| BERLIN, April 13
BERLIN, April 13 International airlines have
defended the overbooking of flights after the practice was
thrown into the spotlight by videos of a United Airlines
passenger being dragged off a plane in Chicago this week.
The incident on flight 3411, in which law enforcement
officials were called in to remove the passenger to help make
way for crew members, has proved embarassing for United and its
CEO Oscar Munoz but also raises questions about policies across
Overbooking, where airlines sell tickets for more seats than
available to account for the likelihood of no-shows, is a common
practice and some U.S. lawmakers have called in the wake of the
United incident for new rules to make it more difficult.
Yet carriers say it allows them to keep costs, and thus
ticket prices, down.
"If airlines were no longer allowed to overbook, fares would
likely rise as airlines would have to pass on the costs of more
empty seats to consumers," the International Air Transport
Association (IATA) said in a paper published on Thursday.
"Banning the practice of overbooking will reduce already
thin margins, and could reduce connectivity in turn," IATA said.
Behind overbooking is a degree of calculation.
Airlines use historical flight data to calculate the
expected no-show rate for each route. For example, business
travellers may switch flights at the last minute, but those
travelling on summer holidays are less likely to change plans.
If more people than expected show up, airlines ask for
volunteers to miss the flight in exchange for compensation. If
not enough volunteer, airlines will select passengers to bump on
to an alternative flight, typically before boarding.
In the United States in 2016, around 475,000 passengers, or
0.07 percent of travellers, were denied boarding due to
overbooked flights. Of that, 40,000 were classed as involuntary.
The U.S. Transportation Department said it was the lowest
rate of involuntary denials since it began tracking the issue in
Delta Air Lines CEO Ed Bastian defended the practice
on Wednesday, saying its denied boarding rate was only about 1
in 100,000 passengers in 2016.
To its industry proponents, overbooking has paid off.
In 2005, planes were on average 75 percent full. That has
increased to around 80 percent in the last couple of years. IATA
said this month that ticket prices have fallen about 10 percent
in real terms over the past year.
Not everyone follows the policy. JetBlue and
Ryanair make a point of saying they do not overbook
flights, though the former's denied boarding rate has risen
recently after it switched to smaller planes, meaning fewer
seats were available than planned.
For the industry as a whole there remains a risk of
alienating consumers. Liberum analyst Gerald Khoo said airlines
get it right most of the time, but noted: "Ultimately, this
episode is a failure of United's procedures, but it has shone an
unwelcome light, for the airlines, on one of the industry's
(Additional reporting by David Shepardson and Ankit Ajmera;
Editing by David Holmes)