American has a new bidding system for customers to volunteer for denied boarding compensation. The goal is to hold down costs by getting customers to state up front how much they’ll accept for a bump, and the airline started holding people to their bid amounts rather than paying everyone the highest amount necessary to get enough volunteers.
This new process is called “Pay What You Bid.” And gate agents have the onus of being discrete so they don’t discuss what other passengers are getting, or announce amounts publicly when the need to solicit more volunteers. That’s not great for gate agents trying to get flights out. And once the flight takes off everyone getting a voucher will be standing there learning what everyone else got, turning a rewarding experience into a resentful customer interaction.
One problem with this system has been customers placing their bids without knowing how long it will be until the next flight they’re able to get on, so it’s not really possible for a customer to know in advance what amount they’d accept for inconvenience.
According to American Airlines expert JonNYC American is testing a new approach to showing customers flights when they’re volunteering, but there’s a pretty big catch.
AA experimenting with Denied Boarding Automation (DBA), showing some customers 2 flight options to choose from in advance of overbooked flight when putting in their “bid” for IDB $-amount. Availability will be shown as dynamic/very subject to change.
— JonNYC (@xJonNYC) January 31, 2020
The benefit to American of showing flight options to customers in advance is clear,
- If you know what flight you’ll get after taking denied boarding compensation you’ll be more likely to volunteer (and more volunteers means lower payouts).
- At the very least knowing what flights will be available means a more informed decision, so people who indicate willingness to volunteer are more likely to be firm volunteers when the time comes.
The problem is the flights customers are shown – and select – aren’t actually held for them (‘very subject to change’). American is unwilling to hold inventory for everyone who volunteers, since many volunteers that are solicited through this process won’t actually be used. But that means that between the time customers are shown flight options, and they’re actually used as a volunteer at the gate, availability for the flight they’re shown – and select – can disappear.
American discloses this. But there are going to be frustrated customers when this happen, who will quite reasonably assume that when they select a flight to take after agreeing to volunteer that they will be able to take that flight. They’ll wonder what the point of the exercise of choosing a flight was if it didn’t actually hold space on the flight?
I understand this is only being offered on a test basis for customers volunteering pretty close to departure so hopefully inventory will usually still be available!