Last week, Delta had more passengers than seats available on flight 1668 from Seattle to Palm Springs. A passenger reported that “there was chaos” at the gate, since not everyone could be accommodated – and the airline instituted a bidding process to get 5 people to give up their seats.
- The gate agent’s opening offer was $1,000 and a hotel voucher and travel the next day (since Delta has just one flight a day on the route)
- Offers continued even while they were boarding the aircraft. They upped compensation to $1,500.
- Then they went to “$1,800 and then $2,000.”
When they finally hit $2,200, two people volunteered. At $2,500 a third passenger volunteered. Finally, when they hit $2,800 “an older couple” agreed and they reached the 5 people they needed. All 5 passengers received the highest bid amount offered of $2,800 – and at Delta it’s not even future travel credit. As part of their American Express deal that generated $7.6 billion in 2024, Delta uses American Express gift cards for denied boarding credit and buys jet fuel on a corporate Amex with the highest credit limit in the world of $1.1 billion.
According to this passenger, the overbooking was triggered by a change in aircraft.
Apparently the plane that was to be used for last flight to Palm Springs for the day had mechanical issues and the only other plane they had to replace it was smaller so people were being asked to give up seats.
What’s amazing is that Delta was so generous in this case, for two reasons.
- If they were required to compensate passengers for the overbooking, the most they’d have had to pay a passenger is 400% of their one-way fare, not to exceed $2,150.
- However, Delta wouldn’t have been required to pay passengers at all if they substituted the plane for a smaller aircraft.
Delta doesn’t want ‘involuntary denied boardings’ and is willing to keep bidding up their offers until passengers willingly give up their seats which is really commendable.
In the first six months of last year, Delta involuntarily denied boarding to just a single passenger In contrast, American Airlines involuntarily bumped 6,832. American isn’t willing to make generous offers to customers to give up their seats, does the minimum required by law, and involuntarily bumps more passengers than all other U.S. airlines combined.
As a passenger, it’s important to consider game theory in situations like this. Everyone who gives up their seat is going to get the highest amount offered. You just need to get in on this before other passengers do. One Delta passenger received $5,000 for giving up his seat twice in the same day.
With supervisor approval, the airline will go up to $9,950 in compensation for passenger. If you form a cartel and everyone holds out, Delta keeps bidding up the offer. Can you get everyone to hold out, so that all volunteering passengers get a bigger payday? If you honor the agreement to hold out, and others defect, they get paid and you do not. That’s the essence of OPEC.
It’s important to consider also how your loved ones or your employer will react to your skipping a flight to see them. One woman was furious with her boyfriend for taking $2,000 from Delta and delaying seeing her. He should have taken a Coasian approach and split the money with her, spending some of the money on a present. (“I did it for your, sweetheart…”)
Woohoo, enjoy the gifts cards! Nice that Delta was extra generous and went above and beyond.
I thought it was interesting that all the volunteers ended up getting the highest bid. Adds another dimension to the game theory — perhaps one would want to lock in something early and let the others sweat it out/drive up the bargain for you…
Otherwise known as the “Prisoner’s Dilemma” in game theory.
Shortly after the United – Dr Dao incident, Delta gave 7 or 8 of us each $2800 for a flight from ATL-ORD. In addition to the money, we were rebooked on a flight 90 minutes later. They probably could have sent us on a private jet for less.
My family of 5 was going to Hawaii back in the 90’s and an equipment swap required volunteers as this was a smaller plane.
They were offering $1,200 cash (about $2,500 in todays money) I so wanted to take them up on the offer and net $12,500 but the deal breaker was that they were not guaranteeing a seat on the next flight. It would be standby. Can’t do that with kids in tow. 🙁
Well done, Delta. A ‘fine’ resolution for those passengers. Glad to see things worked out here.
That contrast between Delta denying just a single passenger involuntarily vs. a whopping *6,832* people by American Airlines in the same time frame is… astounding. Makes me want to only fly with the former.
I do enjoy the ‘game theory’ concept here. If Delta will in-theory go up to $9,950, then it behooves passengers to have ‘solidarity’ in situations like this, as opposed to cannibalizing each others’ potential benefit. Oh Gary, always bringing up the Coasian approach–maybe it’ll catch-on someday.
Finally, I’d like to think if this were a ‘work’ trip, you wouldn’t need to tell your employer, or to have to split the proceeds with anyone, but I’m sure the ‘boss’ would want his ‘cut,’ if you did.
@Rick — Thank you for bringing up Dr. Dao. I hope that guy got paid big-time and never has to fly commercial again if he doesn’t want to after such harm and defamation against him by United.
@Denver Refugee — Whose side are you on anyway, the airline or the passengers? We passengers are nothing like OPEC–we have hardly any bargaining power or control over anything in these situations. Let’s side with the ‘little guy’ in these situations, please.
Merely pointing out that the “cooperate” versus “defect” problem is a common one. If passengers “cooperate”, they stand the best chance of winning as a whole. However, the first passenger to “defect” (i.e. take the first or early offer) also stands the best chance of winning at the expense of the rest of the group.
And, voluntarily giving up your seat has its own risks. I’ve been burned by that before where the later flight runs into weather delays, crew timeouts, and so forth…
@Denver Refugee — Yes, cooperation is key. I wish others understood this better. Then again, as with most industries, the consumers are up against highly-effective, 24/7, pro-business propaganda focused on distracting and dividing us. Clearly, one side is winning, and it usually isn’t ‘the people.’
@Denver Refugee @1990 Very true, game theory only comes into play if no one collaborates with each other. If only!
Thank you Pete and Joe!!!
It is amazing how little dollar value people ascribe to their time. I would give up my seat for an earlier flight, but never for a later flight. Because as @DenverRefugee said, the “next” flight is subject to further delay, end of day crew timeout, further overbooking, weather that did not affect the earlier flight, ATC holds more likely in the afternoon/evening, etc. In addition to the added time burden in the airport and less time at your destination.
AA is always cheaper than DL on the routes I fly. Clearly the passenger gets what the passenger pays for.
@Dana S – Pete and Joe? This policy by delta dates to 2017… but don’t thank Trump, you can thank David Dao…