This is a story told to me by Richard P. Gruen.
He learned that American Airlines oversold tickets on seats in anticipation of some random quantity of no-shows.
This was well known but Richard also noticed that some flights had a considerably larger fraction of no-shows than others.
AA oversold these flights at the same rate as the typically high no-show flights.
Several flights with a high rate of passengers showing up took off from an airport near Richard’s residence.
He would buy a ticket on such a flight and show up for boarding.
Frequently the flight was oversold and he would volunteer to ‘stay behind’.
There was in effect at the time a mandated auction among the passengers with reservations as who would stay behind.
For what it is worth airlines did not charge no-shows.
It just now occurred to me that while this sounds like fraud, it was in fact a win-win-win situation:
AA’s reputation was marginally improved as a consequence of fewer real bumps.
- Richard collected the awards for giving up his seat.
- AA payed slightly less in the way of awards since there were more bidders.
- Passengers really needing to fly were less often bumped.
This did not last long.
AA noticed Richard.
They used the stats that they already had to overbook different flights differently.
End of game.