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Thread: Canada's new Air Passenger Protection Rules

  1. Top | #31
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    Quote Originally Posted by dismal View Post
    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by Jolly_Penguin View Post
    I just don't want to pay more for my ticket because of these new regulations. I don't think that is an unreasonable concern.
    All I am saying is that there is no reason that you should, due to these regulations, as they do not impact profitability of sales of actual seats... it only affects the "beyond profitability" of the practice of collecting more revenue than available product. I do agree that if they wish to provide the option for people to get refunds for cancellations, that the cost of REFUNDABLE seats can be whatever they deem necessary to cover the COSTS of them REFUNDING.
    You're making irrelevant distinctions. The airlines have a revenue model. Part of the revenue model is they sell some number of excess seats on a given flight knowing there will likely be some no-shows. I would guess they have some algorithm that takes into account the historical distribution of no-shows, the cost of buying back seats from volunteers, the fare someone is willing to pay for the next incremental seat, etc etc, that determines how much they'll overbook a flight. So, for example, maybe it spits out an answer like "sell 4 more tickets than are available, then set the price to $800 and sell up to 2 more". Putting a $2000 fine on an oversold seat will change the calculus. They will sell fewer seats. They will have more empty seats. All other things being equal, they will get less revenue. Since their operating costs will not change, except for perhaps increasing as they pay occasional penalties they will likely attempt to make the lost revenue/higher cost back by charging more for the tickets they do sell. The only thing that would prevent them from doing so is competition. But since all other airlines are in the same boat essentially and will also be looking to recoup lost revenue, they should be able to pass this on to consumers.
    Yes, I know all about their revenue model... it is very much like their Risk Management model, whereby the cost of a human life is calculated by the average wrongful death award, and if it costs less to kill people than to fix a deadly flaw, they will kill people every single time and smile the whole way to the bank.

    Their revenue model is "what are they going to do about it, miss Thanksgiving dinner with their family that they only can see a couple of times a year?"

    A payed-for empty seat is MORE profit than a payed-for full seat... less fuel, less soda, less work for cabin crew, less likelihood of passenger-induced delay.
    The amount of revenue of a full flight is identical (well, slightly less) than the amount of revenue for a fully booked flight that people don't actually get on.
    There is not one single cent of nonrefundable ticket sales that goes lost. not one penny. If not one penny is lost, then what is it they need to recoup by price increase? Show me the math. I buy 12 apples for $6. The apples cost the store $1, and another $1 in overhead. The store made $4 from this transaction so far. I bring the apples home and eat 2 of them. How much did the store make now? I eat two more. Now how much did they make? I throw the rest of the apples in the garbage. Now how much did the store make?

    The only possible argument for utilizing that revenue model falls exclusively in situations where revenue potentially falls off... and that is exclusively with the tickets they sell along with an offer to refund them. That is their choice.. .and they can set the price for refundable seats following that model. The model is completely indefensible when the premise is invalid... which is the case for the vast majority of non-business travelers that are paying for their nonrefundable tickets that represent guaranteed revenue for the airline whether they show up to sit in that seat or not.

    "I don't want to pay more" as an argument works for slavery too... if we are to ban slavery, then the price of strawberries will increase... I accept slavery because I don't want to pay more for strawberries.

    You support unfair business practices that negatively impact people because you don't want them cheating you even more... but why would they mind cheating you out more if you are going to just let them?

  2. Top | #32
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    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by dismal View Post

    You're making irrelevant distinctions. The airlines have a revenue model. Part of the revenue model is they sell some number of excess seats on a given flight knowing there will likely be some no-shows. I would guess they have some algorithm that takes into account the historical distribution of no-shows, the cost of buying back seats from volunteers, the fare someone is willing to pay for the next incremental seat, etc etc, that determines how much they'll overbook a flight. So, for example, maybe it spits out an answer like "sell 4 more tickets than are available, then set the price to $800 and sell up to 2 more". Putting a $2000 fine on an oversold seat will change the calculus. They will sell fewer seats. They will have more empty seats. All other things being equal, they will get less revenue. Since their operating costs will not change, except for perhaps increasing as they pay occasional penalties they will likely attempt to make the lost revenue/higher cost back by charging more for the tickets they do sell. The only thing that would prevent them from doing so is competition. But since all other airlines are in the same boat essentially and will also be looking to recoup lost revenue, they should be able to pass this on to consumers.
    Yes, I know all about their revenue model... it is very much like their Risk Management model, whereby the cost of a human life is calculated by the average wrongful death award, and if it costs less to kill people than to fix a deadly flaw, they will kill people every single time and smile the whole way to the bank.

    Their revenue model is "what are they going to do about it, miss Thanksgiving dinner with their family that they only can see a couple of times a year?"

    A payed-for empty seat is MORE profit than a payed-for full seat... less fuel, less soda, less work for cabin crew, less likelihood of passenger-induced delay.
    The amount of revenue of a full flight is identical (well, slightly less) than the amount of revenue for a fully booked flight that people don't actually get on.
    There is not one single cent of nonrefundable ticket sales that goes lost. not one penny. If not one penny is lost, then what is it they need to recoup by price increase? Show me the math. I buy 12 apples for $6. The apples cost the store $1, and another $1 in overhead. The store made $4 from this transaction so far. I bring the apples home and eat 2 of them. How much did the store make now? I eat two more. Now how much did they make? I throw the rest of the apples in the garbage. Now how much did the store make?

    The only possible argument for utilizing that revenue model falls exclusively in situations where revenue potentially falls off... and that is exclusively with the tickets they sell along with an offer to refund them. That is their choice.. .and they can set the price for refundable seats following that model. The model is completely indefensible when the premise is invalid... which is the case for the vast majority of non-business travelers that are paying for their nonrefundable tickets that represent guaranteed revenue for the airline whether they show up to sit in that seat or not.

    "I don't want to pay more" as an argument works for slavery too... if we are to ban slavery, then the price of strawberries will increase... I accept slavery because I don't want to pay more for strawberries.

    You support unfair business practices that negatively impact people because you don't want them cheating you even more... but why would they mind cheating you out more if you are going to just let them?
    Again, you're making irrelevant distinctions. They are going send an airplane from A to B. They want to maximize the revenue (less cost) of sending that airplane. (In reality they are actually trying to maximize the revenue less cost of a fleet of airplanes, but for our purposes we can probably at it as a single flight.) If you restrict their ability to optimize their revenue by overbooking, they will try to recoup it elsewhere. The result of this regulation is with absolute certainty more empty and more expensive seats. How much more expensive and empty I don't know. I don't have the necessary data.

    Now, you can argue the cost is worth it, but if you argue flights are not going to be more expensive and ore empty then you just placing a blinking sign over your head that you are an economic illiterate.

  3. Top | #33
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    Quote Originally Posted by dismal View Post
    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by dismal View Post

    You're making irrelevant distinctions. The airlines have a revenue model. Part of the revenue model is they sell some number of excess seats on a given flight knowing there will likely be some no-shows. I would guess they have some algorithm that takes into account the historical distribution of no-shows, the cost of buying back seats from volunteers, the fare someone is willing to pay for the next incremental seat, etc etc, that determines how much they'll overbook a flight. So, for example, maybe it spits out an answer like "sell 4 more tickets than are available, then set the price to $800 and sell up to 2 more". Putting a $2000 fine on an oversold seat will change the calculus. They will sell fewer seats. They will have more empty seats. All other things being equal, they will get less revenue. Since their operating costs will not change, except for perhaps increasing as they pay occasional penalties they will likely attempt to make the lost revenue/higher cost back by charging more for the tickets they do sell. The only thing that would prevent them from doing so is competition. But since all other airlines are in the same boat essentially and will also be looking to recoup lost revenue, they should be able to pass this on to consumers.
    Yes, I know all about their revenue model... it is very much like their Risk Management model, whereby the cost of a human life is calculated by the average wrongful death award, and if it costs less to kill people than to fix a deadly flaw, they will kill people every single time and smile the whole way to the bank.

    Their revenue model is "what are they going to do about it, miss Thanksgiving dinner with their family that they only can see a couple of times a year?"

    A payed-for empty seat is MORE profit than a payed-for full seat... less fuel, less soda, less work for cabin crew, less likelihood of passenger-induced delay.
    The amount of revenue of a full flight is identical (well, slightly less) than the amount of revenue for a fully booked flight that people don't actually get on.
    There is not one single cent of nonrefundable ticket sales that goes lost. not one penny. If not one penny is lost, then what is it they need to recoup by price increase? Show me the math. I buy 12 apples for $6. The apples cost the store $1, and another $1 in overhead. The store made $4 from this transaction so far. I bring the apples home and eat 2 of them. How much did the store make now? I eat two more. Now how much did they make? I throw the rest of the apples in the garbage. Now how much did the store make?

    The only possible argument for utilizing that revenue model falls exclusively in situations where revenue potentially falls off... and that is exclusively with the tickets they sell along with an offer to refund them. That is their choice.. .and they can set the price for refundable seats following that model. The model is completely indefensible when the premise is invalid... which is the case for the vast majority of non-business travelers that are paying for their nonrefundable tickets that represent guaranteed revenue for the airline whether they show up to sit in that seat or not.

    "I don't want to pay more" as an argument works for slavery too... if we are to ban slavery, then the price of strawberries will increase... I accept slavery because I don't want to pay more for strawberries.

    You support unfair business practices that negatively impact people because you don't want them cheating you even more... but why would they mind cheating you out more if you are going to just let them?
    Again, you're making irrelevant distinctions. They are going send an airplane from A to B. They want to maximize the revenue (less cost) of sending that airplane. (In reality they are actually trying to maximize the revenue less cost of a fleet of airplanes, but for our purposes we can probably at it as a single flight.) If you restrict their ability to optimize their revenue by overbooking, they will try to recoup it elsewhere. The result of this regulation is with absolute certainty more empty and more expensive seats. How much more expensive and empty I don't know. I don't have the necessary data.

    Now, you can argue the cost is worth it, but if you argue flights are not going to be more expensive and ore empty then you just placing a blinking sign over your head that you are an economic illiterate.
    We are arguing past each other. I am talking about the fact that overbooking nonrefundable flights is indefensible, and you are talking about the consequences of it being indefensible. I am saying that the consequence of that can be recouped by setting the price for REFUNDABLE TICKETS as needed. and you seem to just be ignoring that part.

  4. Top | #34
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    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by dismal View Post

    Again, you're making irrelevant distinctions. They are going send an airplane from A to B. They want to maximize the revenue (less cost) of sending that airplane. (In reality they are actually trying to maximize the revenue less cost of a fleet of airplanes, but for our purposes we can probably at it as a single flight.) If you restrict their ability to optimize their revenue by overbooking, they will try to recoup it elsewhere. The result of this regulation is with absolute certainty more empty and more expensive seats. How much more expensive and empty I don't know. I don't have the necessary data.

    Now, you can argue the cost is worth it, but if you argue flights are not going to be more expensive and ore empty then you just placing a blinking sign over your head that you are an economic illiterate.
    We are arguing past each other. I am talking about the fact that overbooking nonrefundable flights is indefensible, and you are talking about the consequences of it being indefensible. I am saying that the consequence of that can be recouped by setting the price for REFUNDABLE TICKETS as needed. and you seem to just be ignoring that part.
    The airlines do it because it makes them more revenue, keeps their planes more full, and allows them to charge less for seats in general. That would be their defense.

    So it is "defensible", though you may not find it a valid defense.

    That's fine, I have no desire to argue with you as you venture into assertions of religious belief and morality.

  5. Top | #35
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    Quote Originally Posted by dismal View Post
    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by dismal View Post

    Again, you're making irrelevant distinctions. They are going send an airplane from A to B. They want to maximize the revenue (less cost) of sending that airplane. (In reality they are actually trying to maximize the revenue less cost of a fleet of airplanes, but for our purposes we can probably at it as a single flight.) If you restrict their ability to optimize their revenue by overbooking, they will try to recoup it elsewhere. The result of this regulation is with absolute certainty more empty and more expensive seats. How much more expensive and empty I don't know. I don't have the necessary data.

    Now, you can argue the cost is worth it, but if you argue flights are not going to be more expensive and ore empty then you just placing a blinking sign over your head that you are an economic illiterate.
    We are arguing past each other. I am talking about the fact that overbooking nonrefundable flights is indefensible, and you are talking about the consequences of it being indefensible. I am saying that the consequence of that can be recouped by setting the price for REFUNDABLE TICKETS as needed. and you seem to just be ignoring that part.
    The airlines do it because it makes them more revenue, keeps their planes more full, and allows them to charge less for seats in general. That would be their defense.

    So it is "defensible", though you may not find it a valid defense.

    That's fine, I have no desire to argue with you as you venture into assertions of religious belief and morality.
    And if they do that, they should be forced to accept liability for selling things that they cannot fulfill. They are the ones that decided to gamble with other people's time and convenience under the apparent promise of being able to fly at a given time, they should bear the burden against their profits. And don't for a second pretend that the airlines don't make a profit.

  6. Top | #36
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    Quote Originally Posted by Gun Nut View Post
    Quote Originally Posted by Axulus View Post
    Quote Originally Posted by Jolly_Penguin View Post
    Its overblown and will be use as an excuse by the airlines to raise prices. Maybe if you could somehow get price control on the airlines I would agree with you, but that isn't going to happen. The end effect is I pay more for my tickets and very likely gain nothing for it since the odds of me being bumped from a flight due to them overselling is very small. The odds of my baggage being damaged or lost is pretty much zero since I only bring carry on.
    It's not an excuse. This law will reduce the number of tickets available for sale for each flight from Canada. Reduced supply of a good inevitably leads to higher prices. Economics 101.
    The tickets are not the goods (those would be receipts)... the goods are the seats, and the number of them is unchanged.
    Not really. The airlines are selling a service i.e. get you from point A to point B. No "goods" are involved per se.

  7. Top | #37
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    Quote Originally Posted by ronburgundy View Post
    Quote Originally Posted by Jolly_Penguin View Post

    Yes, and as a frequent consumer of flights, I am more concerned about the costs overall increasing on me than my luggage being lost or my flight being bumped.
    Yeah, but as a frequent flyer, you will never be the one who gets bumped and has your vacation ruined, costing you potentially thousands.

    Also, it won't actually mean that the airlines don't oversell tickets, thus won't increase the average ticket price by more than a couple bucks. They can and will still offer people $300 vouchers to "volunteer" their seat and most times that will work. The only time they will need to pay the $2400 is when the amount of delay till the next flight is so extreme and thus no one on the plane wants to take the voucher. And that is just the situation where the person who is unwillingly bumped deserves that level of compensation. And no, people won't "hold out" for the $2400 b/c they are not likely to be the person selected to get bumped, so refusing the voucher to get more $ won't work.

    And a lost piece of luggage on one's vacation is easily worth $2000 for the level of stress, hassle, $, and time it costs.
    These are inherent costs that the airlines should have always paid out and put into their costs of doing business. The fact that they have increased profits by unethically screwing people over and passed a small portion of their savings onto you, isn't a good argument for them to keep doing it. Want to lower flight costs without screwing other people over? Then support stronger regulations that prohibit the airline mergers that have caused skyrocketing prices and ever decreasing quality of service, comfort, etc..
    This is the key to it right here. In a better world (the old world when I was young), there would be competition and different airlines to choose from. Jolly could pick "Cheapo Jolly Airlines" for the best price. And I could choose "Safe and No Bullshit Airlines" for the not so great price....and we would both be happy with what we ended up with. And both the airlines would make money and stay in business too.

  8. Top | #38
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    Quote Originally Posted by Gun Nut View Post
    I never understood why the airline industry was the only one allowed to sell a product they do not own. They sell more seats on planes that they have, which is why "bumping" happens at all (except in very rare cases where they need to transport a backup pilot for regulatory reasons - like a delay due to weather disqualified the scheduled pilot and new one was needed for compliance).
    That's fraud. There is not one penny of loss due to a ticketed passenger not showing up... they pay for their ticket up front whether their ass is in the seat or not.
    The hotel industry does the same thing except without mandated compensation.

    And there is a loss to the airline--they plan for a certain number of no-shows and thus sell more tickets than there are seats. Once in a while they end up with too many actually flying.

    I do favor the penalty for this being high--but not because I expect them to actually pay it. Rather, the penalty should be set high so they try much harder to find volunteers.

    I also want the lost baggage penalty high, again not to make them actually pay it, but rather to make them take more care.

    When the penalty is low enough that it's just a cost of doing business that they make little effort to avoid it's not a good thing.

  9. Top | #39
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    Quote Originally Posted by Jolly_Penguin View Post
    How early/late do people typically cancel? People who simply don't show up for their flight will leave empty seats with no chance to fill them. Or will this mean flying standby will become more of a thing again?

    If I show up when I want to fly and just sit around day after day, will a seat now open up and be mine for cheap?
    With most tickets you get nothing if you cancel them so why cancel them? Sit on them and hope for a schedule change that you can use as a pretext to demand a refund.

    Besides, most of the issue is with business travelers who don't know in advance that they aren't going to fly, and with people who misconnected (who still have a valid ticket and need to be reaccomodated.)

  10. Top | #40
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    Quote Originally Posted by Loren Pechtel View Post
    Quote Originally Posted by Jolly_Penguin View Post
    How early/late do people typically cancel? People who simply don't show up for their flight will leave empty seats with no chance to fill them. Or will this mean flying standby will become more of a thing again?

    If I show up when I want to fly and just sit around day after day, will a seat now open up and be mine for cheap?
    With most tickets you get nothing if you cancel them so why cancel them? Sit on them and hope for a schedule change that you can use as a pretext to demand a refund.

    Besides, most of the issue is with business travelers who don't know in advance that they aren't going to fly, and with people who misconnected (who still have a valid ticket and need to be reaccomodated.)
    Sure but in the old days, and maybe now again, you could just stand by and wait to see if people don't show up, and then score the seats for cheap if they don't. That would be ideal on especially expensive and long trips (like Montreal to Tokyo)

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