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Southwest to no longer overbook flights

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Southwest to no longer overbook flights

Unread post by bimjim » Fri Apr 28, 2017

http://www.travelweekly.com/Travel-News ... ok-flights

Southwest to no longer overbook flights
Robert Silk
April 27, 2017

Southwest will stop overbooking flights by the end of June, CEO Gary Kelly said Thursday. "I'm not quite ready to give you an exact timeline, but we're going to move on this very quickly," Kelly said during the carrier's earnings call.

Last year, Southwest had the ignominious honor of leading major U.S. airlines in the frequency with which it involuntarily denied boarding to passengers. Southwest's rate of 0.99 involuntary denials per 10,000 passengers was more than double the rate of United, which continues to reel from the public relations disaster that began when it had passenger David Dao removed from an overbooked flight on April 9.

Eighty percent of Southwest's denials were due to overselling aircraft, the carrier said Thursday.

Kelly acknowledged that the decision to end overbooking was spurred by the Dao incident, in which Chicago Department of Aviation police dragged the doctor bloodied and injured off a United Express flight.

But he also said Southwest has been thinking about ending the practice for a while. "We want to be the world's most loved airline," Kelly said, adding that ending overbooking would complement Southwest's existing customer-friendly policies of not charging bag fees or change fees.

At present, Southwest typically overbooks its 143-seat, 737-700 aircraft by one customer, Kelly said.

He and Southwest CFO Tammy Romo said that ending overbooking won't have a significant impact on the bottom line and won't lead to higher ticket prices. "We don't want to do this in a way that will cost our customers more money," Kelly said.

Some analysts say that overbooking offers benefits to consumers because it allows airlines to sell extra tickets, which drives down prices. Southwest will become the second U.S. airline, along with JetBlue, that doesn't overbook flights. Its announcement came on the same day that United said it had reduced overbookings in the aftermath of the Dao incident. But United doesn't plan to end the practice.

Kelly's discussion about overbookings came during a call in which Southwest reported first-quarter net income of $351 million, down 31.6% year-over year. Operating revenue jumped 1.2%, to $4.88 billion, missing analyst expectations by $40 million, according to the website Seeking Alpha. Operating expenses climbed 8.8%, due mainly to upticks in labor costs and fuel prices.

Average one-way Southwest fares dropped 2.6% year-over-year, to $149.78.

Excluding special items, Southwest reported earnings per share of 61 cents, missing analyst expectations by 2 cents.

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