Delta to fliers: Name your price to be bumped
Airline asks passengers for secret bids on how much they want to give up their seats on full flights.
Delta Air Lines has come up with a new twist on the silent auction: asking fliers to place secret bids on how much money they would accept in exchange for being bumped from a full flight.
The system, which went into effect in December on domestic flights, offers passengers the option when they check in online or at airport kiosks for an overbooked flight. The airline expects the new system to not only save money, but time at the gate, where airlines historically have used a loudspeaker to solicit volunteers. (I've scored several free airline tickets that way.)
Predictions are for more demand for fewer flights this year, which means that overbooking -- and how airlines compensate passengers -- will be more of an issue. Delta believes passengers making secret bids will accept lower amounts to be bumped, perhaps less than the airline would have offered in public.
Here is how the process has changed, explains The Atlanta Journal-Constitution:
While Delta previously asked for volunteers by offering a specific amount in vouchers -- say, $200 -- the new system requires travelers to name their price. The bidding methods could burn inexperienced travelers who offer a low bid. Experienced travelers, meanwhile, may find themselves undercut in the effort to collect vouchers.
Ah, for the good old days, when agreeing to be bumped got you a free round-trip flight to anywhere in the country, any time you wanted to go. Then it was restricted round-trip flights, then it was vouchers worth a specified dollar amount, and now it's a "name your price" secret auction. Post continues after video.
Delta's new method of handling overbooking comes as the U.S. Department of Transportation weighs a proposal to require airlines to pay customers who are involuntarily bumped to a later flight $650 for a one- to two-hour delay (up from $400) and $1,300 for a longer delay, up from $800.
You can see how Delta can save money by soliciting volunteers to accept less than the federal mandated amount.
A total of 541,694 passengers on U.S. airlines agreed to be bumped in the first nine months of 2010, up from 510,878 in the same period of 2009. The number bumped without their consent rose from 52,219 in the first nine months of 2009 to 53,287 in the same period of 2010, according to a story by Mike Esterl of The Wall Street Journal.
If this tactic is successful for Delta, and it seems to be working so far, expect other airlines to follow suit.
And don't bid too low.
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