One potential impact could be from this:
http://www.cnn.com/2017/04/12/travel...ed-off-flight/

Overbooking is a key part of lower fares for consumers and bigger profits for the airlines. It's insane how dumb Christie is for even suggesting this.

What's insanely dumb is the public's horribly misinformed and illogical reaction to all of this. As a politician, Christie is actually smart to appeal to the public opinion on this. It's one of the unfortunate realities of a democratic system.

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No one who's actually seated should be dragged off the plane. That's absurd. You enter the boarding ramp? That's it, you're on the plane.

The obvious legislative solution is to ban forcible removals and allow unlimited pricing for volunteers. Then airlines can decide how much they want to pay for their overbooking. Puts a price incentive into doing the right thing, and still allows overbooking.

Airlines should treat this as an opportunity and just set a price to involuntarily deboard passengers without recourse because apparently 800+ (in vouchers) hotel isn't enough.

That already exists. It's four times the amount of the ticket not to exceed $1350.

The problem is people think they want a total ban on overbooking, which would cause an obvious scheduling nightmare in an industry where delays are inevitable and unpredictable. It would mean tons of planes have to be under booked and/or that we'd have much longer rerouting delays on missed flights, so either ticket prices would skyrocket or service quality would decline (likely both).

Airlines need the option to bump passengers with capped compensation or you'd eventually run into situations where people can name their price (I'll take $100M please!). Maybe the cap should be increased, but it has to exist.

The cap is total nonsense, there is always a price at which someone will get off. Not like the passengers are a collective unit that will bargain for a better deal. You offer incremental increases in vouchers until someone accepts, it's really that simple. The name your price scenario is a silly hypothetical. I'm sure if you ask United they would've rather had the cap dramatically loosened to avoid this PR headache.

Plus apparently the cap limit wasn't even reached in this particular case so it really is irrelevant.

Not to mention that it wasn't an overbooking problem. The problem was United decided they wanted to put 4 of their employees on the plane at the last minute after all of the paying passengers were seated.

This post is nonsense for a few reasons others have pointed out. Congrats on being smart enough to beat the algos intraday lol.

In general it's not. But eventually you'd have a situation where the number would grow to astronomical levels. On a 20 seater with a big group traveling together, several seats overbooked, and a little collusion discussion in the cabin? Things could get interesting.

Also the cap isn't a limit to what they're allowed to pay. It's a minimum that they have to pay by law if they bump someone involuntarily. It's considered a cap because in practice it's the most a passenger can get. They'll offer smaller amounts to everyone first and if nobody bites, they bump someone and pay them what they're legally required to, often by choosing the passenger that minimizes the cost at 400% of the ticket price.

It's pretty clear in this particular case United had enough of this guy and now they will pay. That's why the guy saying he got in at the lows and sold the rip is so silly, what if this guys reps had come out with this statement in middle of session yesterday? Gg your rip which was again because traders were getting positioned ahead of DAL ER.

ASAP,

http://marginalrevolution.com/margin...ts-bumped.html

Some reading for you.

"One problem with using money to buy people out of queues is that it encourages more upfront queuing to begin with, and that involves negative externalities for passengers as a whole."

If there were no cap there would be collusion as stinkypete alludes to.

Not denying any of that...but fading the fast money, the media, and the Twitter outrage crowd has been a fairly solid strategy for me.

Also, people don't understand that overbooking isn't just a matter of selling too many tickets.

Two planes carrying 200 people each going from LA to Anchorage are leaving at 4pm and 6pm. They're the last flights of the day.

The 400 passengers are coming in from various other airports in the continental US, arriving in LA between 2:30pm and 3:00pm.

So the obvious solution is to book the first 200 that arrive on the 4pm flight and the next 200 on the 6pm flight, right? No overbooking.

Well, what happens if a flight arriving in LA at 2:30pm is late and arrives at 4:00pm so 20 passengers miss their 4pm flight. Now there's 180 people on the first flight to Anchorage and 220 people trying to get on the second flight. Not gonna work.

So how do you avoid this problem? Book 220+ people on the first flight, and if everyone arrives on time, fill it with 200 people, and bump the extra 20 to the second flight. Adjust numbers as necessary obv.


Obviously this is a super simplified example, but the point is overbooking isn't some evil thing the airlines do to screw over the passenger. It's necessary for a business with inevitable unpredictable delays to function efficiently and to keep ticket pricing and itinerary rerouting reasonable.

You realize when you come in after the fact and make it sound easy you will be met with some push back right? That's why I made the algo comment because it's tough to have an edge intraday on a story like this. In general fading the public and noise IS a solid strategy, it's filtering that out that is the challenge.

Absolutely, I have no issue with that.

Transports have been pretty reliable leaders for the market and you had a name like FDX dump 3.5% on no news/close at lows. A lot of higher beta dumped as well (pretty awful reversal for IWM)...

Both extending gains AH above their breakout point, shorts could be in for some serious pain given the dislocation that has been talked about since the election. Long banks and short rates from all those experts for months. Lmao, so awesome.

Why is the market red today? Most of the banks beat estimates and I can't imagine it cares about bombing Afghanistan.

technical levels getting tested, daily chart looking ready for a reversal of some kind, geopolitical worries (NK, China, Russia, etc), four day weekend so people more risk off

Yeah I thought the weekend had something to do with it. Like 1/2 the losses came in the last 1/2 hr.

Be interesting to see if TS point about profit taking accelerates if fear starts setting in. Between the memory of 2 massive busts in the 21st century and the fact people who have been in are sitting on a pile right now, selling could come fast and furious if any real fear set in.

eh, vix is 16 so we're still a long way from any pure fear accumulating

though i do think in this environment (more hft, more regulation) the panic is going to come in a way that we haven't seen before.

usually that fear comes in a one-off limit down futures event (august china deval, brexit, trump) but rarely sustains and then things re-correct. i wonder what happens when we see a sustained bear market. maybe a lot more limit days, or maybe the marketmakers just adjust to whatever the new normal is.

Frexit, aka Guy Fawkes Day of European Finance, is potentially a few weeks away.

I'm just happy that Trotsky is back in the news again after all these years with Melenchon running.

I'm very interested how the markets will react on the past/current events with the US & North-Korea on tuesday (and all the other geopolotical turmoil). It seems likely a (big) correction is right around the corner, no?