Seat Spoilage Management

Carrier seats are a perishable inventory. Once a departure leaves, opportunity to gain revenue from the empty seats is lost. As we have seen in the previous modules, maximum revenue gains can be captured from a departure if all seats are sold and all demand for full-fare seats is met. Booking class assignment based on economic value and optimal seat allocation can lead to large revenue gains. However, carrier seats can also be "spoiled" or depart empty due to passengers who do not show up to board. Carriers need to take steps to avoid or minimise spoilage in order to maximise revenues. In this module, we begin by defining spoilage, explaining why carriers need to overbook, and discussing some implications of this practice. The second section looks at how carriers actually determine optimal overbooking levels to compensate for passenger "no-shows." The final section introduces some other overbooking measures and considerations including planning for pre-departure cancellations and multi-compartment upgrading.