United has introduced a new overbooking policy. Initially, they explained the new policy where passengers could receive up to $10,000 for agreeing to give up a seat on an overbooked flight. Now if people are on a potentially overbooked flight they will receive an email with a voucher for $250 if they agree to change their flight.
The idea is that leisure passengers will be willing to give up their seats for the money while business passengers will be willing to pay extra for the last minute seats.
Azim Barodawala, the chief executive of Volantio explained the concept.
“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.”