Are airlines betting that the last marginal buyer pays so much more than the average cost to convince someone to volunteer to delay their flight?
In: 2
**Example math. Not actual numbers.**
Statistically, not everyone makes their flights or and some cancel at the last second.
Airlines know this from thousands of data points.
Say 3 people on average for a given route do not show up, but occasionally everyone does. Say 1 out of 20 flights everyone shows up.
So airlines sell 2-3 more tickets than there are seats on every flight and just bank on a few people not making the flight.
There’s 38-40 more paying customers than if they just let those seats go empty.
On the 20th flight, everyone shows up. The airline offers 2-3x the cost of a ticket for someone to give up their seat.
Sure, it cost them a few tickets worth of money, but as long as it’s not more than the average amount of money gained from making sure every seat has a paying customer in it, then it’s worth.
Latest Answers