United Airlines is unveiling a new piece of technology that helps them make more money off of overbooked flights.
United's new Flex-Schedule Program allows the company to use take your ticket from an oversold flight and sell it to another customer at a higher rate.
Rather than kicking passengers off of oversold flights and giving them payouts that may reach $1,000, this program allows United to give payouts of just $250 while then selling that passenger's seat to another customer at a higher profit margin.
So, here is how it works.
First, the customer must book their flight at United.com and opt to receive marketing messages.
Then, if the flight that the passenger has purchased a ticket for becomes a high-demand flight, the customer may receive an email asking them if they are flexible with their travel plans.
If they are, they can opt-in and receive a travel voucher worth up to $250.
Once the ticket has been turned over, the customer will be re-booked within 24 hours.
What happens to the ticket?
Oh, it just gets sold to another customer at a higher rate.
What does that do for United?
Oh, it just makes them more money.
Of course, the company that created the technology doesn't see it that way.
Azim Barodawala is the chief executive of Volantio.
He said, "If you can offer a buyout to a customer in advance, everyone will be happier. For airlines, it represents a release valve—a way to shuffle people around when you’re capacity-constrained. This benefits the customer as well, you’re creating choice for them, and that’s what gets me really excited. [Passengers] get the short stick a lot.”
Read the full story at Bloomberg