Delta Auctions Off Flight Bumps To Lowest Bidders

A reader over at Marginal Revolution spotted Delta’s new system where when you check in at the kiosk it asks you to bid on what it would cost to get you to volunteer your seat. Below the entry box it says, “Delta accepts lower bids first.” Genius!

With this method the airline doesn’t have to guess what might be the lowest bid passengers might accept and then try to auction it off. Let the travelers underbid each other and do the hard work for you.

Not only does it give Delta more information, it takes information away from flyers. They won’t be able to gauge the supply, and their individual value as a participant, as well because there’s likely to be that scene where they call out the bump seat offer over the intercom and everyone looks around to see if anyone is going to take it.

Putting “Delta accepts lower bids first” primes flyers to bid low so that they have a better chance of getting a voucher.

One would hope that the airline would pass on the savings from the increased efficiencies to the passengers in the form of cheaper fares. More likely is that it will be used to squeeze in more overbooking.

Going Once, Going Twice, Not Going for $150! [Marginal Revolution] (Thanks to Mick!)

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  1. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    we used to have FAA rules about this, didn’t we? (Serious question)

  2. spamtasticus says:

    I’m guessing the poor dog lost the bid

  3. ARP says:

    It is genius on their part, I’ll admit. But I’m not sure I would change much. I would enter a number that is right for me. If someone underbids me, they can get bumped. I’m sure there will be some “the Price is Right” moments, where someone underbids a person by $1, but I just don’t get too worked up over that stuff. The worst case is that I fly when I’m supposed to.

    Would this impact compensation for involuntary bumping? If so, then I’m angry.

    • Necoras says:

      Why would anyone volunteer to fly tomorrow for $1? I’m fine missing a flight, but only if it’s worth my time. If they want to pay me a few hundred dollars to miss my flight, fine. If someone else wants to miss theirs for $50, more power to them. They get paid a pittance and I get to go where I paid to in the first place.

      • shufflemoomin says:

        They’re not paying you anything. They’re giving you a voucher towards future travel.

      • trentblase says:

        I’ve had circumstances where I could have used an extra day wherever but the airline wanted an ungodly ticket change fee. If that ever happened under this system, I’d pop in a 0.

        • longdvsn says:

          and your new flight would be for 6 hours later or something on the same day…you’d be stuck in the airport (because you already went through the security line and don’t want to wait in line to be groped again if you leave). You’ll get zero for the bump with free headaches thrown in.

          When you put in that bid, they don’t tell you what your options are should they bump you for it. They’d almost certainly rebook you automatically on the next available flight to your destination – regardless of how inconvenient it might be.

      • Kibit says:

        The previous poster was referring to a bidding technique on the Price is Right game show where a contestant, typically the last one to bid will place a bid of either $1 over or under the highest or lowest bidder.

  4. Tim says:

    Hopefully, this will discourage passengers from participating. I know I’d rather fly on the flight I paid for than get bumped for $2.

    If passengers don’t participate, it will massively increase the costs for Delta. They’d have to go through the federally-mandated process of involuntary bumping, which is very expensive for the airline.

    • Liam Kinkaid says:

      Or they’d just offer voluntary bumps starting at $200 at the gate. Ma and Pa Kettle will jump for that.

    • nbs2 says:

      I suspect you will see a lot of folks entering the price of their tickets as their bump value – leading to more complaints that they were bumped because they had lower fares. I remember I was making a mileage run when one of those hurricanes hit Houston and nailed Continental’s operations. I ended up with a $500 voucher even though I was on a $180 ticket. Plus, it made my turnaround perfectly timed (50m). A sweet deal like that would likely never happen under the Delta system, as I wouldn’t have thought the bump worth more than a few hundred – let alone $500.

  5. Bativac says:

    So if I put in, say, $10k, then am I less likely to get bumped than the guy who puts in fifty bucks? Wouldn’t that spur passengers to put in higher and higher amounts to try to keep from getting bumped, potentially increasing the amount Delta pays out in vouchers?

    (I would never fly Delta anyway. I’m just curious.)

    • ARP says:

      I sort of made the same argument. I’m not going to underbid. I’m going to bid what I think I want. If it’s under the Federal amounts, so be it. If not, they’d have to give me the mandated amounts.

    • edman007 says:

      Well chances are you just wouldn’t get bumped, it’s hard to get everyone on the plane to agree to $10k, some will always accept just slightly over the cost of their ticket. However if it did come to it they still don’t have to do that, they can do the federally mandated “involuntary” bump, it’s more expensive then just getting you to take some reasonable bid, but it isn’t $10k expensive.

    • balthisar says:

      There’s a $400 limit.

    • Murph1908 says:

      No.

      In any case, you will only get bumped if there are no volunteers. So putting in a high value simply is doing the same thing as not volunteering.

      In acutality, putting in a value of $10k might make you MORE likely to get involuntarily bumped. If there are no volunteers, the airline might use your 10k reques that as reasoining that you are capable of accomodating a later flight, and choose you. Then, they wouldn’t give you 10k, but the maximum they are required to by law.

    • pythonspam says:

      I would imagine you have to scan your ticket or something so they know what your fare classification is and set the maximum voucher amount for what delta got paid for your ticket.

  6. Franklin Comes Alive! says:

    Can we get some sort of anti-pet picture with every Delta story from now on? Maybe a Ghostbusters logo-like thing with a picture of a German Shepard in the middle?

  7. dush says:

    So, everyone just put in $1,000,000 and see what happens.

  8. ealexand says:

    This made me so mad when i saw it on my flight home from the holidays last week. It’s $200 goo enough? That seemed to be the going rate. I’ll bet people go as low as $50. Grrr

    • Back to waiting, but I did get a cute dragon ear cuff says:

      Why does it make you mad if someone values their time less than you value yours?

      If it is worth $50 for someone else to sit around an airport for a few hours, that is what it is worth to them. If your time is more valuable, well, your time is more valuable.

      It is called the free market.

      • YokoOhNo says:

        I agree. Fortunately for us, there are millions of people in the US willing to work for less than minimum wage, work in unsafe conditions and would happily allow their 8 year old child work in the fields. Unfortunately, the liberals instituted a minimum wage law, child labor laws and a safe working environment thereby depriving those who would work for $3/hour in a cesspool (with no protection) from the free market!

        Also, i can’t wait until the free market allows monopolies…you know, like China and India.

        On second thought, I’m glad we don’t operate in a free market.

        • YokoOhNo says:

          I meant “the freedom hating liberals”…sorry.

          • Back to waiting, but I did get a cute dragon ear cuff says:

            “The freedom hating liberals” also made me install a $10,000 ADA compliant bathroom in my store that no one has used in 7 years because the existing bathrooms were 3-4″ off ADA specs.

            There are some places where a completely free market works, and some that need a little nudge. Deciding how much my time is worth to sit in an airport for a few extra hours seems like it would be one case. Since I am VOLUNTARILY naming my price, I can decide if it is worth more or less that what the FAA sets for INVOLUNTARY bumps.

            • Nick1693 says:

              ADA was signed into law by George H.W. Bush and the amendments to ADA were signed into law by George W. Bush. Since neither vetoed the laws, one can assume they supported it.

            • YokoOhNo says:

              Sounds like the free market didn’t work for you there. You could have had the LL agree to provide you with ADA compliant bathrooms as part of your private conrtact. $10,000 to install one ADA compliant bathroom is too much, the free market beat you down on that one. (and I’m speaking as a retail union GC). Viva la Free Market (if we had one).

              Are you also against regulations relating to the minimum conditions that must exist before an airline becomes responsible for your lodging (due to delays), lost baggage and bumping you with NO compensation? Why should they be made to compensate you at all?!

              Now, can we begin the effort to repeal the child labor laws and OSHA regulations that have, literally, cost this country BILLIONS of dollars!?!?!

  9. blinky says:

    if it makes it less likely to be involuntarily bumped, that’s cool.

  10. Back to waiting, but I did get a cute dragon ear cuff says:

    Makes sense to me. If I am flying down to Florida on an early bird flight to make a 9:30 meeting for a $200,000 project, it would have to be a VERY large sum to get me to voluntarily get bumped. The limited FAA reimbursement does not even come close.

    However, if I am just going down for a long weekend and can pay for a really nice dinner and a Grade A golf round instead of playing at a dog track and dinner at Five Guys AND sit around the airport drinking for a couple of hours, a bid of $150-200 makes a lot of sense.

  11. mszabo says:

    I actually don’t see a problem with this, It sounds good to me. I’ll put in my $20K (for a personal trip) and probably $7K for a business trip (assuming the money doesn’t go back to my workplace) as my honest answers and most likely never get bumped again. Sounds like it will be fewer bumps for me and less waiting around until they find some people to volunteer.

    • Megalomania says:

      You’re forgetting that the amount they’ll pay is capped by the FAA regulations regarding non-voluntary bumps; if no one will get bumped voluntarily for less than $7,000, they’ll choose someone as a non-voluntary sacrifice and pay them the $500 or whatever.

      • bror says:

        So, that’s great?!? Delta would still have to bump people, but involuntarily and pay much more and in the current system? I really can’t see what wrong with this setup- isn’t your main preference to actually get on the plane?

        • Murph1908 says:

          Except as I suggested above, putting in a value might target you for the involuntary bump at the cap. By saying you are willing to be bumped for a price, you might be the first picked for an involuntary under the assumption that you can accomodate a later flight.

  12. hypochondriac says:

    Travel voucher? Didn’t you used to get cash for getting bumped?

    • Liam Kinkaid says:

      Voluntary bumps (like this one) are almost always paid in travel vouchers because it’s cheaper for the airline that way. Involuntary bumps, which happen when the flight is oversold and not enough people take the voluntary bumps, are supposed to be paid in cash (check) by the airline. I believe the amounts are mandated by the FAA.

  13. larrymac thinks testing should have occurred says:

    I wonder if they still consider other factors, such as how easy it is to get the bumpee to their final destination, or if they’ll need to supply a hotel voucher too. Say I’m flying from Richmond to Louisville, and John Doe is flying from Richmond to Chicago. The flight we’re both on has a connection in Cleveland, but I can only get to Lousiville via that connection, while John can get to Chicago on any number of other flights, maybe even a direct flight that leaves in an hour. If I bid $200, and John bids $250, the airline might still come out ahead if they bump John.

  14. Liam Kinkaid says:

    There’s not a lot of info at the original article, but I’m willing to bet that when you check in, the kiosk tells you that your flight may be oversold and asks if you’d be willing to volunteer. Continental does it like this at the kiosks, but doesn’t get into the bidding. With Delta, if you choose to volunteer, they take your bid and let you know at the gate. Your bid is only an offer, so if everyone puts in $10K as their offer, Delta won’t accept any of them. This constitutes a refusal of current offers. Then they’ll offer voluntary bumps at the gate starting at the lowest figure they think they can sell. They continue upping the price until they have the correct number of volunteers or they get near (or slightly over) the amount an involuntary bump would cost. Then they go by whatever criteria they have in place for choosing who to involuntarily bump.

    With the exception of the bidding at the kiosk, I’m pretty sure this is SOP for just about all airlines when dealing with an overbooked situation.

  15. rahntwo says:

    Can I bid a drawing of a spider?

  16. udesigns says:

    JetBlue does not overbook flights. Yet another reason I choose them over anyone else.

  17. c152driver says:

    This is a pretty ingenious idea on Delta’s part, but the devil might be in the details.

    When is the next available flight? I’ve seen cases where they’re looking for volunteers and the next open seat isn’t until the following afternoon. In that case, I’d need to bid a lot higher. I don’t imagine the kiosk displays that information. If I bid a relatively low amount and later find out I won’t be able to leave until the following day with an unexpected connection in North Upchuck, will I be held to my bid?

    • Mom says:

      This^. The last couple of times an airline tried to get me to take a voluntary bump, they couldn’t guarantee when I’d actually get onto a flight. I’m not that stupid…

  18. sirwired says:

    I have to say, this is genius on their part and would probably make oversolds go much faster at the gate. I don’t see any consumer problem here…

  19. Awesome McAwesomeness says:

    Mine will always read, “$10,000.” Always.

  20. castlecraver says:

    Surely you aren’t required to offer a bid, right?

    I can’t wait for the first person to fat-finger a bid, have it accepted, lose his seat for peanuts and be get a “nyah nyah, no takebacks” response from Delta.

  21. dcarrington01 says:

    How about selling the same amount of tickets as seats that are on the plane, problem solved and you don’t have to pay anyone off. That makes sense, I digress, bring on the greed…..

    • RvLeshrac says:

      Stop telling them how to run their business! What a socialist!

      There’s nothing wrong with them overselling a flight and causing people to miss priceless life events and vital business meetings, while paying out peanuts.

      I mean, if people don’t want to get bumped, they can learn to fly, buy a plane, and use THAT to get to their destination.

      • YokoOhNo says:

        this…or they could even start a competing airline if unable to take flying lessons and buy a plane.

    • YokoOhNo says:

      that is NOT how the free market economy works. that method, while being expected & honorable, is not how a corporation increases the value to their shareholders….profit at any moral and ethical cost is the name of the game now.

  22. dabarak says:

    Back in 1996, I volunteered to be bumped from a flight (I don’t remember the airline), and for my efforts I got a bottle of wine, a round-trip travel voucher, and a bump up to first class on my new flight. Ah, the good old days.

    • AntiNorm says:

      How is this more efficient? When you get bumped, they have to do more than just issue you a voucher and rebook your one flight. If your flight is to a hub like Atlanta, they’ll have to not only rebook you to Atlanta or another hub, they will most likely have to rebook you on another flight from the hub to your final destination. If the flight they rebook you on leaves from a different airport than the one you’re volunteering at (this has happened to me), they’ll have to hook you up with a cab driver and give you a voucher for cab fare. Hotel vouchers may be involved if there’s an unexpected overnight stay.

      It seems like it would be easier to just do it the way they do it now, with the gate agents announcing an oversold situation, and asking for volunteers to take a different flight. I was bumped this way a few weeks ago, and I volunteered knowing that a voucher would be involved. The amount wasn’t discussed until the voucher was handed to me; it ended up being the standard $400. This is about average, and it’s enough to make me come back the next time they need volunteers. The gate agent handled everything that needed to be done, including having my bags pulled off the original flight, within a matter of a few minutes.

  23. packy says:

    I love the comment made by Chris Durnell on the site:

    “But is there a way to add additional fees once Delta accepts your bid? I may sell my seat for only $400, but I still want my Inconvenience Fee of $5 tacked on, my Already at Airport Fee of $10, and my Service Charge of $2.”

  24. Cry Havoc says:

    Carl Weathers is not pleased…

  25. JustMyPOV says:

    I used to love to play the bumping game, much to the embarrassment of my three boys. Coming back to the States from Hawail years ago, our family got bumped twice and made $2000. I had to pass on the third bump after my kids started a revolt. Six hours at the airport was enough for them. It did pay for a couple more trips though.

  26. stevied says:

    $100.000

    My time away my family is going to cost you.

  27. daemonaquila says:

    Easy – just educate people to enter $1,000,000,000 every time… and don’t fly Delta in the first place.

  28. vastrightwing says:

    I hate the experience of flying these days anyway, so I’ll opt out of the process. If forced to play, I’ll simply enter the maximum bid. I never want to be bumped, ever. So for those of you who want to get bumped, Thank you!

  29. shufflemoomin says:

    Uh, how is this a good idea? Everyone will just put in a ridiculously high bid to ensure they’re not the ones bumped from the flight. I know that’s what I’d do. If I didn’t want to travel and didn’t mind going later, why would I have booked the flight I’m trying to get on?

  30. esk42 says:

    Well, just to be devil’s advocate – this would certainly cut down on delays if they don’t have to go through the theater of asking who would be bumped at each rate while passengers look around shiftily.

  31. SalesGeek says:

    How hard would it be to:

    1) Set up a quick auction site to flag overbooked flights.
    2) Cook up a couple of iPhone/Blackberry/Android apps that allows passengers to share their bids with other travelers

    Technically this stuff is trivial. It is literally a few months of work, tops and would make a good project for a handful of Computer Science majors looking for a good Senior Design project.

    The Internet has ways of evening this out. I’ll bet on six months until someone sets this up so that the traveling public can have a sporting chance to game this system.

  32. Rocket80 says:

    I think this is a great idea, doesn’t bother me at all. At the time I’ll simply figure out what it would be worth to me to miss the flight and input that number. This is in no way bad for the consumer.

  33. gman863 says:

    I have to give Delta props for creativity on this. It’s basically “Priceline” in reverse.

  34. maynurd says:

    Delta routinely overbooks flights operating on the belief that a certain amount of people booked on a flight will not show up.
    Once you enter an amount, are you obligated in any way to give up your seat if they call you on your bid?

  35. dilbert69 says:

    This makes sense to me. I’ve often though the airline’s initial offer too sweet. My wife and I were flying back from Maui to Oakland when the gate agent announced that they needed two volunteers, and those volunteers would get a night in a hotel, guaranteed seats on the same flight the next day, and two free round-trip tickets back to Maui good for one year. I grabbed her boarding pass and leaped over people to get to the podium. We wound up renting a car at our own expense so we could enjoy our last day in Maui, but other than that, it was a super-sweet deal. The hotel, though not as nice as a resort, wasn’t even that bad.

  36. livingthedreamrtw says:

    Airline industry screws up and over books, makes customers take the short end of the stick, again. If that ever happens to me, I’m going to put $10,000 just to piss someone off.