Overbooked Flights Are Not the Real Problem

by Monica Poling
Last updated: 1:00 PM ET, Fri April 28, 2017

Following the violent removal of a passenger from a United Airlines flight earlier this month, it seems that everyone in America has an opinion on the airline industry policy of overselling flights.

Lawmakers are jumping into the conversation and asking the Department of Transportation to start a formal investigation with an eye on banning the practice of overbooking flights altogether.

For one US airline, the proposed new law does not pose a problem.

JetBlue already adheres to a strict "no overbooking" policy. If the airline has 250 seats on a plane, it sells 250 tickets. And according to USA Today, the airline's CEO Robin Hayes has confirmed that it will continue to stick by that policy.

Still, JetBlue could also be the perfect example of why a law prohibiting overbooking might actually provide very little consumer protection.

During the last three months of 2016, according to the Department of Transportation's Air Travel Consumer Report for March 2017, nearly 9,000 passengers were involuntarily bumped by the top 12 U.S. carriers. Interestingly, of that number, more than 10 percent were bumped by the carrier that does not allow overbooking, JetBlue.

That's because overbooking and bumping are not always synonymous.

When looking at hard numbers, JetBlue involuntarily bumped 1,036 passengers during that three-month period. These numbers show a dramatic increase over the same period in 2015 when the airline involuntarily bumped just 21 customers.

So, what's going on? According to an article at MotleyFool.com, JetBlue's involuntary bump rate climbed primarily due to last-minute aircraft changes to smaller planes. Generally, these types of swaps occur due to sudden maintenance or other unexpected issues with the scheduled aircraft.

What's important to keep in mind here is that passengers bumped due to aircraft swaps are not entitled to any compensation under current regulations by the Department of Transportation.

Nor would they be protected under any new regulations prohibiting overbooking.

While involuntarily bumping one thousand out of some 8.7 million passengers feels like a fairly insignificant number, JetBlue actually had among the worst percentage rates of involuntary bumps per flying passengers of all domestic carriers during that period.

When looking at hard numbers, only Southwest and American involuntarily bumped more travelers (3,072 and 1,714, respectively) than JetBlue. But since each carrier serves well over 30 million passengers compared to JetBlue's 8.7 million, their percentage rates for passengers involuntarily denied boarding clocked in considerably lower than JetBlue.

Incidentally, United involuntarily bumped just 891 passengers during the same period, for a rate lower than Southwest, American and JetBlue.

This is especially important to keep in mind, as the entire conversation about overbooking stemmed from an incident that didn't involve overbooking passengers at all. (It was United Airlines crew as the real problem.) Even if rules against overbooking had been already been in place, they would not have applied to the scenario that unfolded in Chicago during early April.

Preventing the airlines from hedging against the whims of passengers is not the answer here, but perhaps before we look for answers, we should spend more time defining the question.

The real problem is bad customer service and even poorer problem solving when issues arise. Lawmakers shouldn't try regulating such things; That's for the service providers to figure out.

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