Delta is introducing a program where upon check-in, you can bid to be bumped from certain flights.  The customer will name how much they want in order to be bumped.  The low bidder(s) get bumped for that compensation.  The passenger can opt to change their mind and if there are no bidders, the airline will have to involuntarily bump someone and compensate them accordingly.

I like this idea.  It is economically efficient by prioritizing bumps according to those who have the least to lose as opposed to the most to lose.  It also drives down the cost of bumps which inherently means the airline’s costs are driven down as well.  The current system for seeking volunteers bids upwards instead and passengers know that waiting before volunteering will drive up the offer of compensation.  In fact, frequent fliers know that they can game the system for high compensation that doesn’t necessarily go to whoever paid for the ticket:  their businesses.

If someone is on a leisure trip and they’re willing to be bumped in return for $200 in travel voucher plus a guaranteed booking on the next flight, that means those who really need to get to their destination have a far higher probability of doing so and at the least cost to the airline.  Remember, higher costs = higher air fares.

Yes, if you are in voluntarily bumpbed, you can get far higher compensation in the form of real cash, hotels and positive space on another flight.  However, the idea here is to bump those who have the least to lose, not the most.  It also means less probability of angry passengers as well. 

Other airlines could stand to adopt this system and, frankly, I think it should be deployed so that at a certain overbooking point, airlines solicit these people *before* they arrive at the airport.  And if this works as Delta believes it will, I suspect that will be the next step.

Filed under: Airline News, Frequent Flier by ajax