Quantifying the benefits of pre-emptive rebooking: A case study for a network carrier (JAN 12, 2012)

Changes in technology and procedures have the potential to facilitate improvements in airline passenger mobility in the presence of forecast irregular operations that lead to large scale cancellations. First, increased coordination among National Airspace (NAS) operational stakeholders enables airlines to pro-actively plan for reduced capacity events (e.g. snowstorms, equipment outages, labor shortages). Second, ubiquitous, inexpensive, reliable broadband communications between airlines and passengers increases opportunities for coordination. Coupled together, these changes provide an opportunity for airlines to leverage passenger´s willingness to adjust their travel plans by preemptively rebooking flights up to a day in advance of planed flight cancellations. This paper describes a Monte Carlo analysis of the feasibility and benefits of pre-emptive rebooking of passengers on cancelled airline flights. A case study for domestic operations of a major U.S. network carrier operating a mid-west hub for a single day cancelation event (January 12, 2012) showed that: (i) pre-emptive rebooking is feasible accommodating 73% of the passengers seeking to rebook pre-emptively, (ii) previous day rebooking is not required as a majority of the passengers (>95%) can be accommodated earlier on the same day, (iii) airlines could have recouped up to $388K by avoiding airfare refunds, and (iv) corporations sponsoring business travel could have saved up to $62.9K. The implications of these results are discussed.