Name Your Own Price for Not Flying!: Delta Experiments with Reverse Auction Kiosks for Passengers

Our friends at Newsweek’s Budget Travel have highlighted a very interesting tactic that Delta is experimenting with at several airports to determine which passengers should be bumped from flights based on their own “price” for taking a later flight – namely reverse auctions! See the complete story below: 

Delta is turning the flight-bumping game into a reverse auction – This Just In – Budget Travel

And here’s a photo taken by an intrepid traveler of the kiosk screen Delta passengers can enter their “bid” for being voluntarily bumped.

This is a very interesting application of the reverse auction concept – and it helps the airline AND the passenger by giving each some level of control in what heretofore has been a mysterious process between the gate agent and his/her terminal. Kudos to Delta for trying this – hope it goes widespread in the industry (of course, it would be better if no one was bumped off flights at all, but hey, that’s not air travel in 2011). We’ve grown used to the Priceline.com concept of naming your own price for air travel (which works very, very well for both the passengers and the airlines – which seeks to sell unsold seats in this spot market which otherwise might very well fly empty – and with no revenue!). Now, passengers can name their own price again – for not flying! This could go a long way towards having a real-time market mechanism solve a perennial problem in today’s world of overbooked flights that government regulations have failed to do. Plus, it puts the customer – the passenger – in charge, which is a positive move for the airline! Let’s hope this is a best practice that will be adopted across the airline industry.

BIOGRAPHY

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:

• management concepts (http://toptenmanagement.blogspot.com/)

• book reviews (http://wyld-about-books.blogspot.com/) and

• international foods (http://wyld-about-food.blogspot.com/).