Monday, October 1, 2012


(Very sorry. By mistake, published  my draft version.  Here is the final version.)
Airline companies almost always overbook their flights whenever they can. Why? Because they know that statistically around 15% of the passengers who have confirmed reservations do not show up for their flights.

Airline companies know this and an empty seat is money lost so they overbook. Sometimes overbooking can backfire on airline companies…like whenever more passengers with confirmed reservations show up than anticipated and there aren’t enough seats on the plane for everyone.

Whenever this situation occurs, the airlines will make an announcement at the gate asking if any passengers would like to voluntarily give up their seat and take the next flight. The airline will offer incentives for the passenger(s) who volunteer for ‘bumping’.

Bumping (or getting bumped) is when you voluntarily give up your seat on the flight to take a later flight with the incentives.

The average incentive is a one class upgrade to business class or first class on the next available flight AND one free roundtrip ticket from anywhere to anywhere that the airline will fly domestically. A pretty good incentive.

Some airlines are cheapskates. They will start with a paltry $50 voucher to be used for future travel on their airline. However the passengers know better and no one will accept such a cheap offer.

I know a frequent commentor on this blog who volunteers for bumping all the time. I mean every…single…time he flies! When he checks in at the airport, he voluntarily tells the airline clerk “if you’re overbooked for this flight and need to bump someone, you can call me first”.

Why I am writing about this topic now?

The practice of bumping has come to educational institutions also. Now a famous university is paying students not to enroll. M.I.T. (Massachusetts Institute of Technology) admits 400 students into their MBA program every year. They usually send admission letters to more students than the actual seats that are available (i.e. overbooking or overaccepting). This is due to a few (accepted/admitted) students not showing up for various reasons such as getting admitted to another school, losing interest in pursuing an MBA, getting a job, etc.

This year more than 400 students showed up at MIT. Similar to airline companies offering incentives to passengers who want to be bumped, MIT is offering cash incentives to those students who are willing to wait until next year.

MIT started with low cheapskate offers (like certain airlines) and of course they had very few takers. Eventually, MIT got enough volunteers who were willing to enroll next year. MIT ended up offering $20,000 to each student. This money will be applied towards their tuition fees next year. The tuition cost for the MIT MBA program is $58,000 per year. A 34% discount is not bad. Not bad at all.


  1. I can partly understand that business strategy in the airline industry but I must say I would think it is shameful of an institute like MIT do that call itself an educational institute..

    That's my two pennies on it...

  2. Thanks for your comments Aparna. It is unusual. I agree with you. Look at it this way. At least, they are honoring their commitment and giving incentives to those who are willing to wait until next year to enroll.

  3. Gee, I wonder who you are talking about when you say that you know someone who gets bumped all the time at the airport.
    Yes, it’s true that I’m first in line for bumping every flight I take.
    I also volunteer my seat even if a BUMP list hasn’t been started yet.
    WHY? Because I’m never in a rush to get anywhere.

    So if my SF to Vegas flight departs at 10am and arrives at 11:30am – and I hear the word OVERBOOKED...well then...No problem, let me help.
    I’ll take the BUMP, so now I’m on the noon flight to Vegas that gets me there at 1:30pm
    I'll lose 2 hours in Vegas...but I’m traveling Business Class or First Class AND I have 1 free ticket to go anywhere I want (good for 1 year).

    Longer flights (and connecting flights) are even better.
    Atlanta to San Jose (via Portland) – 2 flights + layover = 9 hour journey.
    Took a BUMP and was placed on a later direct flight from Atlanta to SF (which landed 2 hours before my original flight).
    Did I mention FIRST CLASS? Oh by the way – I also got a free ticket good for 1 year.

    Two final points:
    1 - I have never taken a cash incentive BUMP. To me…that’s wack! Give me the class upgrade and a free ticket.
    2 - Now I know someone on this BLOG (wink, wink) who turned down an INTERNATIONAL BUMP! Make that TWO INTERNATIONAL BUMPS! WHY?

    If college/university bumping was around when I went to school, I would have never graduated.
    It would have been BUMP, year off, BUMP, year off, BUMP, year off...repeat the loop while I party in St. Thomas.

  4. I wish my alma mater would also come up with a BUMP plan for the US economy.
    I'm in over my (bald) head.

    Ben Bernanke

  5. Thanks for your comments The Cagey Bee. You are smart. Unless there is an important assignment, nothing wrong in departing by the next flight in first class and taking a round trip free ticket.

    Yes, I was the idiot who did not take the International Bump. The offer was next flight in first class and an international free ticket in first class (anywhere to anywhere in the world).

    We did not take. We regret for not taking a split second decision when we were already seated in the plane.

  6. Thanks for your comments Ben. Your alma mater? University of Mars? Was Otis Sistrunk your classmate?

  7. I have heard about the airline's offering incentives ('bumping' is a new word for me!). MIT news is news to me! It is difficult to digest! They offer incentives to waste one year!

  8. Thanks for your comments Sandhnya. It is to compensate for their monetary loss. For example, some people have quit their jobs to pursue MBA program. Some have rented apartments stay.

  9. I was ware of the airline bumping, but this tradition gradually getting into education is very shameful.

  10. Thanks for your comments Revathi. The University wants to take of the students who have lost one year.

  11. I think its a good strategy for airlines, except in situations when no one takes up the offer!

    I don't have a good opinion about professional education (esp. MBA) anywhere. So, can't comment on the second aspect of your post.

    Destination Infinity

  12. Thanks for your comments Rajesh. Believe me. When they give incentives like travel by first class in the next flight and a free round trip ticket, many people will take it.

  13. For airlines, its good, but for educational institue, for a student one year must be more valuable than money..atleast i think so..

  14. I did';t know about 'bumping'.

    I will volunteer next time I travel. Fist class is luring me!

  15. I enjoyed reading this as this is something new to me... I was not aware about this bumping thing!!

    But it is a shame to see the education system stooping down to such levels and makes us question if our future is in safe hands or not

  16. Thanks for your comments Renu. So you think $20,000 is very less. May be will ask them to raise the offer.

  17. Thanks for your comments Veena. I am glad you liked this post.

  18. Thanks for your comments Aparna. Be careful. Ask what time is the next flight they are going to book you. I don't want you to spend a night in a hotel in an unknown place.

  19. Thanks for your comments ME. I don't if the airlines in India do this bumping thing.

  20. With the rising costs of MBA, I would take up that offer any day.

  21. Nice to have an awareness like this.But time is more precious than incentives. If possible pl. read mine also.

  22. Thanks for your comments Swati. I would take up the offer too (if I get admitted to MIT).

  23. Thanks for your comments Sarala. And, welcome to my blog. Sure, I will visit your blog soon.

    Sarala, please visit here as often as you can. Thanks.

  24. Both the deals are good if there are people to take it , and people who are there to compensate them handsomely, why not, I would say go for it!

  25. Thanks for your comments rama. I am on your side.

  26. This is something new to me and never knew about it.
    So I am willing to be bumped the next time whenever and wherever it happens :-)

  27. Thanks for your comments Haddock. And, welcome to my blog. I don't know if the airline companies in your country offer this deal or not. Please check with them.

    Haddock, please visit here as often as you can. Thanks.