kl911
Posts: 3979
Joined: Mon Jul 21, 2003 1:10 am

EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 6:22 am

Found this in the Financial Times, seems that a lot of us will get some money back. It's bad for Ryanair and the other LCC. Imagine you pay 50 Euro incl tax and they have to pay you minimum 250 Euro!

_________________________________________________________________

EU airlines ordered to pay for overbooking.

Air travellers bumped off flights because of overbooking by European Union airlines will receive automatic compensation of between €250 and €600 under EU plans approved on Wednesday.

They will apply equally to low cost carriers, traditional airlines and charter carriers, including package holiday flights.

Flights of less than 1,500km will qualify for €250, with compensation rising to €600 for long-haul trips of more than 3,500km.

The rules will apply to all passengers flying from EU airports or into the EU on EU carriers.

FULL STORY: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480621630&p=1012571727092
 
prebennorholm
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Joined: Tue Mar 21, 2000 6:25 am

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 7:00 am

Good rule!!

It will prevent that especially LCCs will use extreme passenger inconvenience as a competition parameter.

And it will also prevent those charter airlines from getting 2-3 days behind schedules when an old plane goes tech and wet-leasing a backup plane is considered "needless out of pocket money".

For the mainstream airlines it will mostly be business as usual.

I heard in the press that the rules will be effective from 1st July next year.
Always keep your number of landings equal to your number of take-offs
 
leviticus
Posts: 1016
Joined: Sat Oct 27, 2007 7:34 am

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 7:04 am

Actually many airlines already do that, i got 300 Euros on a SAS flight a couple of weeks ago  Smile
 
donder10
Posts: 6944
Joined: Sun Oct 21, 2001 5:29 am

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:05 am

Passengers will also be reimbursed when they face a delay through cancellation of at least five hours. They will receive hotel accommodation when cancellation forces them to stay overnight, and meals and refreshments for shorter delays..

The rules will apply to all passengers flying from EU airports or into the EU on EU carriers.

Loyola de Palacio, the EU transport commissioner, said: "Too many times, air passengers are victims of practices which deserve that they receive a fair treatment and proper compensation: today's agreement paves the way for completing and strengthening the existing rights."

Is probably of more significance as LCCs don't overbook generally and 'traditional' airlines tend to give compensation for it already.
 
Airbus Lover
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RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:36 am

Yes indeed our B736 flight to FRA from CPH was fully booked and those willing to go on later flights were given EUR300. Too bad I didn't have time to spare or I'd have an extra EUR300 to spend in Germany Big grin
 
RickB
Posts: 807
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RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:40 am

I got offered money by SAS many times to take later flights because of overbooking. Usually $200 or $300 in cash.

One of the few times I took them up on the offer was a good day - I was booked on a flight from Oslo to Manchester via CPH - I got offered money to take a later flight via LHR which I accepted, I got offered money again whilst boarding the LHR flight to wait for a later flight which I accepted and I eventually got a seat on the direct flight to MAN - which meant I ended up arriving in Manchester about 30 minutes later than my originally booked flight !! $400 for a 30 minute delay !!

RickB
 
artsyman
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Joined: Wed Feb 28, 2001 12:35 pm

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:47 am

Overbooking is actually caused indirectly by the passengers. Airlines over book flights in order to compensate for the passengers that do NOT show up for the flight that they booked for. Once that flight departs with the empty seat, that revenue is forever lost for the airline, yet all the costs associated with the seat are still nailed to the airline. Maybe the airlines should be able to fine the passenger that doesn't show up.

Overbooking as a general rule works out fine 99.9% of the time. Seldom are people that needed to be on the flight bumped, usually there are people fighting over each other trying to get the free hotel, flight the next day along with their $300-1000 flight coupons... , and the guy who really needs to get where he is going more or less always gets his seat as planned

Jeremy
 
bobrayner
Posts: 2038
Joined: Sun Apr 27, 2003 8:03 am

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:58 am

Maybe the airlines should be able to fine the passenger that doesn't show up.

The passenger who paid for their ticket but didn't use it?
I doubt that the cost of flying with an empty seat is greater than that of flying with an occupied seat.

Possibly the airline will give a refund, depending on when the passenger cancelled (and why), the class of the ticket &c - but it's the airline that decides to offer this refund.

For a no-show, I'm sure they'd try to keep 100% of the ticket revenue. That's all the fine they could ever hope for.

[Edited 2003-10-16 02:01:10]
Cunning linguist
 
manni
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Joined: Thu Nov 08, 2001 1:48 am

RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 6:59 pm

Passenger that fet offered a refund for not showing up are those with expensive tickets and have paid for the privilege to not show up. No blame to the passengers here. Passengers that do not show up, with a cheap ticket, will not get a refund, so that revenue is definitely not lost and finnaly some passengers travel with tickets that allow them to not show up or cancel just before the flight leaves in exchange for a small penalty, ussualy around 150€.
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JGPH1A
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RE: EU Airlines Ordered To Pay For Overbooking

Thu Oct 16, 2003 8:20 pm

Predicting no-shows has become pretty refined over the years, but its not an exact science - it is usually based on historical data and experience in a given market - for instance on flights from India, the noshow rate for some classes is historically 50-60%, and airlines take this into considerations when determining availablity for a given class/date/route. But they get it wrong sometimes, and already most normal airlines offer compensation for denied-boarding. Now the EU has standardised the process, fair enough - lets hope it will give the likes of FR some incentive to improve customer service. Trouble is of course that it doesn't apply to delays/cancellations due to strikes or technical problems - so guess what, every delay and cancellation will suddenly be due to the weather or the plane going tech, even if the airline decide to cancel the flight because only 20 passengers are booked - the lying weasels !

Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
leviticus
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RE: EU Airlines Ordered To Pay For Overbooking

Fri Oct 17, 2003 12:32 am

Can anyone explain why a passenger who paid for the ticked and did not show up would have to fine for it ? I agree with "Bobrayner", I don't think it costs more to fly a plane with an empty seat than with someone sitting there !
 
767Lover
Posts: 3254
Joined: Fri Sep 26, 2003 6:32 am

RE: EU Airlines Ordered To Pay For Overbooking

Fri Oct 17, 2003 12:34 am

I'm curious too. I thought the whole reason for "no refunds" was to offset no-shows.

It's like the airlines are having it both ways.
 
searpqx
Posts: 4173
Joined: Thu Jun 29, 2000 10:36 am

RE: EU Airlines Ordered To Pay For Overbooking

Fri Oct 17, 2003 1:41 am

The issue of no-shows and overbooking actually originated in the days when most tickets could be purchased at any time (i.e., no advance or instant purchase rules), and the airlines had no way of knowing if a reservation actually had a ticket issued against it. So 40 people would call and book a seat on ABC airline from point A to point B, 15 of those would go to their agency or ATO and pay for their ticket in advance, 10 would pay for it at the airport on the day of departure, and the remaining 15 just wouldn't ever pay or show up or bother to cancel their res. As mentioned above, in some markets (heavy leisure and heavy business routes particularly), the numbers that no-showed could be significant. So, to compensate for those that booked and never purchased/never flew, overbooking became the norm.

As the sophistication of reservation systems increased, along with the prevelance of advance purchase requirements, the ability to cancel reservations that had been booked but never ticketed greatly diminished the amount of actual (or potential) revenue lost. However, sophisticated yeild managment systems at many airlines now allowed carriers to attempt to try and maximize revenue. Basically the airlines started gambling on the number of folks who would buy a ticket, and still not show up, so they could sell the seat again - basically double dipping on the same seat. The airlines still claimed that it was to protect themselves from no-shows, and to an extent it was, but the airline's revenue models actually counted on that revenue from the ticketed no-shows.

People began to realize what was up, and thus the drive for protection from being 'bumped' was born.

Of course this is a gross generalization across the whole industry, and many carriers don't overbook at all anymore, but it's still a pretty good overview of the concepts and history behind the problem.

Rgds
Duane


"The two most common elements in the universe are Hydrogen and stupidity"
 
rupertvander82
Posts: 400
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RE: EU Airlines Ordered To Pay For Overbooking

Fri Oct 17, 2003 4:17 am

All these payment for overbooking of flights, are these the reason why airlines in EU are loosing money?