The controversy surrounding the forcible removable of Dr. David Dao left an indelible blemish on United Airlines’ brand. It also started a conversation about how airlines should handle overbooked flights. Well it seems United has found a solution – though it may not be the solution customers had hoped for.
This week, United Airlines Inc. is quietly unveiling a new technology platform that it will use to manage the problem of oversold flights - and, in the same breath, turn them into a profit opportunity, according to Bloomberg.
With the help of its new Flex-Schedule Program, the airline is piloting a way to buck the trend of involuntary bumping - the term for kicking passengers off oversold flights - without necessarily offering four-figure payouts to passengers at the gate, or curbing their practice of overselling inventory.
Instead, it’ll simply offer buyouts earlier - up to five days in advance. The upside for United? The chance to resell your ticket at a wider profit margin.
In partnership with Volantio, a third-party aviation technology startup based in Atlanta, United will soon begin sending e-mail newsletters with subject lines such as “Are You Flexible with Your Travels to Los Angeles?” Inside, travelers will have the option to sign up for potential rewards - so long as they’re willing to budge a little on their flight itineraries.
But as Forbes points out, the policy change might be a smart move by the airline, but it’s not the best deal for consumers. 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 travelers.
While $250 might seem like a lot to some, it’s typically less than what the airline would offer passengers at the gate when they asked for volunteers.
“For many travelers, 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 more lucrative.”
Only those who book on United.com and opt in to receive marketing messages will be eligible for the sign-up offer - and signing up doesn’t guarantee that you’ll be asked to change your flight, according to Bloomberg.
After months of negative press, United has become desperate for some kind of gimmick to help restore its battered brand. And it seems like whoever sold this idea to United couched it as an opportunity to do just that.
“According to Azim Barodawala, the chief executive of Volantio who created the technology and brought it to United, the Flex-Schedule Program could be an opportunity to change the narrative with the help of innovative technology, rather than cumbersome regulations.
“If you can offer a buyout to a customer in advance, everyone will be happier,” he said. ‘For airlines, it represents a release valve—a way to shuffle people around when you’re capacity-constrained. This benefits the customer as well you’re creating choice for them, and that’s what gets me really excited. [Passengers] get the short stick a lot.’”
But will fliers in advance give up a seat for a $250 credit? To some, it seems unlikely. A Forbes reporter claimed he saw no takers for that amount at the gate before an American flight he took in late May.
An admitted frequent flier who also spoke with Forbes said he doubts it’ll be enough.
“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.”