[acalderaro]

After reading, the author makes some valid points, and also some not so valid points.

one of the particularly valid points is that airlines shouldn't be allowed to overbook. By offsetting this with no-refund policies, it seems like a win-win negotiation. It may not be "free market," but it makes logistical sense as it takes resources to re-route passengers and deal with the negative PR from booting passengers.

One of the not-so-valid points is the author's statement that "It makes no sense to allow airlines to charge an astronomical fare just because a flight is nearly full, and a dirt-cheap fare for an advance booking." The fundamental idea of supply and demand is that when supply is high and demand is low (when a flight is immediately listed), prices are lower than they would be when supply is low and demand is high (last minute interest in a semi-full flight). While most economic models have varying degrees of subjectivity, this is not one of them.

Ideologies are brilliant for discussion, but in practice, they fail to capture every possible variable and account for the impact when arriving at an outcome. Some amount of procedure (i.e. regulation) improves operations and efficacy. By the same token, too much regulation stifles operations.

Transportation is less of "creative" business, and more of a "procedural" business. As such, it can benefit from regulated procedures. The key is not to hide behind a wall of ignorance and ideology, but instead try to find the procedures that optimize the output for consumers and businesses.

[Johnny555]

one of the particularly valid points is that airlines shouldn't be allowed to overbook. By offsetting this with no-refund policies, it seems like a win-win negotiation

Nearly every industry overbooks (airlines, hotels, even restaurants) and it saves consumers money in the long run. The problem is that when it happens, the airline shouldn't be allowed to involuntarily deny boarding to anyone, they should be required to offer a high enough reward that someone takes it voluntarily.

[mikeash]

I see no problem with overbooking, as long as they're transparent about it and compensate people. Overbooking is common in many industries. The article holds up hotels and car rental agencies as examples of how it's done better, but those overbook too. Car rental agencies in particular don't really know how many cars they'll have available at any given time because their contracts are so flexible, so your "reservation" is really just a planning tool so they can try to shuffle inventory around. (The TV documentary series "Seinfeld" did an episode on this.)

[xapata]

Overbooking and cancellation fees allows the airline to charge lower fares to folks who buy early and don't cancel. Perhaps the author makes a good point that airlines don't leave enough slack in the system to handle mistakes. I'm not sure if I agree. I fly quite frequently, and I rarely experience any non-weather delays. When there are delays, the airlines are very kind to me. Maybe because I fly frequently, but that's my experience. Regardless, the easy solution to the problem of not enough slack is to fine the airlines more for non-weather delays. Don't tell them how to solve the problem, just make it worth their while. The market will sort out whether it's better to leave some empty seats or to give more refunds.