouble of being removed from a pre-paid flight, United gets to offer you something of almost no value in return. By the way, if you do use the voucher, you’ll need to buy a return ticket from wherever you just went. Ooops. More profit.

At this point, it is no wonder that passengers no longer want to accommodate “volunteer” requests from airlines. The airlines, most certainly United, are making revenue at every interaction a passenger has with them. And they frequently yell at you or abuse you for that privilege. If you are not a frequent traveler, it may be fair for you to put this down to “first world problems,” and maybe that’s a fair criticism. But getting appropriate value and customer service is an expectation we should all have, no matter what that service is.

My advice? Just don’t fly United, or any other airline that does this. If these companies only listen to their pocketbooks, then speak the language they will hear. Before ever that poor man was forcibly ejected from a seat he paid for, in a blatant ploy for United to save a few bucks, this kind of abuse was one of the primary reasons I chose to take a twelve hour drive to Nashville, instead of a three hour flight.