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Originally Posted by BigBen
I'm sorry, but the language used here makes me respond. The airlines do not sell a product (nor do they sell a perishable one). They sell a service. That service is transportation. I hate to nit-pick, but in the language of business and Economics, there is a distinct difference. I blame The Apprentice and Donald Trump for this faux pas, as he is always calling services "Products". A perishable good is a piece of fruit, not a fare on a plane. Notice that you are not buying the seat, but the priveledge of sitting in it for a very defined period of time.
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Yes, you are right. I don't know what you mean by Donald Trump and The Apprentice, but I use the word product because that's what I've heard many of my professors and many airline execs refer to it as. It's not correct, but due to the nature of the industry, that's what a lot of people call it.
Say you have a dry cleaning business. People come in and drop off their clothes, and you clean them. If someone calls and says they are going to be coming in at 3pm to drop off their clothes, but then doesn't, it's really no skin off your back. Someone else can come in at 3pm and drop off their clothes and it's all the same to you. You can still serve someone else at 3 pm despite the fact that the guy who called in did not show up.
An airline, however, cannot serve anybody else once that aircraft has left the gate. If they reserve a seat for you, but you don't show up and the jet leaves without you, that service is gone for ever. They can never sell that 3pm seat from New York to Dallas ever again, because once that jet leaves, it's gone. That service in that point of time has perished.
I forget the exact percentage, but between 5 and 15% of people who reserve seats on a flight never show up. So it makes sense for an airline to overbook a jet because historically speaking, not everyone is going to show up and get on that jet.
If you miss the first flight on a round trip ticket, then they are going to assume that you are not going to be on the return flight. Why should they assume that even though you missed to flight from New York to Dallas, that you will be waiting in Dallas for the return trip to New York? From their point of view, you did not get on in New York, so you can't possibly be in Dallas. So they might as well sell that seat on that aircraft to someone else.
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Well, notice that the fine print of that contract also restricts several other recourses once you have entered into it. In business law, I can think of no other contract that is so one-sided as a transportation voucher on a yank airline. Do the benefits (fast transport) outweigh the costs and risks associated with flying? Not in my books.
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So what? They are not holding a gun to your head and making you enter in to that contract. You are free to not buy that ticket if you don't like the terms of the agreement.
You may think that driving or taking a train is better than flying, but plenty of people don't. That business man that has to be in Dallas tomorrow or he'll lose the multimillion dollar contract sure doesn't.
The thing with the airlines is that it's a business anomaly. There isn't really any other industry that is so cutthroat for such small profit margins (that I know of anyway). I'm not an expert on this stuff though, this is only what I've been taught at school and what I've learned during my internship with one of US airlines. This only applies to US airlines, by the way. I'm not exactly sure what the situation is in Canada, or the rest of the world.