The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Airlines have always been very proactive in their efforts to secure full flights and maximise revenues. As part of these strategies, many players opt for more unconventional procedures, which do not necessarily align with passengers’ rights. ‘Bumping’, or denying passengers the right to board a plane, has been an unofficial industry norm for many years and, yet, there is a huge difference between the practices of airlines in North America and their counterparts in Europe. Passengers are learning fast however and starting to embrace ‘voluntary’ bumping as part of their travel practices in order to cut costs.
Overbooking a flight is one way for an airline to secure against losses when passengers do not arrive for their trip, which, in most cases, does not entitle them to a full refund. With more confirmed flight bookings than the actual seat capacity of the flight, airlines are ready to buy out volunteers who are willing and able to take the next flight in exchange for compensation and/or a travel voucher. The practice is so common in North America that airlines even advertise it as an option via their marketing tools or booking platforms or via external websites such as www.optiontown.com. Some airlines also offer travellers the opportunity to choose from several different financial rewards when checking in – specifically how much a passenger will accept to give up his/her seat.
In North America, ‘bumping’ is well rooted in the practices of local airlines, which has earned them problems with the local authorities. According to the US Department of Transportation, during January-September 2013, there were 43,221 involuntary denied boardings of passengers and 355,125 voluntary ‘bumpings’ in the US.
All is not rosy for operating players however; Delta Air Lines Inc, for example, was fined US$750,000 by the US Transportation Department in 2013 for denying passengers access to board a plane without reimbursement, while back in 2009, the figure was just US$375,000.
Canada has also introduced tougher control measures, with the ultimate goal of protecting passengers’ rights. The Canadian Transportation Agency ruled in 2013 that travellers must be paid either US$200, US$400 or US$800 by Air Canada when their flight is delayed by less than two hours, between two and six hours, or over six hours, respectively.
The situation in Europe contrasts to that in North America when a flight delay and/or cancellation occur. In Europe, passengers are entitled to compensation under the European Parliament Regulation 261/2004 for any delayed and/or cancelled EU-regulated flights. As such, ‘bumping’ does not appear to have the same attraction in Europe as it has in other parts of the world. That said, Air Baltic and SAS are two airlines in Europe which already offer multiple booking choices through websites such as www.optiontown.com.
Those airlines which are losing passenger revenues and which do not have the financial muscle to counterbalance this impact are most likely to be tempted to embrace ‘bumping’ as part of their practices. Such strategies could also take off in Europe with the help of low-cost airlines, especially as they are increasingly courting business travellers and offering more perks (ie including business sections) for the flexibility-seeking corporate traveller.
It is interesting to see how, in Europe, where low-cost airlines are flourishing and travellers are very cost conscious, ‘voluntary flight bumping’ has not been explored more by customers when flights are oversold.
Opportunities can be identified amongst those who have the flexibility to change their initial travel plans, such as adventure travellers, students and over 65-year-olds, in exchange for compensation, a bit of fun and an unconventional experience.
On the other hand, there is a very fine line between what is acceptable and passengers’ rights being taken for granted by big airlines. Therefore, more transparency is needed to ensure consumer rights are protected, which would allow travellers to opt-in at the booking stage to show that they would be willing to be ‘bumped’.