United Airlines and Orion

As you might have noticed, I recently went on my Honeymoon. We decided to take our chances upgrading to 1st class with frequent flyer miles and not purchase the upgrade up-front, to save some cash. Fortunately we had enough points (30k), which we recieved for some travel earlier in the year as well as a gift. We applied the miles to our itinerary about three weeks prior to the big day.

So, I expected that if seats were available (and that I knew I could check that much in today's Internet age) we would land them. Wrong. Miles upgrades are treated very differently than cash, and we got waitlisted. Waitlisted until we got to the terminal and then if was clear that we were in a game. About twenty minutes into our wait (at the terminal), it became clear there was a lot of seat shuffling, and the counter attendant actually offered $400 for people to move off of our flight. It was clear they had overbooked, and fortunately for us, quite motivated to free two seats in 1st class so fill ours. They did, which was a great thing and I'm very thankful.

But that got me thinking. What happened, and what an interesting business this is. I know the airlines have been deregulated since the 1970's, but I'm really surprised the level of sophistication that surrounds the sale of seats, at it just smells funny. Turns out, Orion is the system making these decisions (in my case, as I flew United Airlines) and I really don't have any person to blame for the confusion (or frustration in the case of my waitlisted-1st class seats). Orion is the system measures demand and compares competitors rates, as well as performs all of the time factoring.

Take for example the last minute bookers. The airlines like these folks because they usually pay a premium for booking late and if kept happy can be loyal customers. So the airlines keep a bucket of seats available just for them. Sounds smart, and it probably is, but it was this that kept me wondering if we'd make our upgrade. Read more about it here: http://www.slate.com/id/2154261/

Thanks Orion.