Flight cancellations / Irregularity costs / Refund policy

[Yb]

I have a question considering cancellations. How does this exactly work? When a flight get cancelled you probably get a company image and route image hit, right? But does this give you any extra costs?
In real life the flight cancellation looks a bit differently than here which is connected with a whole different system of earning money. But what is the same is that when an airline decides / is forced to cancell a flight it has to face the fact that it sold amount of tickets for this flight and that has angry passengers present of the aiport that demands to fly. Since I deal with this kind of issues frequently I can say they are very unhappy about such facts  
Also each airline has a different policy about how it deals with these kinds of situations.

What I propose is this:

a) first creating a penalty for cancelled flight if it's not already present (I never saw it expect having no income from that day) which will include rebooking fees, hotels for angry people and food vochers etc. This could push the airlines to better maintain their schedule to prevent flight cancellations.

b) later on (I know there is a lot of more urgent issues) creating a company policy towards flight cancellations having something like these options (very simply):

1. No refund policy (low-cost airlines)
When buying a ticket the passengers agree to the possibility the flight will get cancelled and the only refund they can get is a change or refund of the ticket. No additional cost for airline + big route and company image hit for each cancellation as no matter what passengers agree they always get totaly furious on the airport when this happenes.

2. Minimum refund policy (poor or also some low-cost airlines)
The traveler can get a small vocher or a participation on a hotel fee or some food vochers but generaly the airline won't get that bothered with the flight cancellation. Small aditional fees but still a hit for the image.

3. poor refund policy
The traveler gets a cheap hotel and a food vocher but nothing else. Additional costs and a small image hit.

4. Classical refund policy
The airline takes responsibility for those who get hit by the cancellation. The passengers get a good or even hifh class hotel, they get free food and a transport from the airport. There is no image hit for this kind of refund policy but the costs are not small.

5. Luxurious refund policy
The cancellation brings a huge amount of costs but the passengers get the best service - best hotels, free tranfer, even a vocher for a free ticket next time etc. The route and company gets actually a small boost with each cancellation but the costs of this are great - only for the airlines that are well established and have the max confidence that they won't get a flight cancellation every week.


I think adding this would add realism to the game since there is a huge difference between in example how SQ, DL or S7 deals with the unexpected situations.

[samomuransky]

In past I suggested ability to set delay and cancellation refund policy, but I was told that is too "micromanagment"

[samomuransky]

But one thing should be implented - EU have some rules about delays and cancellation (like if flight is cancelled, they refund you ticket + some more money). This should be added for EU flights.

[Yb]

I searched the forum and I couldn't find anything like this. To prevent micromanagement issues I suppose the levels, it doesn't have to be too specific, this is not micromanagement, it's one click but it give your airline another way how to profile itself

[Yb]

I searched the forum and I couldn't find anything like this. To prevent micromanagement issues I suppose the levels, it doesn't have to be too specific, this is not micromanagement, it's one click but it give your airline another way how to profile itself

And furthermore - considering what people propose about the in-flight service I think this is more of an issue. You don't care if you get free peanuts or not but if you sleep on a bench on the airport or if the airline gives you accomodation is more important

[Sami]

In this simple manner it would be doable. However how to calculate the costs of the levels .. that would need thoughts.

[Yb]

In this simple manner it would be doable. However how to calculate the costs of the levels .. that would need thoughts.

Well the hotel prices + the things around can be fixed (counting on the inflation), that is no problem. And finding out how much can a hotel cost per passenger in the beggining is also no problem. So it could be lets say 100% x the hotel price (not all passengers will use the hotel, I would say etc. 70% will, the rest will go home or sleep at friends etc., but the rest amount of money is for food and tranfer). ¨
About the route image and company image hits that is a bit different. I think the hit to the company image should be calculated with the amount of All the passangers carried to the ones that got the cancelled flight (multiplied by three or four since they will spread the word plus the newspapers will inform etc.). According to the route image in could be a fixed hit of 3,2,1,0,+1 i.e.? Just ideas.

[samomuransky]

https://www.airwaysim.com/forum/index.php/topic,7981.0.html - this was origianally suggested by me But it was finance compensation, not hotels, etc.

[Yb]

https://www.airwaysim.com/forum/index.php/topic,7981.0.html - this was origianally suggested by me But it was finance compensation, not hotels, etc.

Well very few airlines offer money compensation. In EU they have to but they try to put the passangers to hotels, offer them beverages etc. because it is much cheaper than direct finance compensations. To be honest I work in the airline industry for two years and I saw only one client who got a cash compensation from Czech Airlines but I saw hundreds who got hotels, vouchers etc.

[samomuransky]

OK,  but we should be able to do it.

About EU rules: Once you say you want money, they must give you money In some cases you have right to both voucher and money.. I not remember exact rules.

[Yb]

OK,  but we should be able to do it.

About EU rules: Once you say you want money, they must give you money In some cases you have right to both voucher and money.. I not remember exact rules.

If Sami would like I have a book about those rules in our airport office so I can get it and bring it. But I think that is also too much. The levels of refund can be anything, you can imagine hotels, money, vochers or anything. It is up to the situation. I would like to see more of a "policy" that you can decide. That way it's easier and more understandable. And as sami said making too many things is too hard and unnecessary. But five levels would offer you a good decision.

[evb]

All that get complicated with connecting flights, where even a deley could mean an extra day at the airport. I dont understand why you should use level 5, or how cancellations can make the passengers happier. But, now that I think about it, last time it happend to me, it was in the 4/5 area.  I guess it has a bit of a positive effect after all. 

To be honest I work in the airline industry for two years and I saw only one client who got a cash compensation from Czech Airlines

not in my case     

[Yb]

All that get complicated with connecting flights, where even a deley could mean an extra day at the airport. I dont understand why you should use level 5, or how cancellations can make the passengers happier. But, now that I think about it, last time it happend to me, it was in the 4/5 area.  I guess it has a bit of a positive effect after all.  ::)not in my case     

Well since there is no connecting flights now that is no issue and when there will be - the cancellations are even now so I don't think that it would change anythin 

[Yb]

So any ideas here? I think this would make the game much more realistic and better.

Anyways we can just set it up with basic refund policy stated by airline and set the refund in the simple manner. If we use the classes set before by me let's say:

1. - No extra costs - refund of the ticket / high % of the pax moved to another flights. No costs for airline + big hit to image

2. - Pax can get up to 15% of the ticket price as a compensation for the delay / cancellation. The difference will be calculated like 0% for delay to 30 minutes, 15% for a delay longer than 6 hours or cancellation.

3. - the same as above but with 30%

4.- the same as above but with 50%

5. - the same as above but with 100%

Important thing I forgot to notice is that this should have also another setting - three cathegories - airline problem (staff + aircraft), traffic restrictions (benevolent airline = traffic restrictions) and weather restrictions (most of todays airline provide no refund or accomodation when it is caused by weather).

[Yb]

I was thinking about this looking at the statistics of airline sales this year and I think this could also significantly cut the profit margins of airlines making the game more realistic. Again it can be also a way how to motivate airlines to get better and more expensive aircraft, repair them and keep them in good shape rather than "taking anything that is possible" especially in the beggining thus helping to solve the problem of "growing too fast" airlines.

[Sami]

Yes agreed, the costs for cancellations or other irregularities can be very high for legacy carriers that take care of their customers. Or on the other hand LCC's get much of c*** for stranding their pax in the middle of nowhere (like EU regulations wouldn't concern them...).

[Yb]

Yes agreed, the costs for cancellations or other irregularities can be very high for legacy carriers that take care of their customers. Or on the other hand LCC's get much of c*** for stranding their pax in the middle of nowhere (like EU regulations wouldn't concern them...).

Yes I agree. But that is the whole concept. The LCC dont care and dont pay but have lower prices which raises the load factors (compensation for lower image). They earn less, pay less. Normal carriers earn more but pay more.
This is the difference that works in the normal world and I guess would work here as well. Plus the margins for airlines would be lower = more reality + a reason to take better care of your aircraft (nobody will probably return aircraft totaly wasted.