United Airlines has started testing a new marketing technique that would compensate passengers who give up their reserved seats in advance, so that the seats could be resold to last-minute travelers willing to pay a lot more for them.
The airline is working with a tech startup called Volantio on the project, which is called the Flex Schedule Program.
Here’s how it works: Those who book their trips through the airline’s website and who agree to take part could receive a message from United as much as five days before departure, asking them if they would be willing to switch to a different flight to the same destination on the same day in exchange for a $250 travel voucher.
If they agree, that would free up a seat that United could then resell to a last-minute business traveler for a much higher fare than the original passenger was paying. The technology would allow United to determine in advance which sold-out flights are most likely to see significant last-minute demand, and thus where Flex Scheduling would produce the best results in terms of revenue enhancement.
This is similar to the common practice of avoiding bumping by soliciting volunteers on an overbooked flight to take a later departure in exchange for a travel voucher. The value of the voucher can increase until enough people agree to be bumped. The difference is that Flex Schedule would not be used strictly as an overbooking solution, but could be applied for any flight where United thinks it could raise more revenues by reselling seats on fully booked departures.
United’s thinking is that passengers who agree a few days in advance to change their flight wouldn’t have to go through the anxiety of a last-second overbooking auction at the airport, and would still get to their destination about when they planned- all from the comfort of their home or office. And the last-minute bookers would be able to snag a seat on the flight they wanted – if they’re willing to pay a last-minute fare.
The concept would obviously work only on routes with significant business travel demand and with enough flight frequencies to accommodate the passengers who agree to be rebooked.
In an earnings conference call earlier this year, United President Scott Kirby said that the airline was selling out its flights too far in advance with too many discounted fares, and needed a way to make more seats available for higher-paying business travelers who book close to departure. This looks like the kind of solution he might have had in mind.
Sounds like a smart idea to us. What do you think, readers? Do you see any drawbacks for travelers in this concept?
In the market for a new credit card? See our “Credit Card Deals” tab to shop around! It helps us help you.