Delta Air Lines is set to get more passengers off flights as it increases the number of flights it sells — but it could earn customers up to $10,000.
President Glenn Hauenstein said on an earnings call earlier this month that the company — which reported pre-tax income of $2.7 billion last year — was planning to “slightly ramp up” overbookings after seeing a spike in passengers who failed to show up. . flights.
Selling more tickets than available seats is a common practice among airlines. The idea is to make sure planes are as full as possible – with companies assuming that a certain number of passengers will miss a flight or change their travel plans.
If every passenger shows up, crew members will ask volunteers to give up their seats in exchange for compensation, in some cases up to $10,000.
But if volunteers don’t step forward, airlines can involuntarily ram passengers — although Delta says that rarely happens.
Delta was planning an ‘uptick’ in overbookings after seeing a spike in passengers who failed to show up for flights, President Glenn Hounstein said on an earnings call.
Airlines use an algorithm to decide which flights to sell and for how much.
Delta is believed to be seeing a higher rate of no-shows after it eliminated change and cancellation fees on its domestic flights in 2020.
This means customers can change or cancel their flight for free within 24 hours of booking.
On an earnings call from April 13, Hoenstein explained: “I think what we’ve seen is travel patterns shifting and changing a little bit more than they were before the pandemic.
“We had a lot of stability before the pandemic and here we are adjusting to what I would call the new normal.”
He added that it meant “booked for travel” rates had fallen in the first three months of the year – meaning fewer passengers turned up for flights booked.
“That’s really easy to digest because we’re slightly raising our overbooking levels to make sure we get a higher load factor.”
Later in the call, Hauenstein explained that the rate of overbookings would increase gradually.
“If your average is 103% and you have 2 more points, just move to 105% in terms of your possession ability,” he said.
There is a small amount of risk in that, and so we probably wouldn’t go to 105% right away. We go to 104%, see how that works out, 104.5%.
he added: ‘We don’t want to overtake and cause turbulence, so we’ll be a little more careful about getting that actual time.
This past July, Delta offered $10,000 to each passenger who volunteered to be dressed up from a redundant flight from Michigan to Minnesota.
Originally the passengers were offered $5,000 but the price was doubled after no one expressed interest.
In April 2017, the company circulated an internal memo announcing that employees could offer up to $9,950 to passengers who agree to give up their seats on overcrowded flights.
Airlines have come under fire in recent months for increasing costs at the same time that customer service standards have dropped.
A recent report from the American Automobile Association (AAA) found that the price of an international airline ticket from the United States has increased by 30 percent in the past year.
Meanwhile, WhatsNew2Day.com revealed last week that flight delays have risen to the highest level in a decade, with a fifth of flights landing late in the past 12 months.
The issue is particularly contentious among consumers after the airline industry received $50 billion in relief during the pandemic when air travel was halted almost overnight.
Airlines have come under fire in recent months for increasing costs at the same time that customer service standards have dropped
While airlines made huge profits in 2021 and 2020, most of them have recovered since life returned to normal.
In 2022, Delta reported pre-tax income of $2.7 billion, up from $398 million in 2021.
The airline posted a larger-than-expected loss for the first three months of the year, recording a net loss of $363 million.
But the company shrugged off the loss as executives expected sales in the current quarter to rise between 15 and 17 percent from a year ago.
It comes as President Joe Biden vowed to crack down on so-called “junk fees” charged by airlines.
The Department of Transportation has proposed a rule that would require airlines and booking platforms to show the total ticket price upfront.
It will prevent companies from adding hidden fees to the advertised cost.
WhatsNew2Day.com has reached out to Delta Airlines for comment.
