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On Overbooking

170428-b-overbooking

The recent passenger-removal-due-to-overbooking incident from a flight operated by a major airline shed light on a common (50,000 annual cases in the US alone) but relatively unknown, dubious commercial practice, and also revealed or confirmed some interesting facts:

- the power of direct-democratic, citizens journalism, in the form of mass social media.

- the power of smartphones and online video

- the power of consumers opinion

- the power of a free press

- the importance of crisis management and a solid CSR policy.

- the policy of preempting legislation change by temporarily going overboard with voluntary compensation and vague promises to put things right.

For the time being, we have the surreal result that passengers may now quarrel over who should be chosen to forego their seat. Will there be a reverse auction? Counting down from the USD 10k offered until one willing passenger remains? And if it is legal for airlines to overbook, why not also for trains, tour operators and hotels, big and small? It would be somewhat easier as it will be the word of the provider against the guest, fewer witnesses, less easy to film, no law enforcement accidentally taking out your two front teeth (there is TripAdvisor of course, but everyone complains there, no?).

Consider also that there are other, somewhat related types of situations where a consumer is forcibly removed, for example in home requisitions, also a form of overbooking / overlending by banks. Should or could there be an equal social media outrage next time a family is forcibly removed from their only house? In that case, the consumer (borrower) can be blamed for not meeting their part of the deal, but this is also true in the case of the airline passenger, the small print is in favour of the airline – as we said it is still a legal practice.

So this is what needs to change: Airline overbookings, at least systematic, deliberate ones, must become illegal, which, in practice means fined heavily, so that there is a permanent financial disincentive for such unethical business practices.

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