“What cost”?
Let me explain this to you. If you have a 100 seats, and you sell 110 at $200, then you have $22,000.
If from now on you have to sell 100 because of this type of behavior, even if not overbooking, in case you have to accommodate your employees, etc (exactly this situation), then you get $20,000.
The $2000 loss gets eaten by future customers in more expensive airline tickets. What other explanations would you like?
If from now on you have to sell 100 because of this type of behavior, even if not overbooking, in case you have to accommodate your employees, etc (exactly this situation), then you get $20,000.
The $2000 loss gets eaten by future customers in more expensive airline tickets. What other explanations would you like?
I agree that without overbooking UA may have less revenue. But the extra $2000 in your example is an unearned windfall (or putting it less politely a fraud).
The loss of an unearned windfall is not a loss. If the risk of real losses caused by unavoidable crew shifting is a problem, airlines can buy insurance for it like everyone else.
How much risk is UA trying to mitigate? How about spreading it across 90+ million passengers. How much is this per passenger? If this causes their ticket prices to become noncompetitive then UA will be motivated improve their logistics for the benefit of us all.
Explain that.
“Let me explain this to you. If you have a 100 seats, and you sell 110 at $200, then you have $22,000.
If from now on you have to sell 100 because of this type of behavior, even if not overbooking, in case you have to accommodate your employees, etc (exactly this situation), then you get $20,000.
The $2000 loss gets eaten by future customers in more expensive airline tickets.”
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The $2000 is either refunded to the customers or applied to a ticket on a later flight.
How do the future customers eat that?