United testing program that could change how airlines handle overbooked flights

United Airlines (UAL) is piloting new technology that could help reduce the number of people that get bumped off planes.

Starting this week, United is testing a Flex-Schedule Program that could prevent the airline from bumping passengers off oversold flights at the last minute. Instead of asking for volunteers in the boarding gate,  the proposed program would allow United to offer people compensation for changing their flight up to five days in advance. And other airlines are following suit.

The piloted program comes after United received a torrent of negative publicity for forcefully dragging a man off an overbooked flight in April. In the aftermath, the airline changed its policy to offer up to $10,000 for passengers to give up their seats at the last minute. The Flex-Schedule program could be just another tool to improve customer service.

“We are always looking at new ways to innovate and improve the customer experience and this extremely small test is an example of one of many opportunities we are reviewing,” a United spokesperson told Yahoo Finance. “United has already taken steps to reduce overbooking, resulting in a 90% year-over-year reduction of involuntary denied boarding for the month of June.”

A win for customers

As a traveler, the only thing you would have to do is wait for an email from United.

United’s computer system is able to look at bookings and flight trends to guesstimate if a plane will be full. If they believe the flight will be oversold, the airline could email select passengers, offering them seats on a flight with openings. To participate in the pilot program you have to be a MileagePlus member who has opted in to receive marketing emails from United.

If accepted, passengers will be rebooked within 24 hours and receive a voucher for up to $250. Travelers will never be asked to change their travel dates, airport or seat preferences.

Typically, an airline asks for volunteers to switch flights when passengers are already sitting in the boarding area. By using the Flex-Schedule program, someone with a more flexible itinerary will be able to accept the voucher without schlepping all his bags to the airport, through security and to their gate – only to be asked later if he can switch flights. This proactive approach could allow customers to feel like they have a little bit of control when it comes to their travel options.

Volantio, a company that works to optimize marketing and revenue for businesses in the travel industry, created the Flex Schedule software. The company essentially works as the middleman, helping airlines identify passengers who can be moved and then reaching out to them via text or email. It creates a bullpen of moveable candidates that the airline can use if needed. Volantio CEO Azim Barodawala sees his product as something that can transform the experience for both customers and airlines.

“Using technology to connect people is valuable for airlines, and the ability to move capacity from one place to another is pretty cool and could unlock some interesting revenue,” Barodawala told Yahoo Finance.

There are always customers who cancel or don’t show up for their itineraries, which is one of the reasons why airlines oversell flights. This can still happen. However, the Flex Schedule Program would allow United to sell those tickets to someone who needs it, like business travelers.  By charging more for those last-minute tickets, United could explore additional revenue. 

To airlines and beyond

United is piloting their Flex Schedule Program until August, but other airlines are following suit. Currently, Volantia is in discussions to work with Alaska Air in September and Qantas by October.

Looking forward, Barodawala sees potential for Volantia to be used in other travel industries.

For example, let’s say you have a family of four who booked a hotel in Orlando eight months in advance. A few months later, a company books a conference at the hotel and needs 10 rooms, but only 7 are available. Using Volantio, the hotel could reach out to the family, offer them compensation and promise to rebook them in a similar hotel within the chain.

“In some cases, the family just wants to be in Orlando, and may be indifferent to what hotel they stay in,” says Barodawala. “Starwood is a large chain with several properties in every city, so a service like this could work well for them.”

Barodawala also sees potential with cruise ships, which would be able to shift capacity from one boat to another, ensuring they are sailing with full ships.

It rarely benefits customers when airlines change rules. We don’t know what the future holds for United’s Flex-Schedule Program, but it’s refreshing to see a major airline trying something that doesn’t shortchange travelers.

Brittany is a reporter at Yahoo Finance. 

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