Dear readers,

This week, I’m in Singapore at the Aviation Festival conference. I have been interviewing several airline CEOs on stage — including AirAsia’s Tony Fernandes, Cebu Pacific’s Mike Szücs, Thai Airways’ Chai Eamsiri, and Sri Lankan Airlines’ CEO Richard Nuttall — and I look forward to sharing some updates with you soon about Asia’s recovery.1

As I travel, I wanted to follow up on my rant from a few weeks ago about placeholder schedules — the flights many U.S. carriers put up for sale six or more months before departure that often have little basis in reality. Many customers have no idea this is the case. You can understand why some get angry when they learn the flight they bought isn't what the airline will actually deliver, especially when it affects other travel plans, like whether they can make a connection or not, or how much longer or shorter a layover might be.

One nice thing about having a newsletter is that for a story like this, I don’t always need to know all of the answers — I can learn from my readers. After I published my rant, I heard from many of you, and your comments are representative of three stakeholders in the placeholder schedule chain.2

Perhaps tellingly, no airline people contacted me to defend the practice.

For now, let me summarize what I heard from those three constituencies. The first two are airline insiders who do not like placeholder schedules — those who work in revenue management and those who implement near-term schedules. The third constituency is obsessive frequent flyers who love the arbitrage opportunities placeholder schedules offer and don’t want them to go away. These folks live for schedule changes because it allows them to switch to any flight at no charge.

Let’s take a look at those three constituencies:

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Revenue management at airlines

I heard from current and former revenue managers who told me revenue management and network planning often have different opinions of the long-range placeholder schedule. Tom Bacon, a former executive at American Airlines and Frontier Airlines and now a consultant, told me the number of changes was a frequent source of tension between revenue management and planning departments. Revenue managers, he said, could be surprised when they learned of consolidated flights.

We open up the flights based on limited expected demand and then, poof, there are 30 more passengers moved to that flight 60 days out. RM couched their concern around "the Customer" (they were in charge of re-accommodation) but obviously schedule changes represent both more work and less optimization in the end.

Bacon went on to say that the schedule planning team always won internal battles. Afterward, he said, planning acted as if “everyone else must simply deal with it.”

black and white car seat — Photo by Alexander Schimmeck on Unsplash

Another reader struggled with managing flights that might not operate (“It’s not ideal, right?”) but said it wasn’t that bad of a problem because the airline closed its lowest fare classes far in advance to prevent revenue loss. Close-in schedule changes are more vexing, the person said. Still, this reader said, airlines may be suffering from some revenue leakage in this post-Covid demand environment.

“Flights aren't behaving like they were and so the strategies might not be ideal,” the person said. “If they go and cancel some flights, then flights will be booked even more, and then obviously it's not as good as a yield situation as it could have been, or what we call ‘sold too soon.’”

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Current (or similar) schedulers at airlines

At larger airlines, one person told me, the people who handle long-range planning typically aren’t the people who implement the schedule. Among other things, the person who handles the close-in schedule (the “current scheduler”) needs to confirm that the schedule for sale is actually something the airline can operate.3 Planners who work on a schedule months in advance are more interested in big-picture strategy than the nitty-gritty of whether the schedule works, this person said.

“Current schedulers tend to be caught in the crossfire, because they have to balance revenue generation with operational optimization,” the person said. “And usually no one is happy in the end.”

According to this person, the people in these roles understand they won’t be given a flyable schedule, but the closer the placeholder is to reality, the easier it is to implement. What often happens, though, is that schedulers receive poor approximations, and that creates tension between long-range planners and close-in schedulers. This person said current schedulers found it annoying to have “shoddy work handed off to people lower down the food chain, as it gets closer to the operation.”

Here’s an example this person shared of what might happen:

Planning usually is pretty good about making sure we have enough aircraft hours and aircraft capacity to make it work, but often then specific flights need specific aircraft for performance or other operational limitations (this *tends* to be more mid-range stuff dependent on carrier, but it can definitely affect current schedules as well.) With all of the reshuffling of aircraft frames and assigning the right fleets (or sub fleets) to the right places, often you need to re-time. Retiming can very often wreck connectivity, in some cases, a customer won’t be able to make their journey at all anymore if the overall O&D breaks (especially on routes where there is only daily or even less than daily service).

Obsessive frequent flyers

As this is a niche, trade-oriented newsletter, I don't have many regular traveler readers who might be frustrated by schedule changes. But some of you are obsessive road warrior types — people obsessed with beating the airlines and saving money. Some members of this group were angry I questioned their favorite track hack.

Zach Griff @_ZachGriff

@BrianSumers @GMoney_95 You're telling me that I can make a fee-free change to a cheap flight when the schedule changes? Sign me up!

Joe Schmo @therealmanero

@BrianSumers Stupid article. It's a huge benefit to smart consumers. I leverage this to make free changes and/or get a refund down the road

Yes, they have caught on. They know they can buy the cheapest ticket 10 months in advance — perhaps one with three connections — and count on airlines to push through at least one (and possibly more) material schedule change. This crowd knows it can get an agent to put them on a much more convenient flight at a fraction of what it should cost. Or they can cancel the flight for a full refund.

I suppose you could argue that this arbitrage is not material and that it’s a cost of doing business. But last week, Zach Griff, who is also a stellar reporter for The Points Guy in addition to being a lover of placeholder schedules, noted United Airlines wants to crack down on a different group of hackers — people who book flights they know will be delayed, simply to cash in on the compensation offered by the airline. This is probably not a huge group either, but clearly United is concerned enough by the practice to take interest.

Now if you’ll excuse me, I need to hop on a flight from Singapore to San Francisco — and yes, I did benefit from a substantial schedule change on this one.

What did I get wrong? Email me more at brian@theairlineobserver.com

Leave a comment

1

Thank you to all of my new subscribers who signed up during the conference. I am thrilled to have you.

2

I suspect I have more to learn, and if you have more to add, I’d be grateful if you would contact me at brian@theairlineobserver.com.

3

The person said future schedules are typically designed by a network planning team, and then another scheduling group “handles everything from the mid-range to the about-to-operate schedule.” Of course, some airlines do it slightly differently.

Frequent Flyers Love Placeholder Schedules…