Right Flight, Right Time, Right Strategy: Cashing In On Oversold Flights

To me, scoring a travel voucher from an airline is like winning a lottery.  This past week, I secured a $500 travel voucher from United for taking a "bump" on an oversold flight (taking a "bump" refers to giving up your seat on an overbooked flight to accommodate another ticketed passenger and instead taking a later flight).  I was able to arrive at my final destination less than an hour later than originally scheduled, allowing me to proceed with my day as planned.

Here's my story and some tips to help you formulate your own strategy to try to score lucrative travel vouchers for taking a voluntary bump when flying:

1. Travel During Rush Hour on Business Routes: I was booked on an early Monday morning flight from Newark, NJ to Washington, DC.  It was painful to wake up early for a 6:30am flight, but it ended up being worth it.  Monday morning is a prime time for business travelers to begin their travel week.  Thursday evenings are often popular for return travel for management consultants, so that is generally another business travel day. Generally, business obligations for passengers mean they will have less flexible travel plans.
2. Fly Early: This is important for two reasons... Flying early in the morning means there is less of a chance that passengers on your flights will be dependent on a connecting flight to make it onto your flight.  That means it will be less likely that there will be passengers who've booked your flight and miss it.  Secondly, flying early in the morning gives you more options to take later flights the same day if you do in fact accept a voluntary bump, and more of a buffer to allow you to still meet your personal or business obligations.
3. Always Check-In (Again) at the Airport: Airlines may each have different protocols for how to volunteer for a bump.  If you're not sure what they are, ask an agent at check-in.  For United, if a flight is oversold, the first line of defense is asking for potential volunteers at the check-in kiosks at the airport.  Even though I check-in online 24 hours prior to departure time, I always print a paper boarding pass at the airport kiosk so I can register as a volunteer (and avoid being dependent on my phone's battery) if the flight is oversold.  It's important to note that you're simply expressing interest, not committing to give up your seat.  I always opt-in as a volunteer so I can at least learn what compensation is being offered, which is often significantly higher than what is indicated via the check-in kiosk.
4. Don't Check A Bag: It's easier logistically for the airline to bump someone from a flight if their luggage isn't always on board.  Sometimes there are multiple volunteers vying for the coveted travel voucher, so not having checked luggage can give you an edge.
5. Make Your Presence Known: Proceed directly to the boarding area for your flight and notify the gate agent that you've volunteered and are willing to explore giving up your seat if needed.  Be polite and seem easy going.  If there are multiple volunteers, you'll want the gate agent to know you're around before others show up.  Stay near the boarding area so that agent can speak with you if needed.  Don't pester the agent; she or he will outreach you if your seat is needed.  Often, seats will become available and no volunteers will be needed.
6. Have a Plan B in Advance: As soon as I new my EWR to DCA flight was oversold and I got myself on the volunteer list, I fired up the United app and explored options.  In the case of DC, there are two airports to consider since both are serviced by decent mass transit options.  I saw that there were several flights into DCA (where I was originally headed) and several more into Dulles (IAD) which would add another 30 minutes of ground transit to my trip.  I also noticed that a 6am departure into IAD was delayed due to maintenance and would be leaving 30 min later than my original flight.
7. Keep Exploring Alternatives:  My seat was indeed needed an due to lack of volunteers I was offered a $500 United travel certificate toward a future flight.  The agent confirmed a seat for me on a 1pm departure into my original arrival airport of DCA.  I asked about nearby Dulles Airport (IAD) and she was able to confirm a seat for me in first class on a 9:30am departure.  I accepted that so we could get that ticketed.  I then asked if she could place me on the standby list for an earlier 9am, currently oversold flight into my original destination airport of DCA, which she did.  I thanked her and then proceeded on my own to the 6am departure to IAD (that I'd researched earlier) now delayed to 7:15am.  I approached the gate agent to inquire about listing for a standby seat on that flight, which would allow me to get into Washington, DC only 45 min or so later than I'd originally planned, plus some additional ground transit time.  Due to the delay, the passengers the agent was assisting before me changed their travel plans and vacated their seats.  The agent was able to confirm me on the flight and I was a happy camper!

$5 shuttle bus w/ Wi-Fi connects Washington Dulles airport with the DC Metro

So, in summary, by planning flights during busy travel times, allowing myself enough time to still get where I needed to be, doing some research on my own, and exploring alternate options real-time, I ended up with a $500 United travel voucher and arrived at my final destination only an hour later than scheduled.  The stars aligned in my case, but it's not always so easy.  That said, you can increase your likelihood of a favorable bump if you have the right strategy.

What strategies do you use when trying to earn compensation for oversold flights?

Unused Points and Miles Can Be Big Business for Hotels & Airlines

United's MileagePlus program drives billions in revenue

There's a lot of chatter in the points and mile world regarding maximizing the value of the benefits we accrue from travel.  There are two primary actions that can cause the value of your miles and points to go to waste: expired miles/ points and frequent travel program mile/point devaluation (when the travel provider raises point levels required for the same type of redemption).  The first is in your control while the latter is subject to decisions by the loyalty program management teams.  In both cases, loyalty program member behavior and executive management decisions can have a big impact on travel provider profits, to the tune of billions of dollars.

To illustrate the magnitude of the impact that loyalty program point expiration and devaluations can have, let's look at an example form United Airline's 2013 annual report:

When you fly on United, a portion of the price you pay is put aside in a deferred revenue account.  Put simply, this means that rather than treating it that portion of the ticket price as revenue when you fly your ticketed flight, part of the revenue from the ticket has to be put aside to cover the future benefit United needs to deliver to you when you redeem the miles you earned from that flight.  As of the end of 2013, United had $4.9 billion in deferred revenue put aside in account for future redemption of Mileage Plus miles.

Monitor your miles & points online so they don't expire

United also discloses that they assume that a certain percentage of miles earned will expire before used.  As of the end of 2013, United assumed that 20% of miles would go unused.  For every one percent of total earned miles that go unused, United banks an additional $57 million in profits.  That means that because on average, those of us that have earned United MileagePlus miles let 20% of them go unused/ expired, United is able to recognize an additional $1.1 billion of profit from their loyalty program (note: this doesn't represent annual profit, but full benefit over the life of the current pool of outstanding earned miles).  That also means that if United increases the miles required to redeem the same award by 20%, they would also in theory generate $1.1 billion of additional profit.

United's 2013 Annual Report: Deferred revenue from frequent flyer miles & mileage expiration assumption

So, the bottom line is that mileage redemption, or lack of redemption, can be big business for airlines and hotels.  Make sure you do what you can so that 100% of the benefit of your points and miles earned ends up in your wallet rather than in the earnings reports of airlines and hotel.  Don't let your accrued points and miles end up in that 20% pool that goes unused before expiration.