Airlines turn to technology to solve overbooking puzzle

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FILE PHOTO: A British Airways Boeing 747 passenger aircraft prepares to take off as passengers wait to board a flight in Cape Town International airport in Cape Town, South Africa, January 12, 2018. REUTERS/Hannah McKay/File Photo
FILE
PHOTO:A British Airways Boeing 747 passenger aircraft prepares to
take off as passengers wait to board a flight in Cape Town
International airport in Cape Town

Thomson Reuters

By Sarah Young and Victoria Bryan

LONDON/BERLIN (Reuters) – Being offered cash at the gate to take
a later flight because of overbooking may become a rarity if
technology being examined by major airlines such as British
Airways , JetBlue and Qantas catches on.

The forceful removal of a passenger from an overbooked United
Airlines flight last year sparked an online backlash last year
and U.S. carriers pledged to revise their policies.

Many airlines still routinely overbook flights because a small
number of passengers do not show up. If planes are overloaded,
they seek volunteers to change flights before boarding, usually
in exchange for cash.

A platform developed by Atlanta-based travel technology company
Volantio will identify passengers most likely to be flexible
about their flights and enable airlines to contact them in the
days before they are due to depart.

The carrier can then offer an alternative seat plus incentives
such as an upgrade or travel vouchers.

Volantio CEO Azim Barodawala said anyone who opts in to its
system can be contacted. Machine learning algorithms will use
data such as information available on the flight list to help
determine which types of passengers might be ready to change.

“There are huge privacy concerns over who can be contacted. The
partners with whom we’ve worked so far typically have a setting
in their marketing permissions that permit us to reach out to
them,” he told Reuters.

Barodawala gave a hypothetical example that someone flying from
Frankfurt to Paris and back in a day is likely to be on business
and need to stick to those flight times.

The technology also means airlines can also potentially shift
passengers from high demand flights and free up tickets for
last-minute travelers prepared to pay a premium.

“It gives airlines the ability to generate some extra revenue
while making two other parties better off – the flexible traveler
and also the last-minute traveler who might not have been able to
get a seat because the flight was sold out,” Barodawala said.

It could also help airlines if they need to free up seats to
rebook passengers following disruptions such as those related to
bad weather.

Volantio said this week it had raised $2.6 million in a funding
round, led by Ingleside Investors, representing the interests of
the New York-based Israel family, but also involving BA-owner
International Airlines Group, JetBlue, and Qantas.

IAG, whose stable of airlines also includes Vueling, Iberia and
Aer Lingus, declined to say how much it would be putting into
start-up Volantio. It has established a multimillion-pound fund
to help to expand its digital abilities.

JetBlue invested through its Technology Ventures arm and Qantas
through Qantas Ventures.

(Reporting by Sarah Young and Victoria Bryan; Editing by Keith
Weir)



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