Dallas-Based Southwest Airlines Stops Overbooking Passengers
A Southwest Airlines Boeing 737.
Dallas-based Southwest Airlines announced Thursday that it will no longer overbook flights on any of its routes as early as May 8. The airline says that, thanks to improved forecasting tools and a new booking system, it no longer needs to rely on selling more tickets than available seats.
"Southwest is changing our policy and will no longer book flights over capacity as part of the selling process," Southwest spokeswoman Brandy King said in a statement. "As we have dramatically improved our forecasting tools and techniques, and as we approach the upcoming implementation of our new reservations system on May 9, we no longer have a need to overbook as part of the revenue management inventory process."
The move comes after a recent video surfaced showing Chicago airport police dragging an involuntarily bumped passenger from a United Airlines flight. The incident has put the common practice of overbooking into the spotlight.
Southwest CEO Gary Kelly said the airline has been preparing to dump the practice for some time. "We’ve been taking steps over the last several years to prepare ourselves for this, anyway," he told CNBC. "We never like to have a situation where we we’re oversold."
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According to Kelly, Southwest rarely overbooks flights by more than a seat or two and only does so to keep fares as low as possible on the discount carrier. He declined to say whether he believed other airlines should similarly stop overbooking. “I think that’s an airline-by-airline decision. I’ll speak for Southwest Airlines,” he said. “We overbook very, very modestly today. The reason we overbook is to try to fill empty seats. To the extent we’re able to do that, we’re able to keep the rest of our fares lower.”
Rather than dumping overbooking, United announced Wednesday that it's increased the maximum compensation it will give passengers who accept getting bumped voluntarily to $10,000. The airline also announced that it's reached a financial settlement with David Dao, the man kicked off the plane in Chicago.
Despite the policy change, King said there are still certain instances in which passengers could be asked to take a flight later than the one for which they have a ticket.
"This doesn’t mean flights never will be over capacity as we approach departure time," she said. "Occasionally, operational challenges will have our airport-based employees asking for volunteers, but that will happen much less frequently because overbooking to customers in advance will be off the table as a consideration."
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