Compensatory policy by United for ticketholders may not be successful

Published on : Friday, July 14, 2017

imagesA newly introduced policy of United Airlines rewarding passengers with confirmed tickets who give up their seats in advance of a flight may be a smart move by the company but may not be the best deal for consumers.

United will unveil a new technology platform this week that enables the carrier to better manage oversold flights. The move follows a massive black mark on United’s brand after a doctor who refused to give up his seat on an oversold flight, David Dao, was forcibly removed from a United jet prior to takeoff from Chicago in April.

Under the new policy, passengers on a flight with heavy demand who sign up for marketing emails will sometimes be asked—up to five days before their scheduled departure—to accept a $250 travel voucher in return for flying on a different flight to the same destination on the original departure date. United then would be able to resell the seat at a higher price to business travellers.

For many travellers, though, $250 is a lot less than they were given in the past when gate agents at airports asked for volunteers before takeoff to surrender their seats. Many gate agents have traditionally started by offering at least a $250 travel voucher and a seat on a subsequent flight, and, when they haven’t gotten any, or enough takers, quickly made the offer even more lucrative.

Frequent flier Michael Sommer says Delta Air Lines passengers were initially offered $400 in travel credit on an overbooked flight from Salt Lake City to Los Angeles last year. Sommer, a technology consultant in Park City, Utah, says he and a travel companion accepted a second offer of $800 each in flight credit for agreeing to take a later flight.
It worked out perfectly for him. The later flight arrived in Los Angeles in time for his original connecting flight to Hawaii.

Sommer, who has flown on at least 40 flights this year, says the most lucrative flight credit he has ever received was several years ago. He gave up his first-class seat on a Delta flight from Los Angeles to New York, and he received “$1,500 or $1,600” in flight credit.
Sommer doesn’t think United will have much luck with its new policy, which was developed in partnership with Volantio, an Atlanta-based company.
“The policy is great for United but not for passengers,” he says. “Giving a $250 credit is a steal for United, but will a person give up a seat for $250? I don’t think so. Where can you go for a $250 credit? I would only start considering giving up my seat at $500.”


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