Dr Dao and the United Airlines incident

[East coast]

It's an

RetiredERdoc wrote:

So now Delta and United  have announced that they will increase their payout for people being bumped to up to 10k. Does this mean that everyone will now hold out for the full 10k? For example, United announces they need a seat, any volunteers for $500? Who is going to say, yes, I will take $500 when they could potentially make $10k? Does this mean that everyone is going to have to pay higher ticket prices  to make up for this? According to a recent news story, “A total of 40,629 passengers were denied boarding involuntarily on domestic flights in 2016”

Does this mean airlines will have to come up with $406,290,000 more each year? I know not all airlines have announced the bump in price, but maybe I am extropilating too much.

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It's an auction, so they start low until they get a response. Vast majority of the time they only get to the low hundred $$. I fly a fair amount and I've seen it get up to $1k only once. This really doesn't change much.  airlines are increasingly becoming credit card companies - something like half their income from credit cards, so this change will have zero effect on price of a seat.

[Zaphod]

East coast wrote:

It’s an

RetiredERdoc wrote:

So now Delta and United  have announced that they will increase their payout for people being bumped to up to 10k. Does this mean that everyone will now hold out for the full 10k? For example, United announces they need a seat, any volunteers for $500? Who is going to say, yes, I will take $500 when they could potentially make $10k? Does this mean that everyone is going to have to pay higher ticket prices  to make up for this? According to a recent news story, “A total of 40,629 passengers were denied boarding involuntarily on domestic flights in 2016”

Does this mean airlines will have to come up with $406,290,000 more each year? I know not all airlines have announced the bump in price, but maybe I am extropilating too much.

Click to expand…

It’s an auction, so they start low until they get a response. Vast majority of the time they only get to the low hundred $$. I fly a fair amount and I’ve seen it get up to $1k only once. This really doesn’t change much.  airlines are increasingly becoming credit card companies – something like half their income from credit cards, so this change will have zero effect on price of a seat.

Click to expand...

However, announcing such a limit could easily lead to collusion, which would lead to some very interesting game theory situations. I would do it. Not sure if it was the best to tell everyone, but PR stuff of course.

[RetiredERdoc]

I wonder if people in the past had a very poor understanding of what the airlines could pay, so they would take the 500$ not realizing it could go to 1350 or whatever. but now it is very public about the 10k.

[GXA]

I do not think making the 10k limit public matters.  If I had the flexibility, I would bite at 5k a ticket, or 2k a ticket, and there may be others who would bite sooner.  It would be difficult to collude with a planeful of passengers.  As their offers go up, there will eventually be a party who find the tradeoff worth their while.

[Zaphod]

GXA wrote:

I do not think making the 10k limit public matters.  If I had the flexibility, I would bite at 5k a ticket, or 2k a ticket, and there may be others who would bite sooner.  It would be difficult to collude with a planeful of passengers.  As their offers go up, there will eventually be a party who find the tradeoff worth their while.

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Therein lies the interesting dynamics. Say you got a group to agree to let it get bid up until it was across some threshold someone could bite. You have possible cooperation for a better overall outcome vs. the individuals personal gain by cutting in ahead of the threshold. Often its best to work together, yet it almost never works out in reality. Fun thought experiments though.