During the first March nor’easter storm I had a ticket from Dallas to Boston, nonstop on Americn Airlines. About 12 hours before the flight, American emailed to say that the flight had been canceled. Shortly after that, American emailed to say that I had automatically been rebooked for the Dallas to Boston trip via a 9-hour ordeal with a long stop in LaGuardia. Although there were American planes leaving DFW every minute for various destinations, many of which were also served by nonstop flights to Boston, there was no way for me to say “I acknowledge that I’m not getting back to Boston for two days, but I would like to sit this one out in Florida rather than Dallas”. Why not? Wouldn’t that be a common customer desire?
I figured I would try to arrange this over the phone. I spent one hour and 9 minutes on hold and then gave up. I did manage to execute on my plan, though. I purchased a ticket on Southwest to DCA and spent two days with family before purchasing a DCA-BOS leg (arriving at roughly the same time as American’s automated reroute).
To American’s credit, when I called them about 30 hours later they did answer the phone after a 5-minute hold and they refunded my fare for DFW-BOS. But due to the lack of a Web interface for my “take me somewhere else” request, they gave up the revenue for the Dallas-DC leg. I actually would have been willing to kick in an extra $500 to wait in the city of my choice. And American refunded me about $500. So they gave up $1,000 in revenue because they couldn’t answer the phone and couldn’t handle the request via their web site.
Most airlines have procedures where they waive change fees when there are situations like this. This is usually handled manually (with obvious problems), but some airlines have automated the procedure and allow you to rebook online. One thing that makes this difficult is that they want to avoid various kinds of abuse, so they have complicated rules about things like how much longer the replacement itinerary can be, whether you can add a stopover, how much you can change the times and dates, whether they’re willing to put you on a higher class of service if economy is full and there are no other flights that day, etc. etc.
Stavros: I didn’t mean to imply that the re-route should be free. My idea was simply that the re-route should be offered by a computer system so that customers didn’t have to wait for 1+ hours on hold. If the airline wanted to charge me something extra, as noted above, I would have been happy to pay it on a web page in a couple of minutes. It wouldn’t bother me if they had “complicated rules” as you suggest. But ultimately they are always able to boil down those rules to a request for some amount of money. Why not have a computer system do this?
Yes, I worked on exactly those systems. And in fact in the case of cancelled flights, in general, you shouldn’t have to pay anything extra.
Everyone agrees that such systems are a good idea. So why haven’t the airlines adopted such systems faster? Because, airlines.
Less facile answers:
* because they have a lot of IT projects going and limited resources;
* because the highest-priority projects are the ones that need to coordinate with other departments (e.g., adding another cabin class) or bring in significant new revenue;
* because they find it hard to codify all the corner cases, so they depend on human agents’ judgement;
* because when they’re dealing with partner airlines, they need to standardize and formalize procedures which have been informal (believe it or not, airlines do actually cooperate in finding replacement flights sometimes);
* because they like to have “give” in the system (the sob story factor)
etc.
Stavros: That all makes sense, except that they don’t seem to have anywhere near enough “human agents” to deal with even a fairly minor weather event.
Its the 80:20 rule! 80% of the effort is involved with dealing with the hard cases. Economics dictates that its not worth spending resources on such scenarios…
I had a similar problem because of the storm and a much more complicated overseas trip. The airline computer automatically rebooked me on a flight that would not have made my connections. I use a travel agent for business travel for exactly this reason — so that if things get screwed up she can make the calls etc. and fix it. She knows whom to call and what to say. She managed to get me on a direct flight to where I was going that left about 16 hrs later and a two week business trip with lots of connection in difficult places was salvaged. Over maybe a 20 year period and hundreds of flights she has straightened out screwed up situations maybe half a dozen times. When I do personal travel in the us I book myself and take my chances.
Airlines make most of their money from loyal repeat business travelers, hence frequent flyer programs. If you’re a Gold traveler, they really want to keep you happy, so you have a special phone number which gets priority. What’s more, most corporate travelers work through travel management companies (TMCs) or travel agents, who take care of rebooking.
Almost every airline has already automated the default rebooking process, which takes care of 90% of the travelers. Are you proposing that they hire additional call center staff to sit idle 99% of the time to expedite the travelers who don’t have status or travel agencies? I suppose a possibility would be to organize work-from-home overflow call center agents, but that sounds as complicated as actually solving the problem in software, but more expensive.
Stavros: I am definitely not proposing that they hire more humans. As noted in the original posting, since they already have a computer system for selling tickets to anywhere that they fly and they are already emailing stranded travelers offering a computerized re-booking process, why not add one more link that says “Click here to get a refund of your Dallas->Boston leg and use that money, plus a $75 inconvenience credit, toward the purchase of another ticket” (most likely “another ticket” will start in Dallas and eventually end in Boston). I think that they already have all of the software components in place to do this, e.g., refund an unused segment, put a credit into a customer’s account, sell a one-way ticket.
Since you have the legal right to a replacement ticket*** at no extra charge under normal circumstances, this could be considered fraudulent. The price of a replacement ticket on the day of travel is almost certainly *much* higher than the price you originally paid for the ticket. For example, DFW-BOS on AA on Sun Apr 29 currently goes for $146, but today would cost $231. And of course if there were lots of others scrambling for a ticket at the last minute, it would probably be higher. Under some circumstances, an airline may even be obligated to buy you a ticket on a different airline at a much higher price.
As for “they already have all of the software components in place”, yeah, it all seems simple until you try to implement it. You can of course use their normal change procedures for tickets, but then they’ll typically charge you a rebooking fee. Unless they have already put in place procedures to waive the rebooking fee for flights affected by weather (which they typically will have). (That’s another complicated set of rules.)
And what if the original ticket was a round trip which was much cheaper than two one ways? In some international cases, the round trip can cost less than a one way. So what amount would they pay you? Half the round trip doesn’t make sense. What if your flight is the middle leg of a complicated multi-city itinerary? etc. etc.
As usual, it’s a SMOP, like the rest of airline pricing. (http://www.ai.mit.edu/courses/6.034f/psets/ps1/airtravel.pdf — not directly relevant to reaccomodation and refunds, but …)
*** As I said, the rules around the replacement ticket are messy — e.g., are they required to get you to your destination as soon as possible? do they have to pay for a hotel if you’re forced to stop overnight? etc.
Stavros: I didn’t say that I wanted this to be the ONLY option, just that it would be A USEFUL option. The same email where they offered me a Dallas to Boston flight, two days later and with a hellish LGA layover (I have a legal right to be miserable for a day?), they could have said “Here is a different option that you might like”.
Most of the scenarios that you cite are ones that a human agent would ultimately be asking the computer “How much should we credit this customer?” So why not let the computer give me the answer directly? If I hadn’t liked the answer, I could have defaulted back to the two-days-later-with-a-stop-in-LGA option. Putting me on hold for more than an hour and then having me purchase a ticket from a competitor doesn’t seem like a great way to deal with this predictable event.
Sure, suggest it to them.
If you want to automate this, automate cancelling the booking and refunding the customer the money. It should be possible to come up with algorithms to handle how much the refunded amount should be for single legs of multiple leg tickets and similar cases. Add additional money for inconvenience.
The customer then makes his or her own individual arrangements. Sometimes they may cost more than the refund amount and sometimes less.
eD: That’s true. American ended up having to pay someone to take my final phone call (about 40 hours after they cancelled my flight) and manually process a refund for the DFW-BOS leg. So they not only lost the revenue from that flight and the potential re-book, but they had to pay someone to answer the phone and type at a computer when I would have been happy to do the typing.
eD:
Did you read the full discussion above?
a) I don’t work on airline pricing any more.
b) The airlines are in the driver’s seat here. Software providers don’t tell them what to do.
c) “It should be possible to come up with algorithms to handle how much the refunded amount should be for single legs of multiple leg tickets and similar cases.” Yes, that software exists. Often there is no refund at all.
d) There is no guarantee that the refunded amount will be anywhere near the amount needed to replace your leg. Your contract of carriage says that you have the right to a replacement.
e) That is why there is newer software that actually calculates good replacement itineraries. But most airlines haven’t implemented it in their systems yet.
“Often there is no refund at all.” => “Often there is no refund at all; indeed, sometimes the traveler needs to pay additional money in order to remove a leg and keep the rest of the itinerary.”