Why Airline Vouchers are a Bad Deal: Fuller Planes in Q3

Minutes before you're to take off for [your favorite city] the gate attendant comes on the P.A. announcing that the flight is overbooked and the airline is offering vouchers, a seat on the next flight out, and a foot rub all the way to [your favorite city] if you voluntarily give up your assigned seat.

As airlines report their Q3 results, the data reinforce an important rule oft repeated by Condé Nast Traveler Consumer News Editor Wendy Perrin: If the airline offers vouchers or cash to give up a confirmed seat on an oversold flight, don't take it!

Even though fewer passengers are flying, planes are fuller than ever because flights have been slashed and fewer seats are available. As a result, load factor, or the percentage of seats filled by paying customers, is much higher this year than last, and is expected to remain so through the holiday season, reports The Houston Chronicle.

Load factor for select airlines, Q3 2009:

American Airlines: 83.9
Delta / Northwest: 85.8
Continental 85.8
United Airlines: 85.8
US Airways: 84.0
Southwest: 79.6
Source: The Houston Chronicle

Now, load factors have all sorts of implications for the airline industry—revenue, profits, ticket prices, and flight schedules—all of which we’ll leave to the financial folks to analyze. (And a high load factor certainly doesn't mean that an airline is in the black. Consider, that Southwest’s Q3 load factor was up 8 percentage points from that recorded in the same period 2008, but the airline still lost $16 million last quarter. Likewise, American Airlines load factor rose 1.8 percentage points to 83.9 percent from 82.2 percent in Q3 2008, but they still lost $359 million last quarter.)  

But when it comes to load factor’s bottom line for us consumers, the equation is simple: Fewer planes are flying and they're flying fuller than ever, so if your flight is overbooked, chances are the next flight out is too.